Irvine will keep license fee

The Irvine City Council wavered on a proposal to eliminate the city business license ordinance and associated $51 annual tax every business in the city is supposed to pay.

Mayor Pro Tem Jeffrey Lalloway enthusiastically brought the item forward on Tuesday’s regular meeting agenda.

Reading from the memo attached to his proposal, Lalloway argued the nominal tax, which applies to home businesses and small mom-and-pop ‘operations exactly the same as major corporations, is inefficient.

Revenue from the license tax was a little over $970,000 in the last fiscal year with a cost of just under $605,000 to run the program.

“When looking at it objectively, the costs significantly outweigh the benefits,” stated Lalloway. “It really does not make sense to maintain this.”

He further expressed his belief that “hundreds, if not thousands” of businesses in the city are operating without a license, and suggested eliminating the ordinance would send a powerful message promoting Irvine as a friendlier place to do business.

To underscore his confidence, Lalloway offered letters of support from the president of the Irvine Chamber of Commerce along with Orange County supervisors Michelle Steel and Todd Spitzer, each in attendance at the meeting.

But that’s about all the support Lalloway would get.

Councilwoman Beth Krom led off discussion with a blistering and increasingly loud denouncement by first attacking the proposal as “political grandstanding,” calling it “a solution in search of a problem.”

Krom argued that no business operators seem to be complaining about the $51 fee and, more importantly, the license program provides an integral registry that can be critical to fire and police officials in times of emergency.

Krom further scoffed at the involvement of the supporting outside organizations by using comparison statistics on similar tax assessments and other fee structures that benefit both the Chamber of Commerce and the Orange County government.

“There are plenty of places they can go, without coming in and telling us how to do our business,” Krom said.

Councilwoman Christina Shea raised questions about the business database, exploring with City Manager Sean Joyce how critical the information is to city services and if there are ways to compel companies to supply data outside the license program.

Noting the relatively small tax still provides a surplus, Mayor Steven Choi suggested a compromise proposal to reduce the licensing fee from $51 to $41. None of the council members concurred on either plan before settling to table the discussion for 60 days.

The amended motion to revisit the issue passed by a 3-1 margin with Lalloway dissenting. Councilwoman Lynn Schott was absent.

Lalloway silently left the dais after the vote, 15 minutes before the end of the session.

Reached for comment afterward, Lalloway said he had to excuse himself in order to pick up his daughter from an activity. He also echoed his disappointment that the Orange County supervisors and Chamber of Commerce were harshly targeted for supporting the proposal.

“I’m just sad,” Lalloway said, “that in an already overtaxed society, we can’t even get rid of a meaningless tax that would return a million dollars to the people of Irvine.”