City ponders business fee revamp that could jolt Apple

CUPERTINO >> Cupertino leaders are considering a restructuring of the city’s business license fees by imposing taxes on employers based on the number of people who work for them, municipal officials said Tuesday — a levy that could jolt Apple.

Alarmed by increasingly challenging commutes and skyrocketing home prices, Cupertino officials have turned to the prospect of higher taxes on employers such as Apple as a way to raise cash for new transportation efforts in the Silicon Valley city.

“People who were on the edge before on rents and home prices have now been pushed over the edge,” Cupertino Vice Mayor Rod Sinks said Tuesday. “There is a sense of urgency now to fix this problem.”

Cupertino officials said the proposal could bear similarities to a headcount tax now being mulled by Mountain View, that may place a business tax increase on its November 2018 ballot. That measure could jolt big tech companies such as Mountain View-based Google.

During a May meeting of the Cities Association, the Fremont Union High School District superintendent sketched an alarming picture of the challenges that confront teachers and staffers of the educational organization. The school district serves Cupertino, most of Sunnyvale and parts of west San Jose, Los Altos, Saratoga and Santa Clara.

“If you are a teacher, you can get a job anywhere,” Polly Bove, superintendent of the Fremont school district, told the gathering. “What we are struggling with as an employer is: How do you attract and retain people, highquality people, when they could go almost anywhere?”

A survey of the 1,000 staffers of the

district, which has 500 teachers, revealed disturbing assessments of the current housing and traffic woes that besiege the Bay Area.

According to the poll, 74 percent of the respondents say housing costs have impacted their ability to stay employed with the district.

Even worse, 56 percent of those surveyed said they would defect from the district sometime in the next six years if housing costs

aren’t addressed, according to the superintendent’s presentation.

Cupertino officials are looking at the higher business taxes to finance tranportation upgrades in Cupertino, or a private-public partnership that would oblige employers to invest in transportation improvements to benefit Cupertino and potentially other jobsrich cities such as Sunnyvale, Palo Alto, Mountain View and Menlo Park.

One example of a transportation upgrade: Use the increased revenues or the public-private partnership to build a transit-only lane

in the median sections of State Route 85 and Interstate 280. The idea would be to speed commutes in the south San Jose, west San Jose, Cupertino, Mountain View, Palo Alto and Sunnyvale areas.

“Let’s get an extra lane built, a lane dedicated to public buses,” Vice Mayor Sinks said. “Our freeways are jammed up four hours a day.”

Raising taxes on employers is a policy that is far from risk-free, however.

Seattle-based Amazon has suspended plans for a new office pending the outcome of negotiations with municipal officials for an employee headcount tax in that city.

Cupertino would like to place a tax proposal on the ballot for November. But that means the city would have to act by August to authorize a tax measure for voters to consider. Before that occurs, Cupertino plans to survey voters in the city.

“There is a sense of urgency now about the traffic and housing problems,” Sinks said. “We had best not wait. We had best be impatient.”