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Our Economic Tune Up

Medical Marijuana may offer San Leandro a way to tune up the city's entire economy. There are areas in our tax code that should be changed that can help create new jobs and sustainable growth.

One of the economic engines that San Leandro generates its revenue from is the city’s Business License Fee Schedule.   This is San Leandro’s version of a business tax code, where as some city’s charge a flat percentage tax on receipts, San Leandro charges an annual business license fee based on a certain formula for certain general categories of business (Retail, Service, Wholesale, etc…).  In order to change the fees beyond a standard CPI increase the city must get approval from the voters. 

Because of this, Medical Marijuana, amongst all of its controversy, may very well provide San Leandro with an opportunity to create new jobs, new revenue, and sustainable growth beyond what one or two dispensaries would bring to town.  Our current tax code is far too uniform for a 21st century economy, and it needs to reflect a more modern perspective that appropriately considers the new industries that have been created in the late 20th and 21st centuries.  To create a new sub-category in the Business License Fee schedule for Medical Marijuana Dispensaries the city will have to get approval from the voters.  

Since elections are costly, we should look at maximizing our election dollars by tuning up the entire Business License Fee schedule. My research indicates that with a proper tune up the city can net between $2,000,000 and $4,000,000 of new sustainable revenue without jeopardizing our city's highly competitive strategic advantage to businesses.

Some of that $2,000,000 - $4,000,000 can be used to hire new police officers to help counter any perceived or possible negative consequences that may come with Medical Marijuana Dispensaries. I would propose the rest be used to increase funding in our Broadband Connection Incentive program, bring back library hours that have been cut, pay for rebates on homes who install solar panels, and pump up our streets & roads maintenance budget. There are a number of ways we could spend $2,000,000 - $4,000,000, and I would look forward to discussing all of them.

We can bring to the voters in one ballot measure, the creation of the Medical Marijuana Dispensary category, and at the same time lower fees on certain types of businesses and raise them on others.

For example, I already found an area where raising our fee makes sense in Airport Parking facilities and can possibly net $1,000,000 in new sustainable revenue.  Off-Airport parking is an inelastic service, and the demand will remain high and only increase in the future.  My research indicates that even if we adjusted our Parking Tax to mirror Oakland's the Airport Parking facilities in San Leandro would still be the cheapest.  Most of this new tax would be spread over non-San Leandro residents as it is mostly people from other cities using the facilities.  http://sanleandro.patch.com/blog_posts/solve-million-dollar-city-budget-deficit-by-closing-loophole

We should also create a separate category for Big-Box Retail stores. Right now our tax code says that San Leandro wants as many Wal-Marts in town as it does local retail stores like Estudillo Produce. Wal-Mart and Estudillo Produce pay the same tax per employee, and Wal-Mart ends up paying far less of its gross revenues in taxes than Estudillo Produce.  This needs to change, and has been a discussion topic for many years.  Again, Medical Marijuana may provide us with the opportunity to address this area of our tax code. 

I think we should look at lowering taxes on Office/Professional businesses, as well as Manufacturing.  We should create sub-categories for the certain businesses we are trying to attract to our Fiber Loop, like software development, 3D printing, and green businesses to offer a low tax rate to try and motivate their development.

We should also look into sub-categorizing certain service businesses that enjoy a location specific strategic advantage and have high use of our infrastructure.  Cargo, Transport, and Warehousing could be a service we discuss in this area.  We could set a rate that is higher than other service businesses, say a printer, but that can be passed on within the margin of advantage our central location in the Bay area with close proximity to Rail, Port, and Airport is currently providing for our transport & cargo companies. 

There are a number of scenarios that could help to maximize our revenue on inelastic goods/services, optimize an area that isn't in line with 21st century thinking, and entice businesses we do want to move in.

Let’s make the most of this opportunity that Medical Marijuana may provide us for an economic tune-up. 

 

 (full disclosure Chris Crow is a filed Candidate for San Leandro City Council District 4)

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Chris Crow August 31, 2012 at 01:54 AM
Hi Mike, thank you for your comment. As the California courts recently said cities may no longer ban dispensaries, San Leandro has put itself on track to regulate them. Part of regulation comes in the form of taxing, or collecting a license fee in San Leandro's case. I'm simply saying that regulation process occurring now, might open up an opportunity for a tune up.
Mike August 31, 2012 at 02:13 AM
I understand the legality in the eyes of the state but as we have seen recently in Oakland, at Oaksterdam for example, the feds can still come in and close them down and confiscate cash. Also as I mentioned Banks will not take deposits from Harborside and other clinics, does that mean taxes collected can be federally confiscated? A lot of risk right now.
Summer Hemphill August 31, 2012 at 09:33 AM
All cannabis patients are demanding is that the city comply with the existing state law,nothing more & nothing less ! Cities are "pre-empted" by state law from banning medical marijuana dispensaries,yet the LA City Council banned a thousand of them last month. Yesterday medical marijuana advocates turned in enough signatures to put the measure on hold until the City Council either decides to rescind it or puts the measure before the voters ! Marijuana legalization was favored by more Californians than Meg Whitman & LA politicians are about to get a civics lesson on what happens when you defy the wishes of your constituents ! Once the Feds are forced to reclassify marijuana & that time is soon,the anti-marijuana zealots will have been vanquished once & for all ! All the Feds are doing in trying to intimidate patients & voters is to anger more Americans everyday & raise public awareness about "jury nullification" !
Fred Eiger September 02, 2012 at 08:21 PM
What a bunch of nonsense. Raise taxes, grow mairjuana. Boy Chris you have a wonderful business outlook. I'm glad you'll lose in a landslide. Have you gotton Filipovich's backing? Did he promise to not run so you can be the big mouthed gadfly this year?
Marga Lacabe September 03, 2012 at 12:54 AM
I have no doubt that the tea party vote will go to Benny. But there aren't enough of you in San Leandro to make a difference.
Fred Eiger September 03, 2012 at 03:04 AM
Oh really? Well, in a four way race you never know, now do we?
Fred Eiger September 03, 2012 at 03:18 AM
Chris attempts to hide his extreme taxation agenda under the guise of "fairness", there is no doubt that if he gets elected, highly unlikely, he will run more businesses out of town and make Tony Santos appear moderate.
Marga Lacabe September 03, 2012 at 03:40 AM
Fred, anything can happen. But remember, our elections require majority vote (through RCV), not plurality.
Marga Lacabe September 03, 2012 at 03:41 AM
Did you actually read Chris' proposal or did you see the word "tax" and knew you'd be opposed?
Richard Mellor September 03, 2012 at 04:01 AM
If I read it right I actually agree with this Chris Crow guy. Why should a small business like Estudillo produce pay the same tax per employee tax as Wal Mart, a global business? But the problem with Crows general strategy which is to orient toward capital or business, is that it cannot help but lead to lower wages and worse conditions for workers. This is what investors demand for their money. None of the candidates for city council represent workers' interests including Prola who will claim he does. He has supported all the attacks on workers.
Fred Eiger September 03, 2012 at 03:40 PM
I did read it, and it's nothing more than redistributionist crap. It will run more businesses out of town and only drive the final nail into the heart and coffin of San Leandro. By the way; Wal-Mart employees close to or over 1000 people in San Leandro, how many people does Estudillo Produce employ? More Leftists crap about "fairness" when it's all about impoverishing people. The Socialist lives off the misery of others. Richard Mellor is a prima facie example.
Fred Eiger September 03, 2012 at 03:41 PM
That's correct Marga, with RCV there is no gurantee your boy-toy will win, now is there?
Marga Lacabe September 03, 2012 at 06:11 PM
Well, according to Benny Lee, RCV is too confusing for Asians and Lee is banking on the Asian vote. Then again, so was Tony Santos. When Lee couldn't deliver it, it was RCV's fault.
Fred Eiger September 03, 2012 at 07:35 PM
Prola is the poster child for Government laziness. He always take the side of the Government Sponge over the taxpayer.
Fred Eiger September 03, 2012 at 07:36 PM
Of course RCV will be confusing for the idiots who think Crow's comments about the Chinese in the Olympics was "racist".
Chris Crow September 04, 2012 at 02:32 AM
Thanks for your comment Justin. WalMart and Target operate very well in communities near by with a much higher tax rate. In Union City, whose reinvention can be attributed to Big Box success at Union Landing, charges it's retail stores based on gross receipts at $0.43/$1,000. That is a much higher rate than San Leandro and those stores continue to thrive in that environment. In Richmond they charge based on employee like San Leandro, and whereas San Leandro is charging $33.90/per employee, Richmond is charging $46.80/per employee. Richmond is also charging a base rate which is more than double San Leandro. Actually all the Big Box stores in the Bay Area are succeeding in communities that mostly have a higher tax rate than San Leandro. To say it will cost jobs at Big Box stores to align our tax rate with neighboring cities is not accurate. San Leandro is simply not valuing these assets at an optimal level.
Fred Eiger September 04, 2012 at 02:43 AM
Why should we care about what Richmond, of all places to compare, charges in business tax? Richmond is a slum. We need to focus on increasing the standard of living in San Leandro, not running us into the ground for Government pay and pensions. Adding another hurdle, to a City that already has a bad reputation will only hurt us in the long run.
Chris Crow September 04, 2012 at 02:47 AM
I also mentioned Union City. Richmond was the closest neighbor North that charged based on employee. As I mentioned in the comment above, San Leandro's rate is one of the cheapest in the whole Bay Area.
Justin H. September 04, 2012 at 03:03 AM
I dig it, we can agree to disagree on the taxation piece. Part of both of us growing. I was more referencing the cost of goods varying from store to store and community to community, its interesting how many people will bring up to me that they didnt know that certain items are more or less depending on the city i am working in. It has to do with alot of things tax being one of them, rent, security costs, electricity, etc..cost of doin business...Like I said in my SL times article we need to bring safety back first to change perceptions then people and businesses not the other way around.
Chris Crow September 04, 2012 at 03:11 AM
Yes, Justin you are advocating for public safety, but indeed I am the only candidate with a workable solution on how to actually pay for more police officers and public safety resources as this blog indicates. You might want to see what the Police have to say about a different tax on Big Box Retail before counting the idea out as something you wouldn't support. I certainly appreciate your input here though and I have no problem agreeing to disagree with you.
Justin H. September 04, 2012 at 03:40 AM
your workable solution = increase taxes, and trust me I speak with local law enforcement more than you know.
Chris Crow September 04, 2012 at 03:49 AM
My blog also talks of lowering taxes too. All you can ever do from a basic level in government is increase taxes, lower taxes, and cut expenses. Taking the time to research the areas it makes sense in and presenting a viable option that is the least burdensome to the San Leandro resident is the workable solution. If you recall Measure Z was passed by the voters in 2010 as a quarter cent sales tax to help pay for police officers. Measure Z was a temporary tax and will expire soon. This adjustment in the business license fee schedule will create sustainable revenue to ensure public safety budgeting needs are adequately met in the future. Measure Z has puts a far greater burden on the middle class, and the citizens of San Leandro than what I am suggesting here. If you truly support Public Safety Justin as you say you do then I encourage you to spend time researching concrete ways to improve their resources. San Leandro Patch is an open forum. You should offer a blog on your own suggestions on how to improve our city. It's free, and you'll reach a wide audience.
Justin H. September 04, 2012 at 04:13 AM
Your becoming an excellent career politician in your answers, I will give you that.
Fred Eiger September 07, 2012 at 03:45 AM
The only concern the Police have is how to increase and fund their pay and pensions. Chris Crow is simply their mouthpiece.
Fred Eiger September 07, 2012 at 03:47 AM
Justin is absolutely correct in his refutations of Chris Crows laughable proposals. All Chris wants to do is raise taxes on "the rich" when in actuality any increases on some will lead to higher prices for all.
Summer Hemphill September 14, 2012 at 12:16 AM
Elect Chris Crow because San Leandro needs new leadership & new ideas !!! As San Leandro has become younger & more diverse it's high time that this growing faction be represented at the decision making level !!! The geriatric composition of the present City Council is certainly only representative of the interests of the Chamber of Commerce,City Employees & Law Enforcement. All the people aren't represented,when those sitting at the table only represent a fraction of the community ! Elections are more than popularity contests,let's elect Chris Crow to make sure everyone's voices are heard ! Remember a new broom sweeps clean & both the City Manager & City Attorney need to go as their specious advice & professional incompetence can no longer be tolerated ! Vote for Chris Crow - The brighter candidate for a brighter future for San Leandro !!!
David September 14, 2012 at 12:40 AM
I missed this thread. If Measure Z is expiring soon (it will be one of the only "temporary" taxes ever to do so), then any added pot taxes should be used to offset that decline in revenues, not spent on frivolities like subsidizing solar panels or broadband access. Why should my taxes subsidize my neighbors' porn habit or solar panels, so that I, in effect, end up paying for his electricity?
Justin H. September 14, 2012 at 01:27 AM
Summer, geriatric? That's a pretty insulting comment and your call outs of the city manager are incorrect considering he just came on board and has been in position for less than a year. You sound like one of Chris's bff's?
Summer Hemphill September 16, 2012 at 01:11 AM
Geriatric was being kind,they can only actually determine their ages through carbon dating ! The City Council should pool their resources,go to Costco & get a discount on a case of Depends ! They're so old even Fred & you won't sleep with them anymore ! Then again they do say that politics make strange bedfellows (of course then Republicans want to prosecute them for sex crimes) ! Why is a city with an average age of 23 being run into the ground by the senile delinquents presently holding elected office ? It's time for change in San Leandro & I'm not talking about changing soiled Depends in the City Council restroom,I'm talking about real change ! The City Attorney & City Manager gave incompetent advise in direct conflict with state law & interjected their own personal bias in the medical marijuana dispensary issue ! Firing & replacing them shouldn't have to wait for the election,but should certainly be at the top of the list once the votes are counted ! Encouraging the City Council to defy state law is an egregious ethical & legal misjudgement which could have resulted in civil suits costing the city millions of dollars ! They must go as they have less integrity than the fossils who foster their employment & even less respect for the law,as they of all people should have known better !
Bong Sativa September 16, 2012 at 08:56 AM
That's funny,you're brilliant,keep it up,the truth hurts,roll me a bomber and leave it on the side table.

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