Council to Consider Traffic Congestion Relief Measure at June 27 Meeting

Council to Consider Traffic Congestion Relief Measure at June 27 Meeting

The Problem
As home to some of the region's largest employers and fastest growing companies, Palo Alto’s vibrant economy brings thousands of motorists on local streets and roads each day.  As Palo Alto’s main roads have become more congested, commuters are using small residential streets to avoid traffic.  This creates congestion on neighborhood streets and growing safety risks for children walking and biking to school, as well as for cyclists and other pedestrians.

Local traffic congestion creates frustrations for employees as once short 15 to 30-minute commutes grow to 45 minutes to an hour or longer. As frustrations grow and congestion impacts local quality of life, traffic and transportation can become an impediment to local businesses attracting and retaining employees and sustaining economic growth.

In addition to growing traffic congestion, Palo Alto also suffers from a severe shortage of parking downtown and around the California Avenue business district.  Residents in the neighborhoods adjacent to Palo Alto’s business districts are seeing more and more shoppers park in their neighborhoods, and some people choose to shop elsewhere in the region rather than try to find parking in Palo Alto.

A Proposed Solution
Palo Alto is one of the only cities in the Bay Area that does not charge a business tax to provide funding to help address issues like traffic congestion and parking. Currently, Palo Alto registers businesses of all sizes for just a flat fee of $50. Other cities in the region charge business taxes based on a company’s number of employees or gross receipts. To provide locally controlled funding to help address parking and traffic congestion, the Palo Alto City Council is considering placing a measure on the November 2016 ballot to establish a traffic congestion relief tax on businesses based on the number of employees working for the business in Palo Alto.

Funds from the Traffic Congestion Relief Measure could be used to reduce the number of cars on the road with expanded shuttle service and trip planning, pedestrian and bicycle improvements, upgraded traffic signals and intersections and improved parking availability.  Funding for these projects would come from an annual flat tax on businesses based on the number of full time employees based in Palo Alto. Exemptions and discounted rates may be offered to small businesses and non-profits. The proposal currently under consideration would exempt small businesses and non-profits with 10 or fewer employees, charge a discounted rate of $50 per employee for businesses with 11 to 50 employees.  Businesses with 51 or more employees would pay $100 per employee. The current proposal also requires an independent citizen oversight committee to review expenditures and report to the public.  An automatic sunset date and other taxpayer accountability protections are also being considered.

Community Input
To help inform key decisions, the of City of Palo Alto has conducted several surveys of local voters and businesses regarding the concept of a traffic congestion relief measure and has also met with local business leaders to discuss the proposed measure. 

On June 27, the Palo Alto City Council will meet to discuss whether to proceed with placing a traffic congestion relief measure on the November 2016 ballot and the final rates, structure and other features of a measure.  The City invites Palo Alto residents and business representatives to attend this meeting of the City Council and share your opinions. This item will be discussed at approximately 7:45 pm in the City Council Chambers on the first floor of City Hall at 250 Hamilton Ave.

If you cannot attend, but would like to provide feedback, please send an email to

Last Updated: June 21, 2016