Business Taxes & Perception
of City Services In Oakland
Goldman School of Public Policy
Individual Policy Analysis Project
By Saif Alsharif, Carly Finkle, Anna Garfink, Sharon
Jan, and Nathan Obaid
Roadmap
1. Problem Overview and Research Questions
2. San Francisco vs. Oakland business tax structure
3. Interviews and surveys of Oakland business owners
4. Recommendations
1. Problem Overview
The City of Oakland does not have enough funding to
sufficiently staff city services for businesses and
residents of Oakland.
Research questions:
• What could Oakland do differently with its business
taxes?
• How can San Francisco inform changes to Oakland’s
business tax structure?
• How do Oakland businesses interact with city
services?
• What do Oakland business owners think about city
services?
2. Comparing Oakland and San
Francisco’s business tax structure
Oakland’s business tax system is very
complicated
• Oakland has 17
separate tax categories
• Categories were
defined in city charter
decades ago
• San Francisco has 7
categories
– Business types
grouped together
logically
• Based on NAICS codes
• Enacted in 2012
Oakland’s gross receipts tax structure
• Nearly all businesses regardless of gross receipts pay a flat tax rate
– Very small businesses pay a flat amount
• Disproportionately affects small businesses
SF implemented a progressive gross
receipts tax and additional taxes on very
large businesses
Oakland San Francisco
Gross Receipts ✔
✔
Payroll ✔
Commercial Rents ✔
Homelessness Gross
Receipts - $50 million+
✔
Note: Though most categories use gross receipt to tax, in Oakland and SF Admin HQ uses payroll and in Oakland Limo/Ambulance/Taxis use number of vehicles/permits.
A Comparison tool
➢ To calculate estimated
business taxes in SF vs.
Oakland
A large contractor pays more than double
in gross receipts in SF than in Oakland
Large tech companies also pay more in SF
than in Oakland
However, small retailers pay more in
Oakland than in SF
And very small laundry services are paying more than
double the gross receipts in Oakland than in SF
Small businesses represent the vast
majority of Oakland businesses
3. What the small business
community thinks
About taxes, city services, and staffing
Interview and survey
methodology
• A dozen interviews with small business owners and
BID/Chamber of Commerce leaders
• Online survey of business owners (59 responses)
Highest-priority services
Criteria Ranking
Service (1)
Importance
(2)
Service
Dissatisfaction
(3)
Improvement
Priority
(1) + (2)
+ (3)
Priority
Ranking
Homelessness
Crisis
3 1 1 5 1st
Maintenance 2 3 2 7 2nd
Public Safety 1 3 4 8 3rd
Homelessness
- Varied opinions of root cause
- Consensus that urgency is high and city is failing to address the crisis
Maintenance
- Seen as important for profitability
- Dissatisfaction → BIDs
- Confidence that more staffing would help
Public safety
- Seen as essential for profitability
- Break-ins, slow police response times especially
salient
- Confidence that more staffing would help
Service (1)
Importance
(2)
Service
Dissatisfaction
(3)
Improvement
Priority
(1) + (2)
+ (3)
Priority
Ranking
Addressing
Homelessness
3 1 1 5 1
Maintenance 2 3 2 7 2
Public Safety 1 3 4 8 3
Housing Affordability 5 2 3 10 4
Economic Development 3 5 5 12 5
Admin. Services 6 5 7 18 6
Parking 7 7 6 20 7
Other services
What does the business
community think about taxes?
Taxes do not play a role in whether
businesses choose to locate in Oakland
However, there were recurring complaints
regarding add-on taxes and fees
● Many business owners did not know they were obligated to pay certain taxes/fees, which raised issues of transparency ● Bigger impact on smaller businesses → thinning margins ● Examples: fire inspection fees, alarm fees, sugar sweetened beverage tax, litter fees
“No one tells you about these taxes and fees before
you open up”
- Business Owner for 40 years in Oakland
What does the business
community think about
staffing?
In regards to city jobs, Oakland has the
2nd highest vacancy rate in the Bay Area...
City Jobs Vacancy Rates for Oakland and Surrounding Cities Source: City of Oakland vacancy report, Human
Resources Management Department, (April 2019)
..and businesses believe that all city services
will be improved by increased staffing.
● 91% of businesses said that public safety and maintenance would improve if staffing is increased
● Some prefer investment in staff training, rather than just increase hiring
● 25% of businesses believe that increase staffing in admin services & parking and transportation would have no impact, which can be attributed to mistrust in those services
4. Findings &
Recommendations
Taxation: Findings and Recommendations
Findings:
- Business tax structure is complicated
and not progressive.
- Gross receipts tax rate is not central
to businesses’ decisions to open and
operate.
Taxation: Findings and Recommendations
Recommendations:
- Shift to fewer categories based on
NAICS classifications
- Shift to a more progressive tax
system
Findings:
The business community prioritizes
Services: Findings and Recommendations
- Homelessness
- Maintenance
- Safety
Recommendations:
Explicitly tie increase in staffing to:
Services: Findings and Recommendations
- Homelessness prevention and services
- Street and sidewalk maintenance;
beautification
- Emergency response timeliness and
appropriateness
Findings:
Trust: Findings and Recommendations
- Businesses are often mistrustful of the
City
- They may not believe that an increase
in taxes will lead to improved services
Recommendations:
Trust: Findings and Recommendations
- Improve transparency
- Target outreach to/for the business
community
- Improve service access
Questions?