Alameda School Parcel Tax Gives Illegal Tax Break to Large Corporations

Alameda Unified School District’s parcel tax renewal, Measure B1, retains the annual cap that benefits large corporations, a cap that was put in place with the current in-effect parcel tax in 2011.

The first problem with the measure is that the cap puts in effect different effective tax rates for large corporate property owners than for individual homeowners.

The nominal tax rate of 32 cents per-building-square foot goes down with each additional building square foot on a parcel after 25,000 square feet.

That structure probably violates state law in the same way that Measure H in 2008 violated state law – that parcel tax cost the district millions of dollars in legal fees and by having to refund property taxes.

Now let’s examine the regressive nature of the tax, the cap that transfers the cost from large corporations to individual homeowners.

Some 165 parcels “capped-out” at the $7,999 corporate limit under the parcel tax last year.

Alameda Landing Target Store

The parcel that is home to Alameda’s Target store is on the list of ‘capped-out’ properties and provides a good example.

The store is 140,000 sq ft. The annual cap in the current parcel tax, and Measure B1, is $7,999.

32 cents per square foot
.32 * 140,000 = $44,800

Without a cap, Target would pay $44,800 for our students. With the cap, they pay far less.

$44,800 – $7,999 = $36,801

Because of the cap, the Alameda Unified School District is leaving $36,801 on the table – and that’s just one of 165 parcels.

The effective tax rate is 5.7 cents per building-square foot, compared to the nominal 32 cents in the measure, which is what Alameda homeowners will pay. That means, as measured by tax rate, a homeowner pays 5.6 times as much as Target Corporation.

Target was projected to generate $300,000 per year in retail sales tax. That translates to about $30 million in annual sales at that store.

(Under Bradley-Burns, 1% of sales tax goes back to cities. Remember that the retailer simply collects sales tax from pockets of its customers, i.e. the community. )

Target Corporation’s annual revenue is on the order of $75 billion.

Target
2700 5th Street, Alameda, CA 94501
APN# 74-1366-2-1

http://www.eastbaytimes.com/news/ci_24274923/alameda-target-store-open-business
http://www.mercurynews.com/ci_21112641/alameda-plans-target-store-move-forward

http://www.lao.ca.gov/reports/2015/finance/sales-tax/understanding-sales-tax-050615.aspx

http://finance.yahoo.com/quote/TGT/financials?p=TGT

Likewise, Safeway at Alameda Landing gets a tax break – the cost of which is transferred to local homeowners and families.

Alameda Landing Safeway Store

Safeway is not the only building on this parcel, but it’s the biggest. The tax break for this parcel is actually bigger if the other buildings are factored in.

Size of store: 45,000 sq ft.

At nominal rate of 32 cents: $14,400

$14,000-$7,999 = $6,401

Annual tax break to Safeway, a corporation with $36 billion in annual revenue: $6,401

YOU PAY: 32 cents/building-sq ft.

Safeway pays: 17 cents/building-sq ft.

APN 74-1366-3
http://www.eastbaytimes.com/ci_23637139/safeway-stay-open-24-hours-at-alameda-landing

Safeway at South Shore Shopping Center

Safeway gets a tax break on it’s store at South Shore Shopping Center as well.

Size of store: 59,500 sq ft.

59,500 sq ft x 32 cents = $19,040

Without the cap, Safeway would contribute $19,040 to our schools.

$19,040 – $7,999 = $11,041

With the cap, Safeway gets an annual $11,041 tax break from the school district, at your expense.

YOU PAY: 32 cents/building-sq ft.

Safeway pays: 13 cents/building-sq ft.

Without the corporate tax break annual cap, the school district could potentially raise much more money for our schools, or raise the same amount, but give you a smaller tax bill.

Tell the school district to stop giving illegal tax breaks to large corporations while transferring their costs to you. Vote NO on Measure B1.

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