Measure GG proposes a special tax on natural gas use on bigger buildings, but some business owners believe it’s too expensive and could force them to close.
BERKELEY, Calif. – As Election Day approaches, there is a controversial debate between the economy and the environment on the ballot in Berkeley.
Measure GG proposes a special tax on natural gas use on bigger buildings, but some business owners believe it’s too expensive and could force them to close.
Supporters of GG said the goal is to incentivize the switch to cleaner energy. It proposes a new tax on natural gas use for all buildings more than 15,000 square feet, including residential buildings, businesses, and certain non-profits.
Brianna McGuire, a plant pathologist who is a supporter of the measure, said, “The 609 buildings that would be taxed by this measure make up 1.5% of Berkeley’s building stock, but they emit about 23% of Berkeley’s emissions.
The tax would start at just under three dollars per therm of natural gas and increase each year with inflation, plus 6%, until 2050.
“We want to make it more expensive for the folks who are using more and help folks who are in the most financial need transition,” said McGuire.
Dr. Ashley McClure, a primary care doctor in the East Bay and the co-director of Climate Health Now Action Fund, said the use of natural gas is dangerous for both public health and climate change, as the earth is expected to warm three degrees Celsius this century.
“There’s nothing healthy about having natural gas appliances,” she said. “Whether it’s a stove or a water heater, natural gas, when we burn it, it releases things like particulate matter, nitrogen dioxide, carbon monoxide, that are all known to be extremely harmful to our health.”
On the other side of the aisle stands Tom Parrish, the managing director of Berkeley Repertory Theatre.
“We believe in electrification, and we believe in the intention of this measure but it’s very ill-conceived in how it’s being implemented,” he said.
Parrish said six of the non-profit’s seven buildings are eligible for the special tax if Measure GG passes.
“It would triple our cost of natural gas, which is untenable as we’re trying to come back from the pandemic and rebuild audiences,” he said.
Parrish said switching over to another energy source would cost the organization millions.
Boichik Bagels CEO and Founder Emily Winston said the tax will hurt restaurants and commercial tenants renting space in large buildings, putting small businesses in jeopardy.
City Attorney Farimah Faiz Brown’s impartial analysis on Measure GG states, “The tax would be charged to building owners, who would be prohibited from passing the tax onto tenants in residential or mixed-use buildings in the form of increased rent or costs.”
However, Winston said in every commercial lease, increased fees are brought down to the tenant.
“There’s a number of restaurants who are saying they’re not going to be able to survive,” Winston said.
She said she’s spent hundreds of thousands of dollars on specialized ovens and equipment that run on gas to make the bagels for multiple store locations, and replacing them could cost a quarter of a million dollars.
A report to city council estimates the proposed tax on the bagel shop’s factory will cost about $10,000 the first year, but Winston said those numbers are not accurate and don’t account for other expenses. She said the actual increase would be about $46,000, according to her energy bills.
“It’s a real problem, and it makes me consider do I really want to continue to grow this business in Berkeley,” said Winston, who has eight locations and is growing her business to Southern California.
Popular grocer Berkeley Bowl is reporting an additional increase to $280,000 annually, calling it “unsustainable,” in a city ballot guide.
Opponents include Mayor Jesse Arreguin, Vice Mayor and District 6 Councilmember Susan Wengraf, and Berkeley Rent Stabilization Board Commissioner Stefan Elgstrand.
The ordinance was proposed by Fossil Free Berkeley. Supporters include Berkeley NAACP President Tajmal Payne, SF Bay Physicians for Social Responsibility Commissioner Nathan Mizell, and Berkeley Environment and Climate Commissioner Daniel Tahara.
“It’s going to cost money, there’s no way around that. It’s money really well spent,” said Dr. McClure.
If passed, the proceeds from the tax, which is estimated at $26.7 million a year, will be used towards clean energy and climate change initiatives in Berkeley. It would go into effect on Jan. 1, 2025.