GG: No on Poorly Crafted Measure for Large Buildings Fossil Fuel Tax

GG: NO on Poorly Crafted Measure for a Large Buildings Fossil Fuel Tax

At first blush, Measure GG looked good: it taxes something we want to reduce (natural gas use) and uses the revenues to support good things. But after I read more about its impacts and the nuances of the measure, I concluded that Measure GG is a poorly-crafted measure that won’t actually incentivize lower emissions in a fair and sustainable way. I hope proponents will go back to the drawing board and work with the city to put a better plan forward. 

I'm voting No on GG. 

The tax is unfair and would hurt Berkeley treasures: Measure GG taxes natural gas use in commercial and residential buildings in Berkeley that are larger than 15,000 square feet). To make sure the tax generates enough revenue, proponents set a high tax rate and sharply limited exemptions. For example, the measure says the city council can exempt small non-profits, but the city’s impartial analysis found that there are no Berkeley non-profits that could qualify because the measure’s definition of “small” is too restrictive. So Alta Bates Hospital, YMCA, and several theater and arts organizations would face significant increases to energy costs. The two most impacted sectors would be grocery stores (think Berkeley Bowl) and many restaurants. 

The tax is too high and won’t incentivize changes in behavior: when you design a tax primarily to affect behavior (vs. primarily to raise revenues), you should phase it in and give potential targets lots of ways to comply and reduce their tax burden. Measure GG doesn’t do that. The tax would go in place all at once in February 2026 and it is predicted to raise $26+ million/year, from just 609 buildings in the city. 

Organizations with these buildings can’t just immediately change their systems for cooking, heating/cooling, refrigeration, systems -- often they are very expensive equipment that only makes sense to replace systems when the existing equipment is at or near the end of its useful life -- from an environmental as well as financial perspective, so we don’t waste the embodied energy in the original equipment. 

Unfair uses of funds: The city must use almost all of the expected $26.7 million/year to convert existing buildings away from natural gas, but the measure says they must prioritize low-rise residential buildings and restaurants. So there’s a tax on large buildings, but many beneficiaries will be single-family homes -- that doesn’t seem fair. A fairer measure would use the tax’s revenues to pay for ways that entities subject to the tax could reduce their natural gas use. 

And when you think about it, why should it be just large buildings that have to pay a tax on natural gas use? Why should homeowners be exempt? It doesn’t seem right that apartment buildings have to pay a tax on natural gas use while people in homes don’t. 

The tax may cause rent increases in large apartment buildings. The measure says landlords aren’t allowed to pass tax costs on to renters, but my understanding is that provision is likely illegal. So if the tax passes and that provision is successfully challenged, then renters will get rent increases, while homeowners are unaffected. Again, that doesn’t seem fair. 

I understand that some power players oppose GG because they don't want a fossil fuel tax, or don't want a tax on business, or other arguments like that. Those are not my reasons. I do want a good fossil fuel tax and I'd be happy to charge big business for it. But I also think homeowners should have to pay it, and it would probably do more to change people's behavior. This is not the right measure to do that. 

If you want to learn more:

• Read the city’s impartial analysis. It’s kinda dense. But it’s packed with concerns (albeit expressed in opaque bureaucratic language)
• See the No on GG campaign website -- endorsers include 5 (of the 9) Berkeley Councilmembers, Skinner-Wicks-Hancock-Bates, and many others. 
• See the Yes on GG campaign -- as you’d expect, it has endorsements from several environmental and progressive political groups. But oddly, no elected officials. Does that mean no elected officials have endorsed GG?