Friday, May 03, 2013

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.

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.

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.

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.

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.

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.

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.

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.

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.

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Blogger just wondering... said...

Why has these fees not been collected? No reason was given.

5/03/2013 04:01:00 PM  
Blogger The Pot Stirrer said...

Insufficient resources...

5/03/2013 04:28:00 PM  
Anonymous airplane said...

start with collecting from those businesses that have not been paying for a license. City will be installing software to cross check with businesses on file with Board of Equalization. Can check DBA's too. These gardening trucks i see all over don't seem to have the license sticker on too many of their trucks. Could catch seven or eight on Thursday on my block alone. Shirley they can afford to pay 50 bucks!

5/03/2013 08:44:00 PM  
Blogger just wondering... said...

Did they lay off the guy that was supposed to collect them?

5/03/2013 08:46:00 PM  
Anonymous Tom Egan said...

There will be no tax increases as long as the Council majority sticks to their pledge to Grover Norquist. You know, the out-of-town GOP demigod who extorts the Norquist vow from every Republican politician who plans to keep his job or get elected to higher office.

The Norquist vow? To not raise taxes under any circumstances. Not even if you have told the people who elected you that the city is in a financial crisis. You know, like Costa Mesa.

How awkward to have made that flat promise to the out-of-town guy. How can you also be faithful to your vow to the people who elected you.

How can a man serve two masters?

5/03/2013 08:58:00 PM  
Anonymous EDD calling said...

I have an idea! Jim Fitzpatrick is unemployed and I’m sure he would LOVE to be the enforcer. When he was on the San District, he couldn't wait to impose steep fines on ratepayers. He often said, “nothing speaks louder than hitting them where it hurts…in the wallet!” Take no prisoners, right airplane?

5/03/2013 10:26:00 PM  
Anonymous Book em said...

Hey airplane, don't forget about catching all the scavengers on your street as well. Steep fines await, right?

5/03/2013 10:34:00 PM  
Anonymous airplane said...

if some pay business license fees then the gardeners should too. since the taxes, which is what they are called, have had pretty much flat revenue for many years it is obvious that many are not paying, just the same ol, same ol. why should gardeners be a protected class? Shirley they can be taxed like the rest of us.

5/04/2013 09:03:00 AM  
Anonymous Eleanor Egan said...

Insufficient resources.... In other words, the tax is so low it would cost more to collect it than the effort would bring in?

5/04/2013 07:38:00 PM  
Anonymous airplane said...

MV: quit watching gladatior movies and listening to show tunes and watch the movie called "airplane".
and stop calling me Shirley.

5/05/2013 09:15:00 AM  
Anonymous MV said...

You try dragging Walton and Lanier up and down the court, Airplane. You clearly picked a bad week to quit sniffing glue.

5/05/2013 10:13:00 AM  

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