Lisa Tana fears a proposed sales tax hike would be bad for her new business, re4m in Montclair Village. 

The City Council will vote Thursday on a number of ballot measures aimed at generating revenue to deal with Oakland’s growing budget deficit. One of the handful of ballot measures – which include amending measure Y, and a beefier tax on local ganja growers – is a proposed one-quarter of one percent sales tax hike. If the City Council votes to put the measure on the ballot, and voters approve it in November, Oakland’s sales tax will be an even 10 percent.

Among the city’s small business owners, who are already struggling with a flat economy, there are fears that the additional sales tax will drive more customers to neighboring cities, or spur them to buy more goods and services online.

“Is the quarter percent going to stop people from shopping locally?” asked Tom Revelli, the owner of Montclair Sports for the past 40 years, “Probably not. But at some point people are going to get fed up.”

A double-digit sales tax might just be the breaking point. “It sucks for retail and retail sucks right now,” says Tracey Friley, who’s been running the downtown boutique, oo la la! for three years.

If enacted, the sales tax would kick in next summer. An even 10 percent makes for easy math, but it would also be one of the highest city sales tax rates in the state. “Ten percent? That’s a lot of money,” says Friley “That’s like a discount I might give.”

It might not stop shoppers from shopping. But, Friley says, “It will make them haggle a lot more.”

The way it’s written the quarter percent tax would exist for five years and generate an estimated $8 million annually.  Unlike other tax hikes, such as a proposed $360 a year parcel tax, this one would require only a simple majority to pass compared to a two-thirds majority. The plan is spend the extra tax money on public safety.

Oaklanders have heard that sales pitch before. “I want a personal refund on the Measure Y money,” Revelli says. He says he voted for the parcel tax increase in 2004 because he thought it was going to go to hiring more police officers. “What happened to that money?” he asks.

Last week, OPD laid off 80 cops. Even more lay-offs are expected. “It doesn’t take a PhD in business to know that you can’t keep taxing people and neighborhoods to fix what is going on downtown,” Revelli says.

A couple blocks down, the owner of Montclair One Hour Photo, Asif Hamid thinks that the tax will hurt his trade. “Sure it will effect business,” he says. “Because these days, everyone is accounting for every penny.”

Hamid, who has been in business for 11 years, is worried about crime too. “If they are going to use the money for public safety, then I’m for it,” he says. “But my business is going to hurt.”

There’s also a concern among the small business community about what’s next? Lisa Tana is a co-owner of a new retail business called re4m, a boutique shop that specializes in modern, sustainable wares. She says starting a business in Oakland hasn’t been easy and she just heard of two well-established Montclair merchants closing their doors.

Tana says that while she understands that crime is a problem, “It’s not going to get solved with a Band-Aid approach. I don’t know if it will solve anything by taking from another vital part of Oakland,” she says.

“These decisions are hard,” says Siu Ha Falcida, the owner of Montclair Florist for 12 years. She’d like to see City Hall support and promote small business, not add an extra incentive for people to do their shopping elsewhere. “If they spend the money well, then it’s OK,” says Falcida. “But if they mismanage the money, that’s not OK.”

Back downtown, Sharon Pierre just opened a retail business that sells an eclectic assortment of housewarees. She ticks through a list of challenges for the small merchant: Wages, parking. “Now you’re telling me I have to do this? People will shop less,” Pierre says. “It will hurt the city in the long run.” The name of her new shop? Making Ends Meet.