GARDEN GROVE : Council OKs Hike in Business License Fee

The City Council voted 3 to 2 last week to raise the city’s business license fee for the first time since 1974.

The fee, which will now be based on a business’s annual gross receipts instead of a yearly flat rate, was increased to help balance the city’s $46-million budget for fiscal year 1991-92.

The change in procedure is expected to bring the city an additional $600,000 in revenue and help reduce a $5.6-million budget deficit. The fee has a $3,000 cap so that larger businesses won’t be unfairly penalized, city officials said.

Garden Grove businesses currently pay an average of $47 a year in business license fees, less than half of the $98-per-license average for the rest of the county, said City Controller Anthony J. Andrade.

Councilman Mark Leyes said a business license increase has been long overdue.

“I think an increase would have been worth looking into even if we weren’t in a budget crunch,” Leyes said. “We are trying to raise necessary revenue for the services we’re trying to provide to business owners and to the rest of the city. One of my goals is to see that the business community is paying their fair share of that.”

Councilman Frank Kessler voted in favor of the higher fee but insisted on the $3,000 cap and a $600,000 limit for city coffers.

“I don’t want this to be a windfall for the city,” Kessler said. “If it comes out that the city makes more than $600,000, I think the fee should go downward.”

Councilmen Robert F. Dinsen and J. Tilman Williams opposed the increase.

The business license increase comes a month after the council approved numerous other increases, including higher water rates and hotel and street-lighting taxes.