GARDEN GROVE : City to Study Tax, Cultural Center Plans

The City Council has commissioned studies of two topics suggested by new council members: creation of an international center and a review of the business operations tax.

Ho Chung, who became the first Asian-American to serve on the Garden Grove City Council, won approval from colleagues last week to form a committee to study the feasibility of establishing an international trade and cultural center on vacant land in the downtown area, near Garden Grove Boulevard and Main Street.

Chung said he envisions a center where about 15 participating nations could display their traditions, products and culture. There also could be a museum, a souvenir store and restaurants in a series of pavilions, he said.

“The council was very supportive, and I am encouraged,” Chung said.

Councilman Bruce A. Broadwater, who criticized inequities in the business tax, pushed through a measure that will study the tax, beginning with a determination of how much it brings into municipal coffers.

In the election last month, Broadwater contended that the tax is a form of income tax against businesses because it is based on gross sales receipts. The maximum tax per year for each business is $3,000, he said.

The tax discriminates against honest businessmen, Broadwater has said. City officials generally rely on statements from the business owners, he said, creating the potential for evasion.

Broadwater said he supports altering the gross sales basis for the tax, which he claimed deters businesses and actually has the effect of depriving the city of significant sales taxes revenue.

According to City Controller Tony Andrade, 83% of businesses in Garden Grove pay less than $100 a year in business operations tax, and 90% pay less than $200. The tax brings in about $1.5 million, or about 3% of the city’s total $45-million budget, he said. Statewide, according to Andrade, local businesses contribute about 6% of the budget in the cities in which they are located.

Broadwater said he has called for an independent audit of the business operations tax.