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Richmond Chamber of Commerce Fronts for Chevron, Supports Port Study,
Slams Butt and McLaughlin

September 16, 2006

 

At a time when the attraction, growth and success of small businesses in Richmond should be the focus of our local Chamber of Commerce, the organization is increasingly dominated by big business, especially Chevron. Following are three examples.

 

The first is a continuation of the incessant chest beating the Chamber has been doing over the Business License Ordinance amendment that will be on the November ballot. To hear the Chamber talk, you would think they beat back some insidious plan to tax Richmond small businesses out of existence.

 

The following three articles were published in Chamber of Commerce media:

 

Reports of the Demise of the Tax were Premature

 

RichPAC, the Chamber of Commerce and the Council of Industries succeeded in killing proposals for a Gross Receipts tax on business and a Payroll tax on business, but persistent proponents of new taxes managed to put on the November ballot a huge increase in Richmondís Business License Tax.

 

We proclaim a partial victory, for the proposed increased Business License Tax is much less onerous to most businesses than would have been either the Gross Receipts or Payroll taxes.  Also, the battle is not lost, for the new Business License Tax becomes reality only if passed by a majority vote on the November ballot.

 

For most businesses, the new Business License Tax would mean an increase of 10%.  For smaller landlords, the new Business License Tax would be fairer and may even mean a net reduction in tax, because residential landlords are taxed per unit, instead of per business location, and commercial landlords are taxed per square foot instead of per location.  However, for larger residential landlords, the per-unit tax adds up to a lot of money.

 

The biggest burden of the proposed Business License Tax falls on manufacturers, and most of that burden falls on Chevron.  The proposed Business License Tax includes a tax on the value of raw materials used by manufacturers.  Estimates are that Chevronís bill would be about $8 million, 80% of the $10 million in new revenue expected from the Tax.

 

The Chamber of Commerce remains steadfastly opposed to the new Business License Tax.  Firstly, the proponents of the tax have not demonstrated a need for such a dramatic increase in tax revenue.  The City has a balanced budget with a healthy reserve, and has steadily restored services cut during the financial crisis of a few years ago.  The Chamber believes the City has to learn to live within its means rather than expect constantly increasing revenues.

 

Secondly, new taxes discourage economic development.  The tax burden on business in Richmond is already very high, and more taxes will make it that much more difficult to attract new businesses.  Itís especially ironic that the City would impose a large increase in the cost of providing rental housing at a time when there is such a shortage of affordable housing.

Thirdly, itís unfair to Chevron.  Itís difficult for some people to have much sympathy for Chevron given their recent profits, but taxes paid by Chevron already amount to 30% of Richmondís General Fund revenues.  Chevron doesnít occupy 30% of Richmondís area, nor consume 30% of Richmondís services, so why would anyone think that Chevron isnít already paying its fair share of taxes to the City?

 

Please help the Chamber and RichPAC fight the new tax.  Support candidates endorsed by RichPAC and give generously to RichPAC.  Every business in Richmond, no matter how small, should donate at least $100 to RichPAC.  Go ahead, get out your checkbook and do it today. (Download proposal)

 

Josh Genser, Chair, RichPAC

 

Ship Ahoy Richmond!

 

There is a grand proposal being floated around that involves building a new port. This is an opportunity to investigate the possibility of building a new, larger, state of the art, container terminal at the north/east side of the Chevron Refinery in San Pablo Bay. The Port of Oakland has pretty much run out of land, the world is getting smaller and the shipping of goods from the Pacific Rim to California is increasing at a steady rate, so this proposal could have some genuine merit to it. I understand that this item will be on the agenda for Tuesdayís (Sept. 12th) City Council meeting, and I encourage the City of Richmond to take a serious look at supporting a feasibility study for this port. Understand this fact: there will be no City of Richmond money invested in the feasibility study. I think that this means that larger entities than the City of Richmond (i.e. J.P. Morgan) think this is serious enough to invest their own time and money into such a long-range project that there might be gold at the end of this rainbow for the City and the private companies interested in this port idea. The feasibility study would take about one year to complete and the end report would include such important topics as economic benefits, environmental concerns, commercial benefits, financing sources, potential available jobs, and finally, if it is good for Richmond to move ahead or not. The new port would need about 200 to 300 acres, which is available in Richmond. If the project was given the green light, the permitting process would take 5 years and construction another 5 years. Total cost for the project would be about $500 million. This is no small project, or feasibility study, as you can tell. The investment for this new port would bring many well-paying jobs and ancillary businesses into our fine city as well as expansion by companies that are already located here. John Ziesenhenne Chair 

 

Richmond Mayoral Candidate Hoisted on her own Petard

 

For twenty years, Chevron has paid its share of Richmondís utility users tax by paying the fixed amount (the ďcapĒ) specified in the ordinance as the maximum required of any taxpayer. Chevron consistently maintained that, if it were to calculate the amount due under the taxís formula, its tax payments would be substantially smaller. Based entirely on the unsubstantiated assumption that Chevron was lying, and that, but for the cap, Chevron would be paying more, Richmond City Councilpersons Tom Butt and Gayle McLaughlin publicly accused Chevron of paying less than its ďfair share,Ē and hounded Chevron to pay under the formula. Finally, this month, Chevron did just that, and lo, its payment was more than 30% lower than it had been under the cap. Ms. McLaughlin and Mr. Butt prejudged the situation based on nothing other than antipathy toward Chevron, and have acted rudely and unwisely. Unfortunately, it is the City and its other taxpayers who will suffer from the loss of revenues. Surely, one needs no further evidence of why Ms. McLaughlin cannot be Mayor of Richmond.

 

By Josh Genser, Chair, RichPAC

 

All of the above came from an emailed Chamber of Commerce newsletter called ďE-News.Ē If it were news and simply stated facts useful to business, that would be one thing. Instead it is actually a vehicle for editorials that are probably illegal under the Chamberís non-profit status, and the information provided is factually erroneous.

 

For example, one editorial blames Gayle McLaughlin and me for Chevronís reduced utility user tax payment, when in fact, it is purely Chevronís prerogative to choose which method it wants to use to calculate its tax liability. Furthermore, Chevron has refused to let the City verify information on which its tax payment was calculated. Do you think that the rest of us could get away with that kind of arrogance? What is the Chamber thinking? Are they gloating that the Richmond General fund may be $4 million poorer at the end of FY 2006-07 so that they can take a whack at McLaughlin?

 

Regarding the business tax, the proposed changes to the Business License Ordinance would, for example, raise my firmís taxes (Yes, I am a Richmond business owner) less than $1.00 a day while providing millions to fix up Richmondís infrastructure and make the City safer. Well worth the money, I would say. The license fees I pay for owning a couple of rental properties would actually go down.

 

Finally, for the Chamber of Commerce to support a plan as crazy as the proposed container terminal makes you wonder what they smoke when they get together down there to write their newsletter.

 

I have been a member of the Chamber for decades, and I am a former board member. The Chamber does a lot of really good things and involves a lot of really good people, including those who wrote the three inane editorials copied above. I hope the Chamber can learn to resist Chevron generated diversions and concentrate on Richmond business.

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