Anaheim : Council Backs Overhaul of Business License Fees

Businesses in Anaheim may see some changes in the license fees they pay after the City Council agreed Tuesday to move ahead with a plan to review and revise the tax, which has not been changed since 1958.

A recently released report by consultants Ralph Andersen & Associates said the current business license tax has several weaknesses, including that:

The tax is regressive for certain types of businesses.

Businesses headquartered outside, but doing business in, the city pay less on the same amount of business.

Similar businesses are treated differently.

The consultants were hired after debate among council members last May on whether the city should review the tax. Mayor Don R. Roth and Councilman Ben Bay criticized the proposed study as a means to an end: to raise the business license fees.

Roth and Bay, who voted last year against spending $20,000 for the first phase of the study, voted Tuesday against paying for the second and third phases: $39 to $99 an hour to review the results of the study with staff members and $30,000 to prepare a proposal for revising the tax.

Bay, after Tuesday’s meeting, said Anaheim already has “one of the best revenue bases” in the county and should be “more concerned with how the money is spent.”

Councilman E. Llewellyn Overholt Jr. disagreed, saying that “anything that has been in effect for 28 years should be studied.”

Allan Hughes, executive director of the Anaheim Chamber of Commerce, said he was “a little disappointed” that the chamber received a copy of the report shortly before the meeting and was not able to address the council.

The matter, however, was part of the routine section of the agenda and was not subject to discussion.

The fees affect about 22,200 businesses operating in the city, said Ron Rothschild, the city’s program development and audit manager. For the 1984-85 fiscal year, Anaheim netted $1.39 million in gross business license tax revenue.