Results from Tuesday’s election show Benicia residents appeared to pass a measure changing the city’s business license tax while rejecting a bid to change the city’s charter to add a new property transfer tax.
Initial results show voters approved Measure X, a revised business license tax, with 62.7% supporting the measure.
However, two measures that together would have increased taxes on the sale of properties built after 2027 appear to be caput after voters approved one but not the other. Measure Z, the transfer tax measure, is passing with 51.3% of voters in favor. But Measure Y, which would have enacted a charter allowing Benicia to implement Measure Z, appears to have been rejected, getting only about 45% of the vote.
A statement posted to social media after the election by Benicia City Manager Mario Giuliani said that support for a heightened property transfer tax has increased over the years. The issue, he said, may have been how city officials explained the co-dependence of Measures Y and Z.
“While the election may not resolve our financial challenges, it provides valuable insight into our residents’ priorities,” Giuliani wrote. The tax was estimated to bring in $230,000 annually.
Measure X
Measure X is a proposed change to the local business tax, hiking rates for large companies and lowering rates for small companies.
The proposed rate ranges from a $0.25 tax per $1,000 in earnings for retail shops and similar operations to $1 per $1,000 in industrial businesses and $1.25 per $1,000 for petroleum businesses. The measure could add an estimated $1.61 million to the city’s general fund in 2027 alone.
Currently, local businesses are taxed between $0.55 to $0.75 per $1,000 in earnings. The tax rate depends on the size and kind of business, which in Benicia ranges from cafes and trailer parks to import activity at the Valero refinery.
Measure X also includes a new tax of 3% of all earnings reported by shipping-related businesses in the Benicia port. Under Measure X, businesses reporting less than $100,000 a year in earnings will no longer pay a license tax.
Measures Y and Z
Voters ultimately approved Measure Z, a proposed increase to taxes on property sales, called a property transfer tax. However, the increase depended on voters’ approval of Measure Y, which would have enabled Benicia to gain local control of the tax rate.
Measure Y sought to grant Benicia, a general law city, the power to draft a charter that enabled a transfer tax increase. According to the city, the charter would have been limited to the tax and not change any other city functions.
Measure Z, in turn, would have upped the property transfer tax rate to between 0.4% and 0.8%, depending on the sale price, but will not go into effect.