City cites require amid pandemic revenue decrease.
Foster City is searching for possible improvements to their business license tax to boost revenue, stating low costs and a need to handle predicted common fund deficits in the coming years.
“I am in support of further discovering business license taxes,” Mayor Richa Awasthi said.
The council is discovering a major statement’s top increase from business license taxes that could affect around 20 large corporations in Foster City. The city has a major statements charge of $0.00075 and a $35.9 million receipt top, resulting in a maximum business license tax of $26,985. Increasing the receipt top to $50 million would increase the most business license tax to $37,500, a potential citywide revenue increase of $163,000. The city’s revenue from business license taxes was around $1.5 million in 2021, with revenues ranging from $1.7 million to $1.6 million in past years.
Councilmember Sanjay Gehani needed to check out raising the top on the company license tax, given the large profits qualified organizations currently make. He observed that little corporations have already been paying higher costs even though they make less revenue.
“I know the figures are large but general from what the revenue is, it is a rounding mistake,” Councilmember Sanjay Gehani said.
Froomkin also favored discovering business license tax agreements but needed to know from corporations what it would mean for them and if they’d proceed to different cities.
“We certainly do not want to put it to a spot wherever we lose businesses. That might be absurd,” Froomkin said.
The city is considering revenue choices due to predicted common fund architectural deficits around the following five years due to revenue decreases from the pandemic. Resort tax, adventure coding, rentals, sales tax, and business license tax have already afflicted the pandemic. According to a town team report, Foster City also offered improved work charges from their 2021 work agreements and new annual funding commitments to lessen CalPERS’ responsibility. If the council decides to go forward with tax increase choices, it would need to put the measure on the 2022 ballot by the early September deadline. The city needs an easy voter bulk for passage. Fund Manager Edmund Suen said the city at their budget sessions would need to study practices and solutions to shut the deficit. The lodging tax, technically called the Transient Occupancy Tax, went from $3.5 million in 2020 revenue to $992,000 in 2021.
The council decided against raising the TOT and sales tax for the city, stating a need to support hotels after the pandemic amid fewer visitors. Foster City includes a 12% TOT, with the team remembering a 2% increase would raise revenue by $626,000. Ten towns in San Mateo Region have a 12% TOT charge, while four towns have a 14% rate.
“I am a little bit worried for regional hotels of burdening them with any tax on it because they’ve gone via a lot already. I’d most likely not be in support of a TOT tax. Maybe down the road, I’d, but at this time, we are still coming out of COVID,” Councilmember Patrick Sullivan said.
“I feel that the different areas are far from the airport, the more benefits they have to draw business. A lowered TOT would support our hotels to drum up business from the airport. Therefore I like wherever they are at,” Froomkin said.
City Supervisor Kevin Miller said the city would restore a complete examination of neighborhood outreach engagement techniques, engage with the corporation’s neighborhood and investigate a small business license tax ballot measure.