The Antioch City Council will vote on Tuesday whether or not to finalize moving forward with a Business License Tax Ballot Measure for the November 4, 2014 election.
If approved by 4 of 5 councilmembers (or 2/3) residents of Antioch will vote to update the existing business license tax ordinance to include a Residential Landlord Business License Tax and to confirm the Existing Business License Tax, with an increase in the Minimum Tax.
The tax will do the following:
- Impose an annual business license tax on residential landlords on the rental or leasing of: detached single family dwelling units at $250 per dwelling unit and attached multi-family dwelling units at $150 per unit
- Maintains the existing business license taxes for all other business, with an increase in the minimum tax to $100 for those businesses subject to the gross receipts tax formula, except for certain home occupation business, for whom the minimum tax will be $25 per year.
The City is hoping the measure passes to add to its General Fund which is $43,046,381 with a population of 106,455 people—the General Fund has seen a $13 million decrease since 2007.
Antioch’s General Fund revenues are about $404.36 per capita (per person). When comparing to other local cities General Fund per capita:
- Walnut Creek – $1,036 per capita (approaches 3x higher)
- Richmond – $1,150 per capita (approaches 3x higher)
- Concord – $648.24 per capita (60% higher)
- Brentwood – $616.57 per capita (52% higher)
- Pittsburg – $585.95 per capita (45% higher)
According to the Staff Report, per the May 27, 2014 meeting, this tax was about “fairness” as landlords of single family dwellings, have not been paying any Business License Tax. In addition, the rental or leasing of a residential real estate is a unique business; very different from retail or other commercial endeavors in terms of economic benefits to the property owner and the city.
The city uses the example that residential landlords benefit financially from depreciation for tax purposes while they historically benefit from asset appreciation in reality, which is not subject to the City’s Business License Tax.
Over the past year, the California Apartment Association as opposed this proposed Measure and has not compromised with the City to find a middle ground and opposes any per unit tax on the business of renting or leasing residential units.
It’s estimated that the proposed residential landlord business license tax and increased minimum tax will generate approximately $2.3 million annually in additional revenue for the General Fund based on a approximately 11,500 total residential rental units, but will be offset by approximately $300,000 in costs to administer the additional tax.
According to the Staff Report, the City General Fund would be increased to $45,346,381 ($444.75 per capita) keeping Antioch the poorest city government in the County but the additional funding would assist the City in addressing the structural deficit projection in Fiscal Year 2016-17 and in providing vital services to the community by returning City Operations to full-time.
The City is estimating the cost of adding one ballot measure to the November 2014 election will cost $11,000 based on 44,150 registered voters.
If You Go:
Antioch City Council
6:30 pm – Special Meeting
7:00 pm – Regular Meeting
Council Chambers, 200 H Street Antioch
2 comments
This is a MUST have for the City of Antioch! Bankruptcy is the next step if this doesn’t pass in November. Thanks Mike for the article.
I think it is important to understand the cost of implementing this was figured into the original proposal submmitted. This $300,000 will set-up a collection department to collect all monies due the city which is something the city has not done in years and cannot afford to continue to do.
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