Opinion: Measure E will hurt South Lake Tahoe
To the community,
Measure E has quietly sat at the end of the city ballots. I think it needs more attention.
When I was the South Lake Tahoe Chamber exec, the issue of fairness in the business license fees would come up from time to time. The reason is that there is an existing cap on how much the city can assess a high grossing business. In that sense a smaller business here pays a larger proportional fee on their gross sales than a large grossing business. As we looked at creating fairness the way the system is set up would end up really hurting mid-size businesses in the long run. Also, going from the current roughly $3,700 cap to $10,000 proposed would have been very hard on high grossing but low net businesses like hardware stores and gas stations and car dealers. Most people would still like to have larger grossing businesses pay more.
But measure E has a Trojan Horse hidden in the language. The initial 10 percent reduction in fees for smaller businesses looks good until the fine print is read. There is a 3 percent increase built in from there forward that is also compounded. So in three years small businesses would be right back where they are now and from there on in perpetuity they would see 3 percent increases automatically.
In 10 years, small businesses would have a possible 30 percent increase or more. The 50 large businesses would collectively pay about $100,000 more to the city to administer their business license. In my opinion, that would result in either $100,000 worth of more jobs lost or $100,000 in increased prices to the customers.
I found it odd that some of the candidates for City Council touted lower taxes and encouraged business to create jobs, but weren’t opposed to Measure E. One former councilman, did say he was very much against it. I think most didn’t see the hidden job killer inside the measure.
In any case, this is not the right time to raise taxes on any businesses for any reason.
Duane Wallace, South Lake Tahoe
I have to concur and support Duane’s view of Measure E! This is an attempt by the City of South Lake Tahoe to encumber struggling businesses in South Lake Tahoe with an increased TAX disguised as a fee reduction.
A majority of local businessese are owned by individuals who do not live in the City and thus would be taxed without the ability to vote on it.
Further, the cost of this increased fee would be passed along to all residents and tourists alike adding to the the burden they already bear.
Measure E is just another smoke-and-mirrors tax grab that will result in more unnecessary taxes collected by government. Taxes are high enough already. In fact, too high. Say No to the politicians and bureaucrats continual hunger for more tax dollars. Vote NO on this Measure E.
I love my husband and really hate to correct him in such a public forum but….the math of Measure E is even worse than he stated. Because most of the larger businesses have a net profit of only about 1%, the amount of money they would have to raise in order to pay this fee of $10,000 each year, probably by passing the cost on to their customers (US!), is do “x” amount more in sales or to raise their prices to the tune of an additional $1,000,000 per year gross! This would have to happen for all the 50 businesses that Measure E is targeting. Even if a business had a 10% net profit, they would have to bring in $10 in sales in order to pay $1 in taxes, but no one I know is making $10 in profit. This says nothing to what the smaller businesses will have to pay on their increases due to the 3% is compounded annually.
Thanks to City Council Candidate Tom Davis for reading the fine print and pointing this out.
Most Governmental Agencies when they have a budget shortfall simply raise their fees or rates, not understanding that the businesses and individuals who pay those fees have to come up with the money somewhere. So when families start leaving town and businesses start closing, the agency just raises their rates again to make up the short fall, never once considering that they should tighten their belts like the rest of the community. I’m sure that I will get blasted because they will say they are tightening their belts. However, private enterprise does it everyday, quietly and painfully and usually without fanfare. What is clearly misunderstood is that tax cuts are good for business and economic development. They create jobs for both private enterprise and government. Government may lose fees in one area but would receive HUGE increases in others. Do the math!!!!
Measure E is a conniving way for the City to keep feeding its bloated bureaucracy! Period!
What they need to do is first take back the 30%!! raises the top managers got a few years ago! (People who were already making 100K plus benefits, thus got 30K raises!!) Second, stop hiring all these out of town consultants! Third….
Business License fees should be a flat fee based on the size of your business or at the very least based on you net sales, not your gross. Fees should be lowered for good, not increasing 3% every year especially when most business are down. I’m voting NO on Measure E!
Thanks for bringing this measure up for discussion.
Duane Com-on man,$1,000,000 here and there !!!!!!!
You ,Tommy and the rest of the machine know who approved the $1,000,000 City Loan to Redevelopment. That Loan by today’s $$$$$ OMG, better ask former City Treasure Upton to do the MATH.
I’m glad this measure has been highlighted by those above and the small businesses that pointed out the flaw in the Measure.
If I could vote I would vote not to support it. I own a business in town and am appalled at how high the business fee is for the same services the county provides at a fraction of the cost.
My business fee in the county is $35 and my fee or TAX is over $1000 in the city, for what?? This is not a fee it is another tax with very little relevance to services provided. I thought the current cap was insane and ridiculous and now they want to raise it to $10,000. What a great way to force those businesses out of the area and make our prices HIGHER.
I wrote an article in the Tribune last month regarding how the highest business fees in the nation contribute to higher overall prices in the area and now they want to raise them even more.
I’m embarrassed for our city leaders and managers to even propose such a thing and would love to have a sit down business conference with them to understand why they are so clueless when it comes to our local economy.
And why is David Jinkins still offering advice in print? Isn’t he responsible for most of the mess we are in to begin with? His last column in the Mtn News was misinformed and his concepts for our community are out of touch with reality, major retail, please, only if you want to force the other 60% of residents to move away and promote even lower wage job opportunities for those who stay.