Cupertino delays revenue decisions, asks staff for comparative tax analysis and polling
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Summary
After staff presented options (vacancy tax, transaction and use tax, parcel tax, business license/gross receipts tax, rideshare/business license tweaks and utility user tax renewal), the council directed staff to return March 17 with comparative data on business tax and UUT, preliminary polling options for a public‑safety sales tax, and potential expenditure reductions to avoid or minimize tax measures.
City staff and HDL consultants presented a menu of revenue options Feb. 19 as part of an informational briefing on long‑term fiscal stability. The consultant described six primary mechanisms: a vacancy tax, a local transactions and use tax (TUT) add‑on to sales tax, a parcel tax, an expanded business license/gross receipts tax, targeted business license charges for rideshare operators, and the option to renew the existing utility user tax (UUT) that expires in 2030.
HDL estimated rough revenue ranges and constraints: a Cupertino‑level vacancy tax modeled on Oakland could raise about $1.4 million annually (legal challenges noted in other jurisdictions); a TUT quarter‑point could produce roughly $5.4 million (but Cupertino’s available add‑on capacity is limited and Measure A and other county measures affect the cap); a parcel tax range depends on parcel base and could vary widely; a business license gross‑receipts model could generate between $2 million and $10.2 million depending on rate structure; and UUT renewal would sustain an existing revenue stream rather than materially increase near‑term revenue.
Council members questioned passthrough effects to consumers and businesses, administrative complexity (especially for rideshare or operator‑based taxes), competitive impacts for recruiting or retaining businesses, and whether Measure A, VTA or county ballot measures create exemptions or affect Cupertino’s ability to adopt a TUT. Staff estimated polling would cost roughly $40,000 and a full consultant/outreach package $150,000–$200,000 with total ballot placement costs near $300,000–$350,000.
Public comments urged a focus on spending reductions and workforce reviews rather than new taxes. After deliberation, the council moved and unanimously voted to continue the item to March 17, 2026. Direction to staff included targeted follow‑up on three options (business tax, UUT renewal and TUT/public‑safety sales tax), comparative revenue and business competitiveness data from peer cities, polling scope for a public‑safety measure, and an analysis of potential reductions (CIP or staffing) to reduce the need for a ballot measure.
