Irvine eliminates business license fee
A proposal to eliminate the $51 business license fee to “make it easier for the middle class in our city” passed by a 3-1 vote by Irvine City Council Tuesday night.
Businesses operating in Irvine are still required to register with the city but will no longer have to pay the nominal $50 fee and $1 state tax previously collected with each application. The decision takes effect immediately.
Supporters say it’s a gesture that offers relief to small business owners while opponents argue it creates a nearly $1 million annual dent in the city’s general fund and will compromise the database used by the Department of Public Safety.
According to city statistics, the business license program brought in $971,000 in revenue in the last fiscal year and approximately $600,000 is used to administer the database that allows public safety operations to monitor information that can be vital to police and other emergency workers.
“We’re taxed to death,” said Councilwoman Christina Shea in support of the motion. “We’re just doing a little bit, in the city of Irvine, to give you your money back. It’s to encourage you and let you know we’re not trying to nickel and dime you to death.”
“Our government spends too much money,” Mayor Pro Tem Jeffrey Lalloway echoed from the dais. “We need to be leaner and meaner.”
Lalloway first proposed cutting the license fee in March, but got little support – his motion at that time did not get a second. Questions about the business registry were raised and further discussion last month directed city staff to examine the issue.
Shea was swayed by a report from Deputy Director of Business and Technology Michael Sherwood and Dan Young, special assistant to the chief of police, that suggested the Department of Public Safety can create more efficiency in database operations, such as a campaign to have business owners register their information online.
Mayor Steven Choi opposed the measure, arguing that the loss of revenue could ultimately place a burden on taxpayers. “I am opposing to protect our general fund,” he said.
“Symbolically and politically it may be the popular thing to do,” Choi continued. “Deeper than that, it’s unfair for the rest of the people to have to subsidize people who are here to do business.”
“No business conducting business in Irvine will be deterred by a $51 business license tax that we charge,” the mayor added.
The measure passed with the 3-1 vote with Choi opposed and Councilwoman Beth Krom absent.
“We’re trying to make it easier for the middle class in our city,” summed up Lalloway. “We’re trying to give them some kind of relief from the massive taxation.”