Richmond Business License Tax, Measure T (November 2008)

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A Richmond Business License Tax, Measure T ballot question was on the November 4, 2008 ballot in Contra Costa County, California, for voters in the City of Richmond, where it was approved.

However, in February 2009, a judge ruled that Measure T is unconstitutional and voided it. In March 2010, the Richmond City Council by a 4-3 vote decided to appeal that loss to a state appeals court. The city later later decided to drop that appeal.[1]

The ballot question asked whether voters wanted to adopt a Richmond Business License Act (effective January 1, 2009) to define what a manufacturer is and to establish "a license fee equal to one fourth of one percent (0.25%) of the value of the material used in the manufacturing process during the immediately preceding calendar year for large manufacturers."

Measure T was primarily directed at a Chevron refinery based in Richmond. In 2009, the Chevron refinery paid taxes that accounted for 33-50% of Richmond's $144 million 2009 budget. The impact of Measure T on Chevron is that they will have to pay about $21 million more in taxes every year, if they continue to do business in Richmond.[2]

In February 2009, Chevron filed a lawsuit in Contra Costa County Superior Court. They said that Measure T violates state and federal laws. In December 2009, a judge agreed.[2]

Election results

Measure T
ResultVotesPercentage
Approveda Yes 15,473 51.51%
No14,56348.49%
These final election results are from the Contra Costa County election office.

Activists shoot for November 2010 ballot

The Richmond Progressive Alliance is circulating a petition to try to qualify an initiative for the November 2, 2010 ballot in Richmond that would require Chevron and others to pay higher taxes. Their initiative would limit residents and businesses to one method, instead of two, for calculating what they owe the city.[3]

Chevron leaving Richmond?

Chevron logo

Because of Measure T and a separate lawsuit filed against the company to halt construction on a new refinery it had planned, Chevron executives said that they may leave Richmond. Chevron established its refinery in Richmond in 1902 and is the city's largest employer and taxpayer.[2]

Mayor Gayle McLaughlin is unconcerned, saying, "We have solidarity with communities in Nigeria and indigenous folks in Ecuador who are also going up against Chevron for destroying their home in the Amazon" and Richmond is "growing in its awareness of its own empowerment."[2]

Measure T declared unconstitutional

In December 2009, Contra Costa Superior Court judge David Flynn ruled that Measure T is unconstitutionally discriminatory. Flynn ruled that Measure T violates the commerce clause of the U.S. Constitution, as well as violating a California law that prohibits taxing the value of raw materials rather than the volume of raw materials. As a result of Judge Flynn's ruling, the City of Richmond will not be allowed to collect the $16 million a year that it hoped to generate under the provisions of the Measure T tax.[4]

A editorial board of the Contra Costa Times opined that Judge Flynn's decision was "highly technical."[5]

Ruling appealed

In March 2010, the Richmond City Council by a 4-3 vote decided to appeal that loss to a state appeals court. Those on the City Council voting for an appeal were Tom Butt, Gayle McLaughlin, Jeff Ritterman and Jim Rogers. Nat Bates, Ludmyrna Lopez and Maria Viramontes voted against the appeal.[1]

Parties reach agreement

In May 2010, Chevron and the City of Richmond announced that they had reached an agreement. Under the agreement, Chevron will continue to pay about $20 million per year in utility user taxes for at least 5 years, and will also pay an additional $114 million in taxes over a 14-year period.[6]

In return for that concession from Chevron, the City of Richmond agreed that it would not put a ballot measure on the November 2, 2010 ballot that would change how utility taxes in the city are applied, and it would also drop its appeal of Judge Flynn's December 2009 ruling.[7]

Text of measure

The question on the ballot:

Measure T: "Shall the Richmond Business License Act be adopted effective January 1, 2009, to define the category of Manufacturer and to establish a license fee equal to one fourth of one percent (0.25%) of the value of the material used in the manufacturing process during the immediately preceding calendar year for large manufacturers, be adopted?"[8]

See also

External links

References