Milpitas voters will decide in November whether to revamp how local businesses are taxed under ballot Measure K \u2014 a change that would add an estimated $3 million annually to the city\u2019s coffers.<\/p>\n
City officials assert the measure would allow the city to maintain and bolster essential services amid\u00a0a looming budget deficit<\/a>, while opponents argue that any additional taxes would eventually raise costs for locals.<\/p>\n Measure K would tax businesses a flat rate based on the amount of money they make. The flat rate would increase with inflation, and businesses bringing in over $700,000 would also pay more based on a percentage of how much they make. (A full formula for the tax is available on the city\u2019s website<\/a>.)<\/p>\n The tax would need a majority vote to pass, and would go into effect on Jan. 1, 2028, if passed. Money from the tax would go to the city\u2019s general fund, meaning city council could allocate it to any of the city\u2019s programs.<\/p>\n Currently, the city uses a 50-year-old system which taxes businesses based on the type of business and number of employees. According to city officials, this results in some smaller businesses paying over 70 times more per employee than what larger businesses pay.<\/p>\n \u201cIt\u2019s way overdue,\u201d said Milpitas Mayor Carmen Montano of the tax measure. \u201cIt\u2019s fair and it will help us bring down that structural deficit and maintain services in the city.\u201d<\/p>\n The proposed tax comes after city staff forecasted a deficit of over $19 million dollars by 2031, driven\u00a0primarily by the rising costs of labor and benefits. City staff expect a recent deal with Rivan<\/a> to bring in millions of dollars to city coffers over the coming years, while taxes from other businesses, like an incoming Amazon warehouse<\/a>, could also help alleviate the deficit. Even so, this influx of business was not included in the city\u2019s most recent forecast earlier this year.<\/p>\n Milpitas City Manager Willie Hopkins argues that both the increasing costs of city services and the rising need for infrastructure and public safety in the growing city make the tax measure critical.<\/p>\n \u201cIf it\u2019s rejected \u2026 it really makes it more difficult for us to maintain the city and provide those services that the community has become accustomed to,\u201d said Hopkins, who said the money would help preserve a \u201csafe and clean\u201d city.<\/p>\n The measure would also bring down taxes on smaller businesses, and has garnered support by several small business owners. Both police and firefighters unions have also backed the measure.<\/p>\n \u201cIt really levels the playing field and also doesn\u2019t put an additional burden on the residential taxpayers,\u201d said Hopkins.<\/p>\n Even so, some are pushing back against the assertion that residents would not be paying for the tax. Mark Hinkle, president of the Silicon Valley Taxpayers Association, argues that businesses will pass on the increased cost of taxes to consumers \u2013 including those in Milpitas \u2013 in the form of higher prices. \u201cThe proponents say \u2018no tax to residents.\u2019 Well, that\u2019s a big fat lie,\u201d he argued.<\/p>\n The measure would add to the already high cost of living, said Hinkle, who added that the city government should instead pare back its services to essentials like infrastructure and public safety. \u201cWho spends your money better than you? Certainly not the government,\u201d he said.<\/p>\n The Silicon Valley Taxpayers Association and the Libertarian Party of Santa Clara County oppose the measure.<\/p>\n