Council rejects raising most business fees|Service providers will see maximum fee rise by $250

Published 9:10 pm Tuesday, May 19, 2009

Contributing Editor

An increase in the maximum fees for most business licenses in Washington probably won’t happen during the next fiscal year, but one category of businesses will see its maximum fee increase by 50 percent.
During its budget session Monday, the Washington City Council said it intends to keep the maximum fee for business licenses for manufacturers, wholesalers and retailers at their existing caps of $1,500. The maximum fee for a service establishment such as a restaurant would increase from its existing $500 cap to $750, a 50 percent increase.
City Manager James C. Smith’s recommended budget for the next fiscal year, which begins July 1, called for increasing the maximum fee in each of the four categories.
Under his proposed budget, a manufacturer would have paid a minimum fee of $50 to a maximum of $1,700 for a license. The current fees are a minimum of $50 and a maximum of $1,500. A retailer or wholesaler would have paid a minimum fee of $50 to a maximum fee of $1,750. The current fees are a $50 minimum and a $1,500 maximum.
Smith’s budget proposal called for a service establishment to pay a minimum fee of $50 to a maximum fee of $1,750. The current fees are a $50 minimum and a $500 maximum. The $1,250 difference between the existing maximum fee and the proposed maximum fee would have been phased in during a three-year period.
Several council members didn’t want to increase the fees during the upcoming fiscal year, having increased them significantly this fiscal year. Another increase during a recession would be the wrong thing to do, they said.
“This year is much tougher than it was last year,” Mayor Pro Tempore Doug Mercer said.
“I just don’t want to increase the maximum again,” Councilman Archie Jennings said.
Some business owners in the city agree with that point of view.
“My take on it is that I don’t see any reason to go up to $1,700 when the $1,500 was thrown at us last year in a dying economy,” Lesha Brooks, with Brooks Boatworks, said earlier this month. She recalled the fees for some licenses increasing by 500 percent from $500 to $2,500 on July 1 last year.
“Keep it at $1,500 for a couple of years to allow us to get used to it,” Brooks suggested then.
The maximum fees were increased for this fiscal year, in part, because they had not been modified in many years.
Last summer, the council increased the maximum fee for a retailer, wholesaler and manufacturer — service establishments were left alone — from $500 to $2,500. The increase resulted in an outcry from some businesses that saw their fees jump from $500 to $2,500 or somewhere between. After that outcry, the council set the maximum fee at $1,500.
“We waited too long to increase the maximum end,” Jennings said.
The council did keep intact the part of Smith’s proposal that calls for a manufacturer, retail merchant, wholesale merchant or service establishment above the $25,000 minimum threshold in annual gross receipts to pay 80 cents per $1,000 of its annual gross receipts instead of the current 75-cent rate for a license, but pay no more than the maximum for its category.
The council continues to work on the 2009-2010 budget. Its next budget session is at 4:30 p.m., May 26, in the Council Chambers of the Municipal Building, 102 E. Second St.