Anaheim : City Will Commission Review of Business Tax

City Council members voted Tuesday to spend at least $20,000 to conduct a study that opposing council members have criticized as a step toward raising the city’s business license fees.

Rejecting a Chamber of Commerce request that it postpone deciding on the review, council members Miriam Kaywood, Lew Overholt and Irv Pickler voted for the study of the tax, which hasn’t been raised in 27 years. Mayor Don Roth and Council Member Ben Bay voted against it.

Allan Hughes, the chamber’s executive director, said the funds slated for the study are “not a good investment” of the city’s money.

The city will hire Ralph Andersen and Associates at $20,000 to do the first of three potential phases of review, an overview assessment of the current tax. Later, if the city decides to go further, it will cost $39 to $99 an hour for meetings with staff members and others to review the results of the assessment, and a further $30,000 to prepare a proposal for revising the tax.

The business license tax, which affects about 7,300 contractors, retailers and others, brought the city more than $1.3 million last year. Because the tax rate hasn’t been increased in 27 years, in some cases, the cost of issuing a license has risen beyond the revenue brought in by the tax, city officials said.

A 1976 city staff study recommending several increases was never officially released, said Annika Santalahti, zoning assistant director. Members of that council opposed raising the tax, she said.