Editor's note: The Mountain View City Council is due to vote the evening of Tuesday, June 26, on whether to place an employer tax on the ballot. The latest tax models under consideration would charge Google up to $3.3 million annually -- less than the largest amount contemplated when this article was originally published in May.

Mountain View’s mayor, Lenny Siegel, says it has “too many good jobs” and not enough transit.

The solution: Slapping a multimillion-dollar tax on Google, by far the city’s largest employer.

The tax, which may end up on the November ballot, could charge Google as much as $5.4 million annually, according to one option under discussion. Other large businesses in Mountain View like software firm Synopsys and financial software maker Intuit would pay thousands of dollars more each year, with a tax based on how many employees they have.

“Employment is growing faster than we can house people and provide transportation for them,” Siegel said at a City Council committee meeting Thursday to discuss the issue. Businesses shell out vast sums anyhow, he said: “They have to pay (higher) salaries because they can’t find workers, or they pay the tax.”

The idea of such a tax isn’t new. San Jose, Redwood City and Sunnyvale have them. But even broaching the idea can provoke clashes with businesses. A 2016 proposal by a former Cupertino mayor to charge large companies $1,000 per employee failed amid opposition from businesses.

Last week, Amazon suspended plans to build an office tower in its hometown of Seattle as it waits for the City Council to decide whether to impose a business tax based on the number of workers. It is also considering subleasing out another large space in the city, rather than adding Amazon employees there, for the same reason. The two projects together had been expected to add 7,000 jobs in the city.

Mountain View’s tax could also drive workers away, said Kimberly Burham, a managing director for the Penn Wharton Budget Model, a University of Pennsylvania research project that analyzes public policy’s fiscal impact. Companies could add jobs in nearby cities that do not have the tax. “Over time, that location becomes a less significant part for that business,” she said.

Though the majority of Google’s Bay Area workforce is in Mountain View, the company’s offices sprawl across the region, with plans in the works to expand in San Francisco, San Bruno, Sunnyvale and San Jose.

Siegel says the colossal growth of Google, which has more than 23,000 employees in Mountain View, has pushed some companies out of the city. “You want to make sure we have a climate that welcomes startups and growing companies,” he said.

Google and Synopsys declined to comment. Intuit said, without addressing the proposed tax specifically, that “we support the City of Mountain View and the decisions made for the broader community.”

If Mountain View moves forward with the new tax, it would need approval of the City Council and voters. The city could approve a measure for the November ballot in June. A council committee on Thursday discussed a model that would assess flat fees for smaller businesses and charge larger firms progressively more.

Many companies in Mountain View currently pay a $30 annual business license fee, regardless of staff size. That flat rate, which the city also wants to increase for small employers, raises roughly $250,000 a year for the general fund from the thousands of businesses registered in the city.

The state Department of Finance lists Mountain View with a population of 81,527, and the census says that 69,307 people work in the city. The city said that 3,661 businesses have officially reported that they have 64,442 workers.

Siegel is leaning toward a tax that could raise $10 million — of which Google could pay roughly half. That proposal, potentially the most lucrative of several under consideration, would be far more expensive for big businesses than the similar taxes already in place in Sunnyvale and San Jose. For example, a business with 1,001 employees would pay $147,255 under the Mountain View proposal. That same business would pay $11,769 in Sunnyvale and $60,135 in San Jose, according to Mountain View city data.

Other tax structures could raise less, although one critical question still under discussion is whether to cap the amount the largest businesses — read, Google — would pay. The particulars are still being discussed and are likely to change.

Tony Siress, CEO of the Mountain View Chamber of Commerce, said the city should worry about losing jobs to neighboring Sunnyvale.

He also expressed concern for smaller businesses that are just large enough to be charged based on the number of workers. He pointed to Pure Storage, a cloud data-storage company that has 950 employees, according to city data.

“If we don’t pay close attention, we could lose (those businesses), or they may not show up here in the first place,” Siress said at the recent committee meeting.

San Francisco, which used to have a payroll tax, now charges business taxes based on gross receipts. The city collected $702 million in business tax revenue in its most recent fiscal year. Ted Egan, San Francisco’s chief economist, said a per-employee tax is seen as more regressive than a payroll tax.

There are also concerns over how Mountain View will spend the tax money. Carl Guardino, CEO of the Silicon Valley Leadership Group, a trade association focused on public policy, said his members prefer that the revenue go toward a specific use. “We are not antitax, but we are pro accountability,” he said.

Tech companies in the Bay Area have contributed money for transportation improvements — like Google’s funding of the Mountain View Community Shuttle — but generally it is not nearly as much as communities want, which is why taxes based on workforce size are gaining support.

“If one city takes this action and it does well on the ballot, I think that would encourage other cities to look at this measure,” said Rod Sinks, Cupertino’s vice mayor. Barry Chang, a Cupertino councilman who pushed unsuccessfully for such a tax during a stint as mayor, said he plans to raise the concept at a City Council meeting next month — with worsening traffic as a prime incentive.

Siegel, the Mountain View mayor, said he would like to see most of the tax money go toward transportation. But he is open to also using some of the revenue for housing and other problems. If the city uses the tax for a specific purpose like transportation, it would require two-thirds voter approval in November. If the money were for general use, the tax would need approval from a majority of voters. In a recent city-funded survey of more than 1,300 voters, 67 percent said they would support an employer tax going toward general use.

Mountain View resident Donald Letcher told council members that the per-employee tax is perhaps the “only fair new tax that would be viable in the city for residents,” because it would address the increased traffic caused by employers like Google.

The city is considering three measures that could be placed on the ballot, including a tax on retail sales of cannabis and a higher tax on hotel guests. Council members said that they would favor putting two of the three on the November ballot, and Siegel thinks the employee tax will be one of them.

“My personal belief is that the shortage of housing and the lack of good transit is more of a threat to the operation of our tech companies than the tax at the level that we are proposing,” he said.

Wendy Lee is a San Francisco Chronicle staff writer. Email: wlee@sfchronicle.com Twitter: @thewendylee

Mountain View’s largest employers

Google 23,324

Symantec 2,789

El Camino Hospital 2,500*

Synopsys 2,377

Intuit 2,370

Microsoft 1,200

LinkedIn 1,177

Samsung 1,100

*Nonprofits and medical facilities would be exempted from the proposed business tax increase.

Source: City of Mountain View