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Los Angeles County, CA March 8, 2005 Election
Measure RedondoBeach---H
Business License Tax Adjustments
City of Redondo Beach

1,408 / 46.4% Yes votes ...... 1627 / 53.6% No votes

See Also: Index of all Measures
Information shown below: Impartial Analysis | Arguments |

Shall an Ordinance amending the Redondo Beach Municipal Code Section 6-1.22 regarding Business License Tax rates, last modified in 1991, authorizing the establishment of an annual CPI adjustment to begin July, 2005, be adopted?

Impartial Analysis from Jerry Goddard, City Attorney
The City of Redondo Beach's ordinance currently authorizes the City to impose an annual license tax on businesses which provide goods and services in the City of Redondo Beach, in varying rates depending on the classification of the business. The business license tax rates were last adjusted in 1991.

Proposition H. if adopted, would amend the City’s ordinance to authorize the City to establish an annual Consumer Price Index (CPI) adjustment to the rates of the business license tax, beginning in July 2005.

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Arguments For Measure RedondoBeach---H Arguments Against Measure RedondoBeach---H
The price of everything keeps changing – food, gasoline, utilities. The government measures the annual change in our cost of living with the Consumer Price Index (CPI).

Despite the City staff’s best efforts, costs for our City have been increasing; materials, maintenance, salaries all keep escalating. One thing, however, has not increased in Redondo Beach since 1991 -- the fee for operating a business.

The business license fee in Redondo Beach is among the lowest not only in the South Bay, but also throughout Los Angeles County. Since the fee was last changed the CPI has increased more than 40%. The cost for City services provided to businesses and to the public continues to rise. The City pays more for Police, Fire, roads, parks, senior services and transit. The business license fee has not kept pace with the cost for providing the services from which businesses benefit. The Chamber of Commerce surveyed its members and more than 55% agreed that a modest business license fee increase was justified. In fact, the chair of the Chamber Board has signed below in support of Measure H. It is proposed that the business license fee should be indexed for inflation by annually adjusting at the same rate as costs change. This can be accomplished by multiplying the fee by the CPI. This modest change will ensure that businesses pay a fair share of the costs for the services they use within the City.

Maintain a balanced approach to revenues in Redondo Beach.

Vote Yes on Measure H.

/s/
Don Szerlip
Redondo Beach City Councilman, District 3

Don Szerlip

Ann M. Garten

John Parsons

Rebuttal to Arguments For
The proponents of Measure H correctly state in their ballot argument that: "The business license fee has not kept pace with the cost for providing the services from which our businesses benefit." It is true that the costs of operating our City have increased significantly since 1991, the last time the City raised the business license tax. Unfortunately, Measure H will do virtually nothing to solve the problem the proponents have identified. The City's outmoded business license tax system is unfair to residents, who shoulder a greater tax burden for providing City services, and fails to provide tax relief for small businesses. We need to have real business license tax reform – not a knee-jerk tax increase tha t probably won't raise enough revenue to pay for itself. Voters should reject Measure H because it does not do the job the proponents want it to do. Let's send city officials back to devise a business license tax reform package that the voters can approve on a future ballot. Vote “NO” on Measure H. It doesn't get the job done.

/s/Kurt Schmalz, Councilman, District 4

The City of Redondo Beach needs business license tax reform, not an endless series of automatic annual tax increases based on the Consumer Price Index ("CPI"). The City's business license tax system is outmoded and unnecessarily complicated. We need to reform the business license tax so that it (1) generates sufficient revenue to pay for municipal services and improvements; and (2) is fair to all businesses. Measure H accomplishes neither of these goals. All it does is keep the same flawed system in place with automatic tax increases each year based on the CPI. Our residents and businesses deserve better than this. Let’s reform our business license tax so that it: (1) generates reasonable revenue to the City; (2) eliminates loopholes and complicated classification systems; and (3) offers tax relief to small businesses. The voters should reject Measure H so that city staff and the Budget & Finance Commission can put together a business license tax reform package for review by the city council and, ultimately, approval by the voters within the next two years. Measure H is a prime example of a knee-jerk tax increase that does not address the needs of our City, its residents or the business community. Vote “NO” on Measure H. We can do much better.

/s/Kurt Schmalz
Redondo Beach City Councilman, District 4

Rebuttal to Arguments Against
Measure H is a reasonable and prudent way for the business license fee to adjust to meet the City’s costs for providing services. Since no change has been made to the fixed rates since 1991, it is hardly a knee jerk reaction.

An overwhelming number of businesses in Redondo Beach pay a simple license fee based upon $99/year plus $18/employee. This fee is not a major burden on small businesses.

There are a group of miscellaneous business classifications in the code that pay varying fees.

Prior to putting this measure on the ballot, the City Council directed staff to revamp these categorizations in order to simplify the system. The results: 57 designations were reduced to only 9. This action made the City’s code more fair and eliminated loopholes and complicated classifications.

There is no immediate need to completely overhaul Redondo Beach’s business license fee.

Redondo Beach remains among the lowest cost municipalities in Southern California within which to operate a business. Should the City Council, City staff or the Budget and Finance Commission wish to propose a new system, they can at any time. For now, adding an annual CPI adjustment to the fee schedule will serve to ensure that businesses meet the changing costs for the services provided to them by the City.

The Chamber of Commerce, representing its local business membership, supports Measure H.

So should you.

Vote YES on Measure H.

/s/
Donald Szerlip

John Parsons

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Created: March 29, 2005 12:43 PST
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