Measure BE asks Monterey Park residents if the business tax should increase

The city of Monterey Park wants to raise $1.2 million funds to use for general city services such as keeping public and business areas safe and clean, preventing crime such as theft and strengthening the local economy. The catch is that with most measures, taxes will usually rise. But in this case, there’s a twist with Measure BE.

By revising the business license tax to at least $75 per $1,000 of gross receipts, some businesses could actually see no change or even a decline in their tax rate, according to a city staff report about the measure.

Scenarios the staff drew up show that most restaurants would see a reduced tax amount. The current rate is $105 and would decrease to $75, according to the report. For doctor's offices, it would increase from $600 to $1,302.50 and for a big retailer, it would increase from $4,185 to $13,712.50.

The city reports that it would not affect residents since no other taxes are being increased -- not directly anyway. 

Some business owners said they’d have to raise prices in order to pay for expenses and still have some profit, so that would impact shoppers in the city who have already been hit by inflation.

Chris Tran, a business owner of ABC Motors and a resident in Monterey Park, said it’s a no-brainer for him to vote “no” on the measure.

“It would make me raise my prices of course to meet my yearly income. Why would I [want to] pay $9,000 more? If my income is $100K a year, that is now $91,000 minus the income tax rate,” Tran said. “So I get taxed twice.”

Supporters of the measure say that improving the look and feel of the city could help bring in more tourists, which in turn would strengthen the local economy with new jobs and more tax revenue.

“Some places add hotels and dining areas to increase the number of tourists,” Susanna Chen, a Monterey Park resident, said, adding that this is important to do especially since the pandemic, which led many businesses to close.

Chen said she also believes that it is good for the city government to increase the business tax since the city could use funds for critical new projects such as the Celadon project to make new housing. 

But business owners like Tran questioned the premise that the city could solve its problems with more money.

“Taxing businesses more won't make crime rates go down and all that other [garbage] listed. It will happen regardless,” Tran said. “Streets will still be dirty, theft will still happen, crime [will] still be the same.”

Some businesses might even move away due to the new tax, opponents said.

The businesses that remain in the city would need to find new ways to fund the tax, said Jason Chen, the manager of Delicious Food Corner in Monterey Park.

“It accounts for a lot of things like, do we increase [the price of] dishes?” said Jason Chen, the manager at Delicious Food Corner, located in Monterey Park. “Do we increase the operational part just to deal with this new measure?” 

Some local businesses’ suppliers are also in Monterey Park, so those costs could also increase.

He added, “Since a restaurant is running a lot of operations, this could mean suppliers would increase their prices.”