After months of debate, a proposal to raise business license fees is ready for City Council consideration.
City administrators have developed a plan to increase the city’s base license fee from $60 to $110 a year.
The plan is aimed at raising $1 million in extra revenue to help cover next year’s expected $7 million shortfall. The rest of the gap in Mayor Mary Verner’s proposed budget would be made up through union concessions and early retirements and by using the city’s rainy-day fund.
The measure is scaled back from an earlier plan that also would have raised fees for each employee of a business. On top of the base fee, the city charges $10 per employee to businesses with five workers or fewer, $15 per employee to businesses with six to 10 workers and $20 per employee to businesses with more than 10. Those rates won’t change under the latest plan.
However, other fees would increase. For instance, businesses currently pay an extra $10 for each of their locations. That would go up to $110. Other prices, such as the cost to transfer a business to a new owner, also will shift.
Rich Hadley, president and CEO of Greater Spokane Inc., said the business group, which serves as the region’s chamber of commerce, was briefed on the proposal by City Council President Joe Shogan. Greater Spokane Inc. is in the process of determining if it will take a position, he said.
The city most recently increased base license rates in 1998. Rates for each employee last rose in 1988.
Spokane raises about $2.5 million a year from business licenses.
Councilman Richard Rush said feedback he’s heard is that opposition to the concept has lightened since officials decided not to consider increasing the per-employee fee. Rush said he leans in favor of the changes and noted that rates haven’t been adjusted in more than a decade.
“It seems like an elegant and equitable way to address that issue in light of the fact that we do not have a business-and-occupation tax,” Rush said. Although Washington state imposes a B&O tax on business revenues, there’s no such local tax.