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Analysis: San Diego is in the middle of a financial crisis, and officials have been seeking ways to cut costs and boost revenue.
In a Dec. 1 report, an advisory group called the Citizens Revenue Review and Economic Competitiveness Commission examined the city’s finances. Among other things, it noted how much businesses pay in taxes here compared to San Francisco, Los Angeles, San Jose and Oakland.
According to the report, the city of San Francisco makes the most money on average per business at $5,253 compared to just $79 in San Diego.
San Diego’s low business tax rate is often used as evidence to illustrate how it could increase taxes and fees and be on par with other cities. But is it possible that businesses in San Francisco pay 66 times, on average, more than they do in San Diego?
The number is actually a bit off, said Greg Kato, policy and legislative with San Francisco’s Office of the Treasurer & Tax Collector. A total of 77,679 businesses paid taxes in 2007-2008, not 75,000, as mentioned in the San Diego report, he said. That adjusts the average revenue amount to $5,072, not $5,253. The commission got its information from a city treasurer’s report.
Most businesses in the city only pay a $25 annual fee, Kato said. Businesses with a payroll of more than $250,000, which account for fewer than 10 percent of businesses, pay a 1.5 percent payroll tax.
In San Diego, businesses pay $34 for a business license annually if they have 12 or fewer employees and $125, plus $5 for each employee, if they have more workers. New businesses also pay a $17 zoning fee.
Still, the report is accurate in describing how much money each city receives from businesses on average, regardless of how that money is collected and from whom. For that reason, the claim is True.
If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.