Small Oakland retailers, already suffering because of the recession
and the proliferation of Internet shopping, are angry about the City of
Oakland’s decision to begin collecting a hefty new business tax. The
fees could amount to more than $600 per business and apply to sellers
of used goods — such as used book, clothing, record, and toy
stores, and antique shops. The city has sent letters to dozens of such
retailers across Oakland, demanding that they pay the tax and force
their employees to be fingerprinted, or face additional penalties.
But the city’s demand is sparking a revolt — not unlike the
backlash over the council’s decision this summer to raise parking meter
rates and extend hours to 8 p.m. One retailer said she does not intend
to pay the tax. “I don’t think this should apply to our business,” said
Amy Thomas, owner of Pendragon Books, a bookstore on College
Avenue in Rockridge that sells new and used books. Thomas, who also
owns Pegasus Books in Berkeley, said that the City of Berkeley has
never attempted to implement such a tax. Nor has the City of
Alameda.
Traditionally, the tax has applied only to pawnbrokers. It’s based
on the state’s Secondhand Dealers’ law, a 50-year-old statute written
to help law enforcement track stolen goods. Historically, cities, which
collect the tax and can keep most of its proceeds, have exempted
businesses not usually associated with the stolen-goods trade —
such as used bookstores and antique stores. Pawnshops, by contrast,
have had to pay the tax.
But in the past few years, several cities have begun imposing the
tax on other businesses, too, said Carl Brakensiek of the
California Alliance of Resale Merchants and Collectors, a statewide
trade group that has followed the issue. As the economic downturn has
bludgeoned city budgets, local officials have desperately searched for
ways to raise revenues. “Some municipalities are doing this while
others have chosen not to,” Brakensiek said of the tax.
In Oakland, however, sudden implementation of the tax does not
appear related to a search for new revenues. Instead, employees
apparently took it upon themselves to launch the program. Nancy
Marcus, whose title is “administrative assistant 1 for special
events permits,” said that two new employees had discovered that
Oakland could legally require many retailers to apply for license like
pawnbrokers, and then begin collecting the fees.
So in an August 13 letter that Marcus said she sent to 48 Oakland
retailers, she told business owners they had to pay $310 for an
application fee, $195 for a state license fee, and $57 to $67 to
fingerprint each employee. Businesses must pay annual fees in
succeeding years. Marcus gave business owners a deadline of September
10 to comply. Under state law, once a business acquires a secondhand
dealers’ license, they must keep meticulous, detailed notes of every
item they buy and sell, including the private personal information of
the persons involved in each transaction. Failure to comply with the
law is considered a misdemeanor that carries a fine of up to $1,500 or
two months in county jail.
The law makes sense for pawnbrokers, but applying it to used
bookstores or antique shops is another story. Oakland’s implementation
of the law also appears to have been arbitrary, and not the result of
an exhaustive effort to determine exactly who the law should apply to.
After all, in addition to pawnbrokers, there have to be more than 48
businesses that buy and sell used goods in Oakland. In fact, under a
liberal reading of the law, there is no reason it shouldn’t also apply
to garage sales.
The license tax also gives another advantage to online giants such
as Amazon.com and eBay, which won’t
have to pay the fees, fingerprint people, or maintain cumbersome
records, even though they also transact used goods and already have an
edge because they don’t charge sales tax. “If I have to do it,” Thomas
said, “I think everybody should have to do it.”
Ironically, a 2006 bill authored by Leland Yee, a state
legislator from San Francisco, would have specifically exempted used
bookstores and antique shops (but not used clothing or toy stores) from
the law. The bill was specifically aimed at coin dealers and was pushed
by pawnbrokers who wanted coin dealers and other merchants to help pay
for a multimillion-dollar statewide electronic database to track stolen
goods — which, to this day, does not exist. But retailer
associations and Internet sites helped defeat the bill because they
said it would hurt business. They also knew at the time that most
cities, including Oakland, weren’t collecting the tax from anyone other
than pawnbrokers.
Van Hools Have Been Accident Prone
Top AC Transit officials admitted publicly last week that many of
their Belgian-made Van Hool buses have been accident-prone and costly
to maintain. The public acknowledgement was significant because top
agency officials have staunchly defended AC Transit’s exclusive
contract with the firm and argued that the Belgian buses are superior
to American-made ones, despite the fact that the agency’s own records
show the Van Hools are dangerous for the elderly and for people with
mobility problems.
The surprising admission, which was also made by agency General
Manager Rick Fernandez, one of the biggest backers of the Van
Hools, came during an AC Transit Board of Directors subcommittee
meeting. Board member Greg Harper had asked agency staff to
compile a report on bus maintenance costs. The report revealed that
some Van Hool models have been accident prone, while others,
particularly the 60-foot accordion-style buses, are costlier to
maintain than the other buses in AC Transit’s fleet, even though they
are much newer and thus should be cheaper to keep running. Agency
records show that Van Hools are more expensive to buy than some
American-made buses.
The revelations prompted Harper to question his support for the
Belgian buses over the years. “I have sat up here and defended the Van
Hools … thinking that we had a better model bus,” he said. “Maybe I
made a mistake.”
At first, Fernandez attributed the higher repair costs to Van Hools
being assigned to busier bus lines that have more stops and carry more
passengers, which puts more wear-and-tear on the vehicles. But after
questioning by Harper on why some of the Van Hools, specifically the
forty-foot model, have more accidents, break down more often, and have
higher parts costs than some older American-made buses, AC Transit
staffers, including Fernandez, also blamed the unusual design of the
bus. “The lion’s share of it … it’s the tail swing,” said the author
of the report, AC Transit Director of Maintenance Bob Bithell,
referring to the forty-foot Van Hool model. “Those buses smack a lot of
things when they move in and out of bus stops.”
As this newspaper has previously reported, AC Transit bus drivers
have long complained about the long back end of the forty-foot Van
Hools, one of the workhorses of the agency’s fleet (see “The Buses from
Hell,” 1/23/08) The bus’s peculiar design includes a short wheelbase,
which makes it harder to maneuver and creates a bouncy ride. In fact,
some bus drivers refuse to pull completely into smaller bus stops
because the long tail end of the bus swings dramatically back and forth
and hits things. Those drivers stop the bus in the street, blocking
traffic and forcing riders to step off the curb and walk out on the
street to get on board. In fact, a bus driver was fired a few years ago
in part for getting in a fight with an agency executive over the issue
(see “Agency Fires Driver Over New Buses,” 4/2/08).
The design problem prompted AC Transit officials to require Van Hool
to modify their new forty-foot buses so that they have a traditional
wheelbases, like American buses. Fernandez noted that the new models
don’t have the same accident problems. However, there are still more
than 100 of the old forty-footers in the fleet and it’s too costly to
retrofit them. Fernandez said that bus drivers have learned how to
drive the forty-footers better, and now have fewer accidents. But
neither Bithell nor the report could substantiate that assertion,
because the report looked at bus accidents and costs over a four-year
period, from 2005 to 2009, and did not break them out by year. As a
result, Harper asked Bithell to come back with more detailed
information on bus accidents and maintenance costs, including labor
costs, along with data for how long each bus type stays in the shop
when they break down or get in accidents.
