Should Perris tax warehouses for road repairs? Voters will decide in November – Press Enterprise

By Jennifer Iyer | Contributing Writer

In November, Perris voters will decide if distribution and industrial property operators with lots of large truck activity should pay more to fix the city’s roads.

If approved, Measure A would establish a special business license tax of up to 10.7 cents per square foot per year, bringing in about $4 million annually.

“Throughout the city the roads do get damaged,” Perris City Councilmember Malcolm Corona said. “Mostly it seems to be in the areas that are frequented by large trucks.”

Engineers pegged the cost to fix those roads at about $4 million a year, said Corona, who introduced the idea of a tax to his colleagues. The city came up with a tax rate to cover those expenses.

“We’re just asking them to pay their fair share,” he said.

Members of the Inland Empire Chapter of NAIOP — Commercial Real Estate Development Association, oppose the tax, but representatives could not be reached for comment.

In an argument against the measure written for official voter guides, an association representative called the proposal a “job-killing double tax.”

The “tax will slow future warehouse development, costing our community good jobs in the future and will drive businesses employing Perris residents out of the city,” the argument states.

Corona said calling the proposal a “double tax” is misleading because the facilities would only pay fees for infrastructure initially when they are built.

“But after that we’re having to foot the cost for years to come,” he said.

Proceeds from the tax would go into a separate fund and would only be allowed to be spent on road improvement, operation, maintenance and repair.

City officials estimate the tax would currently fall on 25 million square feet of completed industrial/distribution space, 5million square feet currently under construction and another 10 million square feet of projects that are planned but not yet under construction.

As of 2022, a map by Pitzer College’s Robert Redford Conservancy and Radical Research showed that Perris has the seventh-highest number of warehouses among Inland Empire cities.

According to the map, Perris has 98 warehouses, totaling 82,100,000 square feet. They take up 9% of the city’s acreage.

The city’s estimate of taxable industrial/distribution business square footage is significantly lower than the map’s total because the map may include other warehouse buildings that are not subject to the Measure A tax, according to city spokesperson Stephen Hale.

Taxable entities include:

• Distribution facilities, defined by the city as “a business consisting primarily of receiving, temporarily storing, and subsequently distributing goods, wares or merchandise of any kind to wholesalers or retailers.”
• Industrial businesses “consisting primarily of indoor or outdoor storage of large trucks or a business consisting primarily of indoor or outdoor manufacturing with large truck activity”

The tax rate would be adjusted annually in relation to the consumer price index and the tax would expire in 30 years.

According to the city’s website, many neighboring municipalities have business license taxes, including Menifee, Riverside and Moreno Valley. Unlike Perris’ proposal, these taxes usually apply to all businesses, not just industrial and distribution facilities.

Corona said a resident told him about a similar warehouse tax in Redlands approved by voters in 2022, which inspired the Perris proposal.

Fixing these roads will make them safer for everyone, especially truck drivers and warehouse workers, he added.

The Perris City Council decided to hold a special election on Nov. 7 rather than wait for the next general election because the need is ongoing.

“Our roads need support as soon as possible, and so we just felt like we would leave it up to the voters to decide,” Corona said. It’s “much needed” he added, “sooner rather than later.”

To pass, Measure A would require two-thirds approval of participating voters.

A warehouse tax with a similar threshold failed in Pomona in 2022. Though a majority of voters approved it, the measure could not garner 66% approval.

This is not the only fight Perris has taken on regarding distribution facilities.

In July, the city sued Menifee, alleging its neighbor overlooked health risk assessments and traffic issues in approval of a warehouse project on their border. That lawsuit is still winding its way through the legal process.

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