RIALTO - City officials say they're open to the idea of levying a tax on the large warehouses filling up the last chunks of the city's empty land.

A tax could generate hundreds of thousands of dollars or more a year to help offset some of the costs all the big rigs inflict, like traffic and damaged roads.

"I think it could be a viable option," said Councilman Joe Baca Jr.

The idea is something city staff has talked about, said Economic Development Director Robb Steel.

In November, 71 percent of Redlands voters approved a new warehouse license tax of 3.5 cents per square foot, which will bring in about $250,000 a year. The rate will increase every year to keep up with inflation until it hits 5 cents per square foot.

Rialto has about 10 million square feet of distribution center warehouses and could add another 10 million in the next five to 10 years.

City Administrator Henry Garcia said he would have to see some numbers before coming to a conclusion about a distribution tax.

"We'd have to assess the economics of that," he said last week.

But he said he thought a distribution tax wouldn't bring in much money.

A tax at the Redlands rate could bring in a few hundred thousand dollars a year. Rialto's 8 percent tax on utilities brings in more than $12 million a year, so replacing very much of the utility tax with a distribution tax would not be easy.

Besides, the utility tax brings in a lot

of money from distributors because of their high electricity bills, Steel said.

Voters might like the idea of a distribution tax because of the pollution and damage to streets wrought by the trucks, he said.

Rialto already has a fee in place that's similar to the new Redlands tax.

In 2005, Rialto modified its business license fee policy for warehouses to allow businesses to have their annual fee calculated at a rate of 5 cents a square foot, said Greg Lantz, economic development manager.

Instead of making businesses disclose their gross receipts to calculate the fee, distributors can just pay the flat fee.

But not all the distributors pay their business license that way.

So far, no one at City Hall has done a thorough analysis of the implications of a distribution tax.

The city is still reliant on the utility tax, which provides more money to the general fund than any other source.

"Well, I think you know from the city's perspective, we've got to become more fiscally sound," Lantz said.


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