Business License Fees - No Discussion?
Earlier this week the Costa Mesa Finance Advisory Committee held their regular monthly meeting and the agenda for this one included a discussion - requested by Council Member Wendy Leece - of the Business License Fees. Bradley Zint provided a summary of that meeting in the Daily Pilot, HERE.
COUNCIL BLEW IT OFF LAST YEAR
Some will recall that there was a short, un-productive discussion of this issue in July of last year before the council - fully immersed in Charter and other election-related issues - blew off any further consideration of the subject.
THE LIMBO GAME
Presently the City Of Costa Mesa has one of the lowest Business License Fees in the county - and maybe the state. The highest fee any business pays in our city is $200. Two Hundred Bucks! The last time anything was done to the fee structure was 1985, and that was minimal. We're basically working with a Business License Fee structure that's been in place since 1961. The city receives just under $900,000 per year from Business License Fees - less than 1% of all revenues.
DISCUSSIONS SHOULD BE HELD
Nothing can be done about increasing the Business License Fee until the General Election in November of 2014, but that doesn't mean we shouldn't be talking about it. The City certainly needs more revenue, especially now, with the specter of having to give the State more than $2.5 million from the defunct Redevelopment Agency.
EXCELLENT STAFF WORK - IGNORED
Last July Finance and Information Director Bobby Young provided staff reports and excellent exhibits for the council to consider. He provided a staff report dated July 10. 2012 HERE and a discussion dated 7/12/12, that included an excellent report on Business Tax Classifications and Rate Structure Report, HERE. There is also a Comparative of business licenses of other cities, HERE, and other Business License Tax Information, HERE. I think the council slammed the door to their minds when they saw a $10,000 annual license fee for those businesses with revenues over $25,000,000 who presently pay $200. That was a deal-breaker in the eyes of many, including outspoken critic of ANY fee increase - realtor Larry Weichman. Recently, though, he's implied that he's willing to discuss some kind of change.
NO FREE RIDE
Personally, I think that $10,000 number is excessive, but some changes do need to be made to our policy. For example, ANYONE who has an active business license should pay something to keep it open and active. Currently 600 license holders pay nothing - ZERO - to keep the license active and another 2,000 pay only $25.00. In fact, more than half the total license holders - 5,750 - pay less than $100 to keep their licenses open, including businesses with gross revenues of $200,000 per year.
IMPOSE A MINIMUM
In my view, the minimum charge for keeping a business license open should be $50.00, whether there is income or not. The charges should be scaled up from there, perhaps quadrupling the fees charged to a maximum of $800 per year. I suspect Weichman, Nordstrom, Macy's, Robins Ford nor any other business will not balk at that number and it could give us an additional couple million in revenue.
PLENTY OF NEED FOR DISCUSSION
Regardless, there's plenty of information available in those exhibits linked above to generate a healthy discussion. If this council choses NOT to even discuss increasing the Business License Fee, then they are ignoring their fiduciary responsibility to this city.
YES, WE SHOULD COLLECT OVERDUE FEES
And, oh, yes, I do agree with those who say we should do a much better job of collecting the fees that are due under the current system. Perhaps we should hire the biggest, meanest guy we can find - maybe one of those early-released ex-cons - to become our Business License Fee Enforcer. He could go door-to-door with a list of deadbeat businesses and politely suggest some form of payment - or else.