Hit Bay Area employers with per-employee tax? Residents say no

Bay Area residents don’t want taxation without explanation.

Just 30 percent of voters support the idea of their city levying a new, per-employee tax on local businesses to fund improvements to general services, according to a new poll.

The absence of a stated purpose for the new money lies at the root of the opposition to such a business tax, said Dave Metz of FM3 Research, which conducted the poll for this news organization and the Silicon Valley Leadership Group.

“Before voters approve such a tax they’re going to have to have a pretty clear sense of what the money would be dedicated to support,” Metz said.

Mountain View voters last year overwhelmingly approved a per employee “head tax” that’s expected to fall primarily on Google, the city’s largest employer. Although California cities are legally banned from earmarking a general tax for specific purposes, Mountain View’s City Council publicly pledged to use the estimated $6.1 million in new money to solve traffic and transit problems. In San Francisco, voters last year passed a ballot initiative to impose a revenue-based tax on large companies to combat homelessness.

“If there are communities where there are very specific compelling needs you may well see a higher level of support if voters have a sense of where the dollars would go,” Metz said. “There are three issues that are urgent concerns for Bay Area residents, which are homelessness, housing costs and traffic. Those are the services for which voters are most likely to be willing to raise local taxes.”

The poll of voters in Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara counties also suggested that area residents don’t generally favor taxing business “as a good in and of itself,” Metz said.

However, resentment over the traffic and increasing housing costs generated by the presence of major technology companies — which many voters in Mountain View and San Francisco expressed in the run-ups to their tax votes — led some respondents to support a general “head tax” on local business.

“I’m a renter here in Palo Alto so I pay an incredible amount of money toward rent,” said Marla Kravatz, an IT project manager. “The cost of living in Palo Alto I feel is directly related to these very wealthy companies coming in and bringing their very wealthy employees.”

But Jarrod Stein, a Concord massage therapist, believes a head tax could impose an unfair burden on smaller businesses. “Pretending that every company has the money to fork out, it’s kind of ridiculous,” said Stein, 40, who doesn’t like the idea.

Carl Guardino, CEO of the Leadership Group, a business-backed policy and advocacy group, said he was “surprised to the point of needing smelling salts” by the low level of support for a head tax.

“The age-old question of, ‘Do you want to tax someone else?’ is usually not a hard proposition for people to embrace,” said Guardino, whose membership include virtually all of Silicon Valley’s big tech companies. “We surmise that citizens realize having jobs is a good thing and taxing jobs could potentially make jobs more scarce.”

Among those polled, 51 percent opposed the idea of a tax on local businesses based on a flat fee per employee and 19 percent said they were undecided. Current and former employees of tech companies were no more likely to support or oppose the idea than workers in other industries. Among Republicans, 82 percent of those surveyed oppose such a tax compared to only 41 percent of Democrats. Voters in Contra Costa County were the least likely to express support for the idea, the poll found.

Donald Andres of Danville strongly opposes the idea of a head tax, but not just because he’s a Republican.

“I used to run a small business, and I thought I paid plenty of taxes at that time,” said Andres, 80. If he were running that environmental consulting firm today and a head tax came down, he said, “it would cause us to move as many people as possible to cities that don’t do it.”

The poll of 1,568 registered voters in Alameda, Contra Costa, Santa Clara, San Mateo and San Francisco counties, was conducted by FM3 Research for the Silicon Valley Leadership Group and Bay Area News Group. The poll, conducted Feb. 14-24, has a margin of error of +/- 3.1 percent.