Perris Council Puts Warehouse Tax Measure On November Ballot

The Perris City Council last week voted unanimously to place a warehouse business license tax measure on the November ballot. Councilmember Marisela Nava was absent.

“Our city has seen substantial industrial business growth, and it is vital that our local infrastructure keeps pace,” Mayor Michael M. Vargas said in a city news release. “By placing this measure on the ballot, we are giving Perris voters the opportunity to decide how we fund essential community priorities—such as repairing damaged streets, enhancing public safety, and maintaining city parks—without the burden landing solely on our residents.”

If approved by voters, the measure would create an annual business license tax of $0.10 per square foot on commercial warehouse facilities operating within the city and would bring in an estimated $2.5 million per year to the city’s general fund. 

The tax would not apply to industrial warehouse and distribution businesses classified as e-commerce or those under 50,000 square feet in size.

Mayor Pro Tem Malcolm Corona, at the July 28 meeting, said the city made the choice to exempt e-commerce warehouses in an effort to limit potential price increases, continue the flow of sales tax to the city from those businesses and encourage future potential developers to prioritize e-commerce activity, which generates millions in additional sales tax revenue for the city.

“I think our staff is very intelligent,” Corona said. “I think our council is very intelligent. We’ve thought about that.”

The city said it would use the funds to address infrastructure and community impacts associated with industrial and logistics facilities including heavy road wear and tear, traffic management and elevated demands on emergency services.

This is the city’s second attempt at creating a business license tax targeting warehouse operators. The first, put to the voters in November 2023 as a special tax, failed to get the necessary two-thirds support required to pass. This time, because the measure is being put to the voters as a general tax, it will only require a simple majority to pass.

Earlier this summer, voters overwhelmingly approved Measure B, a 1% general use sales tax, which is estimated to bring roughly $18 million annually into the city’s general fund. 

Many of the five speakers at the July 28 meeting raised concerns about the difference between the money being generated by the increased sales tax versus how much would be generated by the proposed business license tax.

“To see that only $3 million is going to be asked out of these warehouses in our city seems to me a bit unbalanced,” JC Franco said. “Given the fact [of what] the actual cost of these roads is going to be, it’s going to eventually be paid by the citizens of Perris through Measure B taxes.”

The final in-person speaker, a representative of the trade organization Commercial Real Estate Development Association (CREDA), spoke against the warehouse business license tax, stating that the presentation of the measure to the council had been rushed.

“I’m asking you tonight to not take this action, not rush this to the voters,” Bill Blankenship said. “At the end of the day, this tax is going to be on 25 million square feet of business owners in your community who provide jobs to tens of thousands of people.”

Blankenship said the tax would cause business owners to leave the city, creating additional empty warehouse space and a loss of jobs.

“We have a moratorium, we have a very onerous good neighbor policy,” he said. “Isn’t that enough?”

Corona pushed back on the assertion, stating that warehouse operators and developers didn’t leave the city when the council voted to increase development impact fees.

“We didn’t see a decline in warehouses wanting to come to the city of Perris,” he said. “If they do leave, it’s not going to be because of a 10-cent per square foot tax.”