Measure E reborn as Measure B
For the second time in less than two years, South Lake Tahoe voters are being asked to approve changes to the city’s business license tax structure.
If approved by a majority of voters during the June 5 primary, Measure B will lower tax rates on the gross receipts of city businesses while increasing the maximum amount of the business license tax from $3,448 to $20,000 per year.
Passage of the proposal will decrease taxes for 95 percent of businesses in town by 5 percent and increase revenue to the city for essential services and capital improvements by about $250,000 per year, according to city estimates.
Less than 50 large business would see a tax increase if Measure B passes, according to the estimates.
Mayor Claire Fortier said the change to the business tax structure will provide additional money to the city at a time when traditional revenue streams are drying up. The measure will also ease the tax burden on small businesses while providing the city with funding for infrastructure, including roads, Fortier said.
“How do we pay for, not only the day to day operations of the city, but also for the really important improvements that are needed in this town?” Fortier said.
Opponents contend that taxing the city’s biggest businesses will trickle down to area consumers and small businesses, off-setting any expected decrease in taxes for most.
“It’s just not a good time to increase the taxes on anyone,” said JoAnn Conner, president of the South Tahoe Chamber of Commerce, which opposes the measure.
South Lake Tahoe resident Duane Wallace, who criticized a similar measure two years ago, said increasing taxes on big businesses will ultimately be felt by employees and consumers.
“It was a Trojan horse before and it still is in that individuals and small businesses will still get stuck with the cost,” Wallace said.
Fortier disputed the contention that higher taxes on the big businesses will trickle down to individuals. She said approval of Measure B will resolve a long-standing unfairness in the city’s tax structure.
“What we’re trying to do is find out how to make that equitable all the way around,” Fortier said.
The arrival of Measure B on the ballot follows the defeat of Measure E, a similar proposal that failed by 66 votes in November 2010.
Measure B differs from Measure E in that it would remove business license tax increases tied to inflation. The cap on the business license tax under Measure E was $10,000, half of what is proposed under Measure B.
City Councilman Tom Davis, who opposed the 2010 proposal, said Measure B addresses his main concern with Measure E because it removes the annual increases tied to Consumer Price Index.
A jump from $3,468 to $20,000 in annual city business tax is still a significant jump, even for large companies like Raley’s and Safeway, Davis said. The councilman said he wasn’t sure how he would vote come election day.