City may put tax measure on ballot despite big surpluses

BY EMILY MIBACH
Daily Post Staff Writer

East Palo Alto officials are looking into putting a tax hike on the November ballot despite recording $33.6 million in budget surpluses the last two years.

East Palo Alto City Council on Tuesday (April 3) will review potential tax measures and give feedback to Finance Director Brenda Olwin and City Manager Carlos Martinez on which, if any, taxes should be pursued for the November election.

Olwin, in a report to council, laid out three possible taxes for the council to consider. The three taxes are:

• Business license tax: an annual fee companies would have to pay if they wish to conduct business in the city.

• Payroll tax: employers would have to pay a fee based on how much their employees are paid.

• Development tax: a one-time tax that developers would have to pay based on the square footage of a new project.

How much the city could receive from each tax and their impact on the city will likely be addressed on Tuesday, according to Olwin’s report.

This would be the second tax hike in two years for East Palo Alto residents. Voters in November 2016 approved a half-cent sales tax to fund police, improve traffic, repair storm drains and improve the city’s water supply. The tax passed with 84% of the vote.

The city has also recorded budget surpluses for the past two fiscal years. In 2016, East Palo Alto had an $18.8 million surplus and an extra $14.8 million in 2017.

But $12.9 million of last year’s surplus is earmarked for certain things, such as improving the city’s infrastructure, including roads or sewers, or building low-income housing, according to a Jan. 16 report to council from Olwin. The remaining $1.9 million can be used for any part of the city’s budget.

East Palo Alto is not the only mid-Peninsula city with a financial surplus that is still looking for more cash. Mountain View and Palo Alto’s councils are both exploring the possibility of putting tax hikes on the November ballot.