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Mayor Trades Autos for Restaurants

The steady drumbeat from Alameda City Hall is that the new Alameda Theatre, Cineplex and attached skateboard park, or rather, Parking Garage, will drive sales tax revenue for the City of Alameda. Nevermind that movie tickets themselves are not taxable, the new revenue is supposed to come from the taxables sales at restaurants, when people come to the theater for a movie, and go out to eat either before or after. We’ve proven this unrealistic – pie in the sky predictions from a council and planning staff anxious to justify spending $40 million on the the project.

Nonetheless, the Mayor of Alameda seems determined to trade a dependency on motor vehicle sales tax for eating and drinking sales tax. But this is a dangerous approach – we already have a high concentration of sales tax revenue derived from eating and drinking establishments in Alameda.

An analysis of data from the California State Board of Equalization shows that the city of Alameda already has a high concentration of taxable sales in the restaurant – eating and drinking places – category.

For the second quarter of 2007, the latest period for which results are available from the Board of Equalization, the motor vehicles and parts categories racked up $25,973,000 in taxable sales in Alameda, while the Eating and drinking places category totaled $21,517,000. When motor vehicle and parts sales are removed from the equation, taxable sales, and hence, sales tax, from restaurants (eating and drinking places) become the dominant sales tax generator for the city of Alameda. The chart below illustrates that.

Categories of Retail Sales Tax in Alameda 

Rather than try to broaden the sales tax base to generate more sales tax revenue from business-to-business transactions – Alameda Point is rife with empty buildings that could be re-used for light industry – the Mayor seems hell-bent for election on increasing our dependency on a single sales tax source. That is, dining establishments in Alameda.

 

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