SUBJECT: SUMMARY OF THE JULY 2016 DATE: July 27, 2016 PUBLIC OPINION SURVEY ON THE PROPOSED BUSINESS TAX MODERNIZATION SUPPLEMENTAL
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1 COUNCIL AGENDA: 08/02/16 ITEM: 3.3 CITY OF SzT 13 SAN JOSE CAPITAL OF SILICON VALLEY Memorandum TO: HONORABLE MAYOR AND CITY COUNCIL FROM: David Vossbrink SUBJECT: SUMMARY OF THE JULY 2016 DATE: July 27, 2016 PUBLIC OPINION SURVEY ON THE PROPOSED BUSINESS TAX MODERNIZATION Approved Date?(2l/0o SUPPLEMENTAL The purpose of this memorandum is to transmit the results of the public opinion survey conducted in July to aid Council discussion regarding the proposed business tax modernization ballot measure for the November 2016 election. The survey was conducted July 17-24, 2016, by Fairbank, Maslin, Maullin, Metz & Associates on behalf of the City. A representative from FM3 will present the survey findings and respond to questions at the Council meeting on Tuesday, August 2, as part of the Council's consideration of the ballot measure. Overall, the recent survey reflects strong potential voter support for the proposed business tax modernization. After presenting arguments both for and against the proposed measure, the survey found that 63% of respondents (in a sample size of 800) supported business tax modernization. The proposed measure would require a simple majority for voter approval. Aspects of the proposed measure that resonated positively with respondents included providing online registration and payment, increasing the tax the first time in 30 years, adjusting for inflation, increasing the tax for larger businesses, and providing more exemptions for smaller businesses. In addition, voters supported the idea that the measure would restore overall fairness in the tax structure as well as generate additional revenue to support critical City services. Attached to this transmittal memo are the topline results of the survey that provide additional detail for the specific questions on the survey. /s/ DAVID VOSSBRINK Director of Communications For questions, please contact David Vossbrink, Director of Communications, at (408) Attachment
2 JULY 17-24, 2016 f carbon':. Maslin, Maullin, Metz & Associates FM3 CITY OF SAN JOSE BUSINESS TAX MODERNIZATION SURVEY WT N=802 MARGIN OF SAMPLING ERROR ±3.5% (95% CONFIDENCE INTERVAL) A/B SPLITS Hello, I'm from, a public opinion research company. We're conducting a public opinion survey about issues that interest residents of the City of San Jose. (IF RESPONDENT REPLIES IN SPANISH OR VIETNAMESE, OR DESIRES TO SPEAK ONE OF THESE LANGUAGES, FOLLOW THE ESTABLISHED PROCEDURE FOR HANDING OFF TO AN INTERVIEWER WHO SPEAKS THE APPROPRIATE LANGUAGE.) We are definitely not trying to sell anything, and we are only interested in your opinions. May I speak to? (YOU MUST SPEAK TO THE VOTER LISTED. VERIFY THAT THE VOTER LIVES AT THE ADDRESS LISTED, OTHERWISE TERMINATE.) A. Before we begin, I need to know if I have reached you on a cell phone, and if so, are you in a place where you can talk safely without endangering yourself or others? (IF NOT ON A CELL PHONE, ASK: "Do you own a cell phone?") Yes, cell and can talk safely 45% Yes, cell but cannot talk safely TERMINATE No, not on cell, but own one 50% No, not on cell and do not own one 5 % (DON'T READ) DK/NA/REFUSED TERMINATE 1. First, would you say things in the City of San Jose are going in the right direction, or are they off on the wrong track? Right direction 60% Wrong track 25 % (DON'T READ) DK/NA 15 % 2. Next, I am now going to read you a brief list of public officials and agencies. Please tell me whether you approve or disapprove of the job each is doing. (IF APPROVE/DISAPPROVE, ASK: "Is that strongly or just somewhat?") (DO NOT RANDOMIZE; ASK IN ORDER) STR SMWT SMWT STR TOTAL TOTAL APP APP DISAPP DISAPP DK/NA APP DISAPP []a. (T) San Jose City Government overall -23% 42% 13% 9% -13% 65% 22% []b. (T) San Jose Mayor and City Council 27% 39% 11% 11% --13% 66% 22% []c. (T) San Jose City Management 20% 37% 12% 11% -20% 57% 23%
3 FM3 RESEARCH WT PAGE 2 NOW I WOULD LIKE TO ASK YOU A FEW QUESTIONS ABOUT THE UPCOMING ELECTION. 3. First, in November of this year, there will be a statewide election to allow voters to vote for President, Congress, the State Legislature and on state and local ballot measures. On a 1 to 10 scale - where "1" is "not at all interested" and "10" is "extremely interested" - how interested are you in this election? You can choose any number from 1 to 10. NOT AT ALL INTERESTED EXTREMELY INTERESTED MEAN (DK) SCORE: 8.5 2%-l%-2%-3% 6%-3% 7%-13% -7% 56% 1% NOW I WOULD LIKE TO ASK YOU ABOUT A POTENTIAL CITY OF SAN JOSE MEASURE THAT MAY APPEAR ON A FUTURE BALLOT. 4. First, I am going to read you a short summary of how this measure might be described on the ballot. It may read as follows: San Jose Business Tax Modernization Shall an ordinance be adopted to modernize the 1986 San Jose business tax to fund essential City services such as police patrols, emergency response, street repair, and parks maintenance by increasing business tax rates (including the base tax from 150 dollars to 195 dollars), adding an inflation adjustment, raising caps, exempting certain small businesses, and expanding the financial hardship exemption, providing approximately 13 million dollars added annual revenue, subject to existing independent financial audits? If there were an election today, do you think you would vote "yes" in favor of this measure, or "no" to oppose it? (IF YES/NO, ASK: "Is that definitely or just probably?") (IF UNDECIDED, DON'T KNOW, NO ANSWER, ASK: "Do you lean toward voting yes or no?") TOTAL YES 62% Definitely yes 34% Probably yes 19% Undecided, lean yes 9% TOTAL NO- 30% Undecided, lean no 4% Probably no 9% Definitely no 17 % (DON'T READ) DK/NA 8%
4 FM3 RESEARCH WT PAGE 3 5. Next, the structure of this measure has not yet been finalized, and I am going to read you several different potential elements of this measure. After I read each one, please tell me if you would support or oppose that element. (IF SUPPORT/OPPOSE, ASK: "Is that strongly SUPPORT/OPPOSE or just somewhat?") (RANDOMIZE) STR SMWT SMWT STR SUPP SUPP OPP OPP DK/NA [ ]a. Adjusting the business tax to keep up with inflation 41% 27% 10% 15% 7% [ ]b. Increasing the business tax for larger businesses with more employees 43 % 25 % 9 % 16 % 7 % [ ]c. Increasing the business tax for larger rental properties with more rental units 28% 23% 15% 26% 9% [ ]d. Increasing the maximum business tax for larger businesses from 25 thousand to 150 thousand dollars 30% 22% - 11% 24% 12% [ ]e. Enabling businesses to register and pay business taxes online : 61% 22% 4% 7% 6% [ ]f. Increasing the business tax for commercial and residential landlords 22% 21% 18% 29% 9% (SPLIT SAMPLE A ONLY) [ ]g. Increasing the base tax rate, which has not changed in thirty years, paid by businesses from 150 dollars to 195 dollars 38% 26% 11% 18% 8% [ ]h. Expanding exemptions for small businesses 51% 28% 4% 9% 8% (SPLIT SAMPLE B ONLY) [ ]i. Increasing the base tax rate paid by business from 150 dollars to 195 dollars 43% 21% 10% 19% 7% [ ]j. Expanding exemptions for businesses with financial hardships 42 % 31 % 9 % 11 % 8 % TOTAL SUPP TOTAL OPP 68% 25% 68% 25% 50% 41% 53% 35% 83% 11% 44% 47% 64% 29% 79% 13% 64% 30% 73% 20%
5 FM3 RESEARCH WT PAGE 4 (RESUME ASKING ALL RESPONDENTS) ; NOW I WOULD LIKE TO READ SOME STATEMENTS FROM SUPPORTERS AND OPPONENTS OF THIS POTENTIAL MEASURE. 6. First, I am going to read you some statements from people who support this measure. After hearing each statement, please tell me whether you find it very convincing, somewhat convincing, or not convincing as a reason to support such a measure. If you do not believe the statement, please tell me that too. (RANDOMIZE) []a. []b. []c. [Id- (BUSINESS SUPPORT) This measure is the result of productive negotiations and discussions between the City and the local business community. City and business leaders have come together to acknowledge the City's business tax needs to be modernized to be fairer and to generate more funds for essential City services. (ACCOUNTABILITY) This measure will be subject to the City's fiscal accountability requirements, including full public review of the annual budget and spending decisions and regular independent financial audits, to ensure that the money is spent consistent with community priorities. (SMALL BUSINESS EXEMPTIONS) Although this measure would increase the City's business tax, it would retain the exemptions to the tax for many small businesses and expand exemptions for financial hardship. So, more small businesses just starting out or going through hard times wouldn't have to the pay the tax at all. (COMMERCIAL LANDLORDS) Companies that own property in San Jose to rent to commercial or residential tenants are businesses that will pay their fair share of the business tax. VERY SMWT NOT DON'T CONV CONV CONV BEL DK/NA -35% 36% 15% 8% 6% -36% 35% 16% 9% 4% -39% 35% 15% 7% 4% -31% 36% 20% 7% 6% VERY/ SMWT CONV 71% 71% 73% 67%
6 FM3 RESEARCH WT PAGE 5 (SPLIT SAMPLE A ONLY) [ ]e. (AMOUNT - BASE TAX RATE) This measure would modestly increase the City's business tax for the first time in 30 years. This 45-dollar increase to the base rate will help ensure that San Jose businesses pay their fair share of the costs of the essential City services that help support business success. [ ]f. (RESPONSE TIMES - POLICE) This measure is needed to help maintain and improve police response times in San Jose. Over the past several years, average response times to burglaries have doubled to more than 20 minutes. The City has lost hundreds of police officers in recent years, making it far more difficult to respond quickly to emergency calls regarding violent and property crimes. [ ]g. (FAIRNESS) The largest businesses in San Jose, with thousands of employees, now pay the same business tax rate as much smaller businesses. This measure would ensure that all businesses - particularly larger ones - pay their fair share for road maintenance, public safety, and other basic services. [ ]h. (NEED) This measure is needed to help repair streets and potholes, improve police response times, and support other basic City services that all businesses rely on in order to be successful. It would also help San Jose with long-term financial stability that is important for attracting and keeping businesses and jobs in San Jose. VERY SMWT NOT DON'T CONY CONV CONV BEL DK/NA -37% 33% -18%- -7% -6% -43% 28% 17%- -9% -4% -46% 28% 17%- -7% -3% -38% 35% -19%- -6% -2% VERY/ SMWT CONV 69% 71 % 74% 72%
7 FM3 RESEARCH WT PAGE 6 (SPLIT SAMPLE B ONLY) []i. (AMOUNT-BUDGET) San Jose's current business tax only provides the City with about one percent of their General Fund budget. This modest increase would double the contribution local businesses make to the City's budget to pay for essential City services that help support business success. [ ]j. (RESPONSE TIMES - MEDICAL) Every second counts after a heart attack or stroke. This measure helps ensure that people suffering from heart attacks, strokes, or other medical emergencies get the immediate emergency medical response they need to increase their chances for survival. [ ]k. (MODERNIZATION AND FUTURE ADJUSTMENTS) The San Jose business tax has not been increased in 30 years, despite the tremendous changes in our city and higher costs of providing services since This measure will include a regular adjustment for inflation so that businesses will continue to pay their fair share in the future. : [ ]1. (POTHOLES) San Jose has over 550 miles of major streets and neighborhood roads rated as being in "poor" or "failed" condition, with many containing huge cracks and potholes. In fact, bad roads and potholes cost San Jose drivers more than seven hundred dollars per year on average due to wear and tear on their cars. VERY SMWT NOT DON'T CONY CONY CONY BEL DK/NA -35% 35% -16%- -8% -6% -44% 28% 16% 7% 5% -46% 31% -14%- -6% -4% -45% 29% 15%- -6% -4% VERY/ SMWT CONY 71% 73% 77% 75 %
8 FM3 RESEARCH WT PAGE 7 (RESUME ASKING ALL RESPONDENTS) 7. Now that you have heard these statements, let me ask you again about the potential ballot measure we have been discussing. To refresh your memory, it would modernize the 1986 San Jose business tax to fund essential City services in San Jose - such as police patrols, emergency response, street repair, and park maintenance - by increasing business tax rates, including the base tax rate from 150 dollars to 195 dollars, adding an inflation adjustment, raising caps, exempting certain small businesses, and expanding the financial hardship exemption? If there were an election today, do you think you would vote "yes" in favor of this measure, or "no" to oppose it? (IF YES/NO, ASK: "Is that definitely or just probably?") (IF UNDECIDED, DON'T KNOW, NO ANSWER, ASK: "Do you lean toward voting yes or no?") TOTAL YES 69% Definitely yes 36% Probably yes 22% Undecided, lean yes 11 % TOTAL NO 26% Undecided, lean no 4% Probably no 7% Definitely no 15 % (DON'T READ) DK/NA 5% 8. Next, I am going to read you some statements from people who oppose this measure. After hearing each statement, please tell me whether you find it very convincing, somewhat convincing, or not convincing as a reason to oppose such a measure. If you do not believe the statement, please tell me that too. (RANDOMIZE) VERY SMWT NOT DON'T CONY CONY CONY BEL DK/NA [ ]a. (OTHER TAX MEASURES) In just past two years, the City passed a library parcel tax measure and a sales tax increase, and the Y-T-A is also considering a transportation sales tax increase this year. Combined with potential bond measures and state tax increases on the November ballot, we can't afford to pay more taxes. 35% - 25% 30% 6% 4% [ ]b. (HURTS RESIDENTS/REGRESSIVE) Business taxes just get passed on to customers, and low-income residents already pay a higher portion of their income through sales taxes, which is unfair. This tax will only hurt poor residents and working families in San Jose. 34% 29% 24% 9% 4%
9 FM3 RESEARCH WT PAGE 8 [ ]c. (HOUSING COSTS) The business tax should be paid by companies, not by residential landlords and their tenants. These increased taxes will only be passed on to tenants, making already skyrocketing rental housing even more expensive in San Jose. [ ]d. (PERCENTAGE INCREASE) While it may make sense to modernize the City's business tax, the size of the tax increases in this measure are simply too large. The taxes on some business could increase 200 percent, with some landlords facing tax increases of 1,000 percent. (SPLIT SAMPLE A ONLY) [ ]e. (PENSION - SPENDING) San Jose's budget problems are driven by the cost of public employee pensions and retirement benefits. It is not fair to ask local businesses to pay more for these benefits when some City employees can retire as early as age 50 and receive six-figure pensions.- []f. (LOCAL COMPETITION) Increasing our business tax will drive businesses out of San Jose to nearby communities with lower taxes, hurting both the City budget and the local economy. (SPLIT SAMPLE B ONLY) [ ]g. (STRUCTURAL DEFICIT) The reason the City has an ongoing budget problem is that it spends too much money, not that it doesn't have enough money. This measure does nothing to fix the real problem, and instead we should look to reduce employee compensation, eliminate bureaucracy, and cut low-priority services. [ ]h. (IMPROVING ECONOMY) Given our improving local economy, this measure simply isn't needed. The City is predicting growth in tax revenues over the next several years, making it unnecessary to further tax local businesses. VERY SMWT NOT DON'T CONY CONY CONY BEL DK/NA 40% 29% 21% 6% 4% 69% -31% 26% 24% 13% 6% 56% -40% 24% 23% 8% 5% 65% 32% 29% 25% 10% 4% 61% 31% 24% 31% 9% 5% 55% -25% 23% 35% 12% 5% 49%
10 FM3 RESEARCH WT PAGE 9 (RESUME ASKING ALL RESPONDENTS) 9. Now that you have heard these statements, let me ask you one last time about the potential ballot measure we have been discussing. To refresh your memory, it would modernize the 1986 San Jose business tax to fund essential City services in San Jose - such as police patrols, emergency response, street repair, and park maintenance - by increasing business tax rates, including the base tax rate from 150 dollars to 195 dollars, adding an inflation adjustment, raising caps, exempting certain small businesses, and expanding the financial hardship exemption. If there were an election today, do you think you would vote "yes" in favor of this measure, or "no" to oppose it? (IF YES/NO, ASK: "Is that definitely or just probably?") (IF UNDECIDED, DON'T KNOW, NO ANSWER, ASK: "Do you lean toward voting yes or no?") TOTAL YES 63% Definitely yes 31 % Probably yes 19% Undecided, lean yes 13% TOTAL NO 32% Undecided, lean no 6% Probably no 9% Definitely no 17 % (DON'T READ) DK/NA 5% NOW I WOULD LIKE TO ASK YOU ABOUT A DIFFERENT POTENTIAL CITY OF SAN JOSE MEASURE THAT MAY APPEAR ON A FUTURE BALLOT. 10. If approved by voters, this measure would do two things. First, it would allow commercial development of about one-point-three acres of McEnery Park in Downtown San Jose in order to support local job creation. Second, it would require the creation of new parks in the downtown area that would be greater in area than the land developed in McEnery Park. The acquisition and creation of these new parks would be paid for by those developing this portion of McEnery Park at no cost to the City. If there were an election today, do you think you would vote "yes" in favor of this measure, or "no" to oppose it? (IF YES/NO, ASK: "Is that definitely or just probably?") (IF UNDECIDED, DON'T KNOW, NO ANSWER, ASK: "Do you lean toward voting yes or no?") TOTAL YES 62% Definitely yes 35 % Probably yes 19% Undecided, lean yes 8% TOTAL NO 27% Undecided, lean no 6% Probably no 9% Definitely no 13% (DON'T READ) DK/NA 11 %
11 FM3 RESEARCH WT PAGE Next, I am going to read you two short statements about this measure - one from supporters and one from opponents. (RANDOMIZE STATEMENTS) [ ] FIRST/NEXT, supporters say this measure would take advantage of a one-time opportunity to create more good-paying jobs in the City from a local company, create more public parking, strengthen the vitality of Downtown San Jose, and actually increase the amount of park land in the downtown area at no cost to the City. [ ] FIRST/NEXT, opponents say this measure puts the development priorities for a multi-billion-dollar corporation ahead of local parks and residents, lose valuable and scarce urban open space, with no real guarantee that the loss of McEnery Park will really be replaced by new parks in Downtown. Having heard these statements, if there were an election today, do you think you would vote "yes" in favor of this measure, or "no" to oppose it? (IF YES/NO, ASK: "Is that definitely or just probably?") (IF UNDECIDED, DON'T KNOW, NO ANSWER, ASK: "Do you lean toward voting yes or no?") TOTAL YES 58% Definitely yes 30% Probably yes 19% Undecided, lean yes 9% TOTAL NO 34% Undecided, lean no 6% Probably no 12% Definitely no 15% (DON'T READ) DK/NA 8% HERE ARE MY FINAL QUESTIONS. THEY ARE JUST FOR STATISTICAL PURPOSES. 12. (T) Are there any children under the age of 18 living in your household? 13. (T) What was the last level of school you completed? Yes 30% No- 68% (DK/NA) 2% Grades 1-8 1% Grades % High school graduate (12) 16% Some college 20%, Business/vocational school 4% College graduate (4) 34% Post-graduate work/professional school 20% (DON'T READ) DK/NA/Refused 3 %
12 FM3 RESEARCH WT PAGE (T) I don't need to know the exact amount but I'm going to read you some categories for household income. Would you please stop me when I have read the category indicating the total combined income for all the people in your household before taxes in 2015? $30,000 and under 10% $30,001 - $60,000 13% $60,001 -$75,000 12% $75,001 - $100,000 12% $100,001 -$150,000 15% More than $150,000 13% (DON'T READ) DK/NA/Refused 24% 15. (T) With which racial or ethnic group do you identify yourself: Latino or Hispanic, African-American or Black, White or Caucasian, Asian or Pacific Islander, or some other ethnic or racial background? (IF ASIAN OR PACIFIC ISLANDER, ASK: "Are you Vietnamese, Chinese, South Asian, or East Indian, or of some other Asian background?) Latino/Hispanic 20 % African- American/Black 4 % White/Caucasian 47 % Vietnamese 8% Chinese 2% South Asian/East Indian 7 % Other Non-Asian/Pacific Islander 1 % Other Asian/Pacific Islander 3% (DON'T READ) Mixed race 4% (DON'T READ) DK/NA/Refused 4% 16. And lastly, were you born in California, born somewhere else in the United States, or born in a different country? Born in California 42% Born somewhere else in the United States 28% Born in a different country 25 % (DON'T READ) DK/NA/Refused 5 %
13 FM3 RESEARCH WT PAGE 12 THANK YOU VERY MUCH FOR YOUR TIME AND ATTENTION TO MY QUESTIONS. Gender by observation: Male 48 % Female 52% Language by observation: English 88% Spanish 6% Vietnamese 6% Party: From file FLAGS P10 44% G10 59% P12 41% G12 81% P14 46% G14 63% BLANK 10% VOTE BY MAIL 1 13% 2 8% 3+ 41% BLANK 38% PERMANENT ABSENTEE Yes 70% No 30% HOUSEHOLD PARTY TYPE D1 28% D2+ 12% R1 9% R2+ 6% H+ 18% Mixed 27 % Democrat 48 % Republican 21% No Party Preference 27 % Other Party 4% AGE % % % % n% % % % Blank 0% CITY COUNCIL DISTRICT 1 io% 2 10% 3 8% 4 9% 5 7% 6 12% 7,7% 8 11% 9 13% % NEW REGISTRANT Yes 10% No 90% A/B SPLIT A 50% B 50%
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