Measure U Implementation Update

Last night, Richmond City Council was scheduled to receive an update on Measure U Fiscal Estimates (the second part of Item K3).

At the request of "the business community", Mayor Butt decided to continue the fiscal estimate update until January. I made a motion to overrule him but it was unsuccessful. 

Contrary to Mayor Butt’s assertion that this decision was made in support of the business community, I believe it was an attempt to stifle publication of real information about Measure U. The intention of this item was to update the public on relevant data and details of the implementation of the new business tax structure. By continuing this item, it means people have to wait to hear the detail of the fiscal estimates that our City Staff have been working hard to gather. 

Our finance department has been doing outreach to the business community to answer questions, respond to concerns and gather data to increase the accuracy of fiscal projections. 

Staff was prepared to respond to concerns that have been raised by the business community, clarify widespread misinformation about Measure U implications, and provide explanation of the different calculation methodologies that have been utilized by the City of Richmond and the West Contra Costa Council of Business and Industries. 

The truth is, Measure U was approved by an overwhelming majority of Richmond voters. It is too late to negotiate this measure without going back to the voters. It cuts taxes for small businesses with less than $250,000 in gross receipts while increasing tax rates on larger ones. Many of the businesses who have expressed concern about Measure U have millions of dollars in revenue and don’t qualify for small business exemptions. 

False information has been shared about San Francisco and Oakland’s business tax rates, in an attempt to make Richmond’s rates appear unreasonable. San Francisco has had much higher business taxes than Richmond for many years, their system is more progressive than ours. Oakland’s Blue Ribbon Task Force of Business Representatives has recommended higher taxes for big businesses than what Richmond’s Measure U includes. Additionally, incorrect data has been shared about business closures in Richmond, which includes businesses that are still open, businesses that have temporarily closed during the pandemic, and businesses which closed before Measure U was approved. 

Supposedly exorbitant tax hikes have been shared as if they reflect small businesses, when in reality, they are large companies. For example, the Council of Industries shared about a lighting distributor that is facing an estimated $18,600 tax liability. However, that figure reflects a business with annual gross receipts of over $10 million.

Research into claims that multi-million (and billion) dollar corporations such as Costco will leave the City of Richmond as a result of a Measure U indicate there is extremely low likelihood of this.

Delaying discussion like the one we were scheduled to have last night does nothing to delay implementation of the new business tax structure, it only serves to limit public access to accurate information.

The best way to ensure smooth implementation of Measure U is to provide businesses with the adequate information they need. Our main priority should be investing in staffing for implementation and outreach. Staff has already done a great job of reaching out to businesses, but businesses need to collaborate too.The city needs data about businesses and this is the call for the Council of Industries and Richmond Chamber of Commerce to work with the city so the business can  provide accurate information to the city in a timely manner. I hope the business-serving organizations in our community join us in this effort.