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)