Measures D and E on this year's ballot are increases in the Business License and Transient Occupancy Taxes. If approved, both would be phased in over a two- or three-year period, ultimately providing an additional $1.4 million in revenue to the city.

With the city's annual budget deficit at just about $1.7 million, that could help the city almost break even.

Because the totals in anticipated revenues from these taxes are based on the number and size of Sunnyvale businesses and the number of hotel guests respectively, the revenue could increase if the economy picks up in the area.

Even if the increases are voted in, both taxes will still be lower than those of other South Bay cities.

"We would be working toward bringing our tax structure in line with other cities in the area, and the revenue would benefit the city," said Peter Gonda, senior management analyst for the Sunnyvale Department of Finance. "It would allow us to continue to provide the services that residents have come to expect from the city of Sunnyvale."

There has not been an increase in the city's Business License Tax since 1976

"It was clear that it needed to be adjusted, even if just for inflation," Mayor Dean Chu said. His council approved the ballot measure on June 7.

Gonda said the taxes were intentionally kept low to attract commercial residents, but there is a balance between attracting business and maintaining services.

"Sunnyvale has always worked to keep our taxes and fees competitive. We don't want to be in an overtaxing situation, but we also need to balance that with a need to stay competitive in other areas," Gonda said.

Businesses in Sunnyvale currently pay a base tax of $10 for each employee or rental unit. If a Sunnyvale business has more than five employees or rental units but fewer than 11, it pays $20 per employee. Larger companies, with more than 11 employees or rental units, pay $30, up to a cap of $300.

If approved, the base tax would be $30 for one employee or unit, $50 for two to five and $50 for each additional group of five employees. The cap would increase to $4,250 for rental units and $9,500 for employees. The base tax increase would increase over two years, and the cap would increase over three. All figures would continue to be adjusted annually as inflation rates fluctuate.

Il Postale owner Joe Antuzzi said his current tax is around $70 and that could quadruple and still be reasonable.

"It's hard to argue with our business tax because it's so cheap," Antuzzi said. "It's a small fee, and I think that even the people being hit hardest by it can afford it."

While he doesn't mind paying it, Antuzzi said something more universal--such as a utility rate increase--would be more equitable and profitable by bringing money in from everyone in Sunnyvale.

"I just hope the city realizes it can't solve all its problems by just asking the businesses to help out," Antuzzi said.

By comparison, San Jose's tax maximum is $24,000.

The Transient Occupancy Tax measure--also known as the Hotel Tax--is an increase in the tax charged to hotel and motel visitors. It is currently set at 8.5 percent, but would go up a half of a percentage point each year for two years, stopping at 9.5 percent. That's the same amount Santa Clara charges, but the amount is below many surrounding cities.

The 9.5 percent works out to one additional dollar on a $100 hotel room for one night. Taken alone that increase is small, but given the number of hotels and motels in Sunnyvale, it's an additional $600,000 on top of the $5.2 million the TOT currently brings in.

In 2000, at the peak of Sunnyvale's economic boom, the TOT accounted for almost 10 percent of the city's general fund revenue, bringing in almost $11 million.

For more information on ballot measures for Sunnyvale, visit www.smartvoter.org.