Cupertino city council considers business tax increase for November ballot

- The Cupertino City Council will this evening consider placing an increased business tax on the November ballot to fund city projects, including a new City Hall, library renovations and transit studies. 

The city has presented four versions of the tax for companies with 100 or more employees, ranging from $150 per employee to $1,500 per employee. The tax would generate between $4 million and $32 million. The vast majority of that money would come from Apple, which is by far the area's largest employer. 

The business, not employees, would be responsible for paying the tax, according to the city. 

A city report shows that a majority of its businesses, 3,468 of 3,800, have less than 100 employees.

Though these small businesses would not incur the new tax, Cupertino Chamber of Commerce officials say it would target essential services like large grocery stores, restaurants and retailers.

The proposed business tax hike would affect 30 of the city's largest employers including Apple, Seagate Technology and Whole Foods.

Apple could have to pay tens of millions of dollars more to do business in Cupertino under the new 'employee tax.'

Andrew Walters, the President of the Cupertino Chamber of Commerce, is against the proposal. He calls the idea overly broad, rushed and one that doesn't adequately address the transportation problem.

"We're opposed enacting this on this go-round. Let's move it to the next election cycle," said Walters.

The chamber made stickers for opponents to wear at Tuesday night's meeting.

"There could be alternative solutions to the tax per se. By working with the business community, we actually might be able to come up with funding mechanisms that come from the state, federal government, as well as businesses," said Walters. 

Rick Kitson, spokesman for the chamber, said the business association's main concern is the city's speedy, six-week process for rolling out the "premature" proposal.

Kitson said a similar tax in Mountain View to improve transportation took six months of planning. Cupertino's tax plan currently includes eight different projects that could benefit from the funds. 

"It's something pretending to be a solution but actually provides no answers," Kitson said, adding that the chamber would support a tax plan that was paired with an "aggressive and meaningful" transit plan to ease the city's congestion. 

If the objective of the tax is unclear, Kitson said, "we're gonna get lost very quickly."

Cupertino City Councilman Barry Chang supports the idea.

"All I'm asking is they do their fair share," said Councilman Chang.

Chang points out Cupertino is home to 64,000 residents but says that number triples on work days with outside employees coming in.

Chang said the goal would be to have the money help with the area's traffic problem.

Apple did not respond to KTVU's request for a comment.

Councilman Chang said when he brought up the idea two years ago, he did hear from opponents including Apple. At this point, Apple is not lobbying against it, according to Chang. 

The council will review the tax proposal during a meeting at 6:45 p.m. in Cupertino Community Hall at 10350 Torre Ave.

KTVU staff contributed to this report.

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