SADDLEBACK/SOUTH BEACH : LAGUNA BEACH : Proposed Tax Riles Business Owners
The business community is urging the City Council to reject a possible 10% hike in the city’s annual business license taxes.
Business owners, attending a council meeting Tuesday, said local commerce is already slogging through tough times and shouldn’t have to endure higher taxes, despite the city’s budget woes.
“To raise those taxes at this time sends the wrong message,” real estate agent Bobbi Cox said.
While Tuesday’s hearing was intended to gather public comment, and an ordinance adopting an increase will not be proposed until Nov. 2, business leaders were quick to register their votes. Even neighborhood association representatives spoke in support of local businesses.
North Laguna Community Assn. President Cheryl Kinsman said that group’s board has already voted to oppose such a tax. “These are tough times,” she said, “and we need our local businesses.”
The city is considering a higher tax, among other things, to raise money because the state will be taking a larger share of property tax revenue from local governments.
Last November, the council increased the maximum business license tax from $440 to $1,500, a move that is expected to generate about $12,000 more each year.
If the city raises the business license tax by 10% as of Jan. 1, it could raise another $50,000 this fiscal year, according to a report by Deputy City Manager Rob Clark.
The city staff offered two possible alternatives to the council for discussion.
One would raise all rates by 10% while the other would establish differing tax ratios for different types of businesses, thus shifting the tax burden from smaller, less profitable companies to those with higher gross receipts.
Two consultants who have examined the proposals for the city have recommended the latter because they considered it fairer, Clark said. However, Clark said he will meet with interested groups in the city before recommending either option.
But most in the audience Tuesday were clearly opposed to any tax increase. Robert R. Mosier, president of the Laguna Beach Taxpayers Assn. Inc., called the proposal an attempt to “shift and shaft” local merchants.
“Why doesn’t City Hall take a strong pro-business posture recognizing that good business will help return the city to financial health?” Mosier said.
Councilman Wayne L. Peterson said he is not comfortable with any “overall tax increase” while colleague Ann Christoph said she favored the proportional tax increase endorsed by the consultants.
Mayor Lida Lenney said she is “keeping an open mind,” but added that, until the maximum business tax license was raised last year, the city’s tax hadn’t changed since 1980.
“In terms of the life of a city and how things do change,” she said, “it’s probably time.”
