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Tuesday, 27 June 2006 16:15 |
By DAVID FORBES
Differing proposals for raising the business privilege fee in Asheville??s 2006-07 budget spurred debate at the June 20 work session of Asheville City Council, with council members taking differing stances on how to raise more money for the city??s coffers ?? without harming Asheville??s business climate.
In the proposed budget, city staff suggested that Asheville raise its business privilege license fee ?? increasing the minimum fee while also eliminating a cap on the maximum fee. Under the proposal, which would raise roughly $550,000 in revenue annually, small businesses would see their rates stay the same or increase by a small amount, while the city??s largest businesses would see increases of up to $5,000.
Another
proposal, presented at the meeting by Councilman Brownie Newman, comes
from council??s revenue and finance committee. That proposal would
reduce the fee for manufacturers and small businesses, but retain it
for the city??s largest businesses. It would result in about $300,000 in
revenue.
?®We think we should bump up our privilege licenses, but we do want to
do something different to keep costs low for small and medium-sized
businesses,?∆ Newman said. ?®We??d like to recommend lowering the
percentage that those businesses have to pay. But it would generate
less than the staff??s recommendations.?∆
However, Newman added, because of new figures showing that Asheville??s
share of revenue from the state sales tax is higher than expected, the
city can afford such a change.
In addition, the proposal would reduce the license fee for manufacturing businesses in the city.
?®We??d like to do this because we recognize the hard times that
manufacturers are going through and the challenges that they??re
facing,?∆ he said. ?®Under this proposal, 95 percent of the businesses
will see their rates go down, stay the same or minimally increase.?∆
Those businesses that will see a major rise in fees under either
proposal include stores such as the Wal-Mart Supercenter, Best Buy, and
Bi-Lo ?? mostly large retailers.
However, Councilman Carl Mumpower, the only member of the revenue
committee to dissent from the proposal, asserted that the plan will
harm the business climate in Asheville more than its proponents believe.
?®This kind of policy will send a message to other businesses ??
potential businesses,?∆ Mumpower said. ?®Businesses bring in money to the
city through methods like the sales tax. In fact, we??ve seen an
unexpected windfall from that tonight. That??s where the rubber meets
the road. This is a backdoor tax ?? a safe tax on people who can??t vote.
I??m not comfortable with that.?∆
While acknowledging that the current business privilege fee is low, Mumpower noted that that can be a selling point.
?®I like being able to say that about Asheville,?∆ he said. ?®I like that
a business can come in here and say ?¥Look, their business tax is low.??
That shows they support business ?? and that creates jobs.?∆
Meanwhile, Mayor Terry Bellamy suggested that when council makes a
final decision on the privilege tax, which was expected to happen this
past Tuesday, it does so separate from the rest of the budget.
?®There??s some things I just don??t agree with in this proposal and
that??s why I??d like consider it separately, so it doesn??t impede
adoption of the rest of the budget,?∆ Bellamy said. ?®I think we do need
to raise the minimum fee ?? it??s unusually low. Also, I don??t support
that we??ve taken out a maximum fee cap. I do think we need to have a
limit to the fee.?∆
In reply, Newman noted that ?®this will only have an affect on the very
largest businesses ?? and that??s a very small amount for them. I guess
my response is that the large retail businesses aren??t exactly going to
break the bank on this. They??re doing really well in Asheville.?∆
Speaking in agreement, Vice Mayor Holly Jones also asserted that the committee??s proposal will help Asheville??s manufacturers.
?®The strongest appeal we heard on this fee was from the manufacturer??s
association,?∆ Jones said. ?®For most of the businesses here, it??s
actually an improvement. The businesses we did hear from loud and clear
have been addressed. We??re very publicly rolling up our sleeves and
trying to help those businesses.?∆
Conversely, Councilman Jan Davis said he believed that more businesses
would be affected by the proposal than council might think.
?®I don??t know about the figures here ?? I think you??re assuming the
businesses are smaller than they seem,?∆ Davis said. ?®This is probably
just a bad year to do it anyway. A lot of small businesses are larger
than you think.?∆
Newman responded that his information was based on staff??s own figures.
In separate remarks, Councilman Bryan Freeborn said that he would have
shared Davis?? concerns, but that seeing information about how few
businesses would be affected had changed his mind.
?®Only a very, very small amount of businesses will be affected by this,?∆ Freeborn said.
Councilwoman Robin Cape, also speaking in favor of the committee??s
proposal, criticized Mumpower and Davis?? assertions that it will harm
business.
?®When we look at what we??re asking for, it really becomes realistic,?∆
Cape said. ?®We??re looking at a lot of different ways to serve the
community. We??re asking for half a millon dollars. I think it??s pretty
fair to bring that up.?∆
Disagreeing with Bellamy, Newman asserted that by setting a maximum
cap, council would ?®shift more of the burden to smaller businesses.?∆
However, Bellamy still maintained that ?®we need to set a maximum cap,
we need to have some kind of limit there for this system to be fair ??
and that??s why we need to pull this issue out.?∆
Newman then asked if council would be willing to vote on the issue separately that day.
?®I want to vote on this with the budget,?∆ Bellamy retorted. ?®We need to
consider this with the budget and we need to have public comment on
this.?∆
Jones then said, ?®I hope we can reach some middle ground on this. For
the vast majority of businesses, this is good ?? period. The two things
I hear from businesses are to lower taxes and speed up development.
We??re doing both those things. It really does a disservice to the
hard-working people to make something that actually serves a lot of
businesses very well look like it??s bad for business.?∆
Mumpower later remarked that ?®this is a tax increase ?? and now, with
what we know about the sales tax money, it??s an unnecessary one. We
don??t need this increase. Think about how much sales tax revenue a
Super Wal-Mart brings in. We need that in this city.?∆
Newman reiterated his assertion that ?®95 percent of businesses will not be affected,?∆ before being cut off by Bellamy.
?®I am tired of council calling each other out ?? we??re almost to the end
of the budget process,?∆ Bellamy said. ?®We need to move forward with one
voice and tackle the issues that the city of Asheville needs to see
dealt with.?∆
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