Council to debate business fees in upcoming budget

Published on Thu, Mar 27, 2008 by Tara Nelson

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Council to debate business fees in upcoming budget

By Tara Nelson

After realizing that the city of Blaine’s business license fees are the highest in Whatcom County, at least two Blaine City Council members said they are willing to get rid of them completely.

In a regular meeting of Blaine City Council Monday, councilmembers Jason Overstreet and Scott Dodd said they would like to rescind the annual $75 license fee in an attempt to attract more business and stimulate Blaine's economy by lowering the entry costs typically associated with starting a business.

“It’s one way we can say we are hungry for business,” Overstreet said, adding that the city of Sumas, a small city on the U.S./Canadian border, charges no money for their business licenses. “We want to paint the picture we’re open for business, but Blaine needs to be painting a mural.”

Overstreet, who owns Red, White and Brew espresso stand and also Scrubby’s Car Wash on Martin Street, said the city of Lynden charges $10 for business licenses and the city of Everson charges $30. The city of Bellingham charges approximately $60.

Councilmember John Liebert, a former economics teacher at Blaine high school, however, disagreed. Liebert said while the city of Sumas abolished their business license fee several years ago, the city still struggles economically.

“I agree that business in Blaine is something we need to be very cognizant of and not just in March or April,” he said. “But when I go to Sumas, they are still struggling and their $0-cost license hasn’t brought an overwhelming influx of business there.”

He also said a no-cost license would create little incentive for city officials to enforce registration for the approximately 900 businesses here. Steep fees have also been historically used to marginalize the adult entertainment businesses of Blaine’s more indulgent period.

Councilmember Harry Robsinson agreed. “If you collect no money, who is going to enforce the rules and regulations we have in Blaine because we have no money to do anything in terms of administration,” he said. “If you want to make sure it’s the kind of business you want, you got to have some sort of administrative follow-up.”

Blaine city manager Gary Tomsic said the city collects an annual average of $68,000 from license fees. Some of that is used to cover administrative costs of registration but more than half is directly transfered to the city’s general fund, which is used to finance police protection, road maintenance and other general services.

If the council votes to remove the fee, the city will be forced to reduce services in other areas. He added that despite the relatively higher licenses, business license applications have increased regularly each year.

“This provides a 1.4 percent of the general fund, which doesn't seem like a lot, but in our general fund budget $63,000 makes a difference,” he said.

Overstreet argued that he is part of a council that has recently approved several technological upgrades and staff increases and that he would like to see some of the money used for those expenditures be taken back. Part of the cost, he said, could be recouped by eliminating one full-time equivalent city staff person.

“I’ve been part of a council who has added multiple things, sound system, staff – we’re very ready to add things,” he said. “But I don't think we're open minded enough to ask if we can do what we’ve been doing.

“The code reads this cost is to do business in Blaine. But I question whether it is a privilege to do business in Blaine right now.”

Tomsic, however, said there is a misguided public perception that occurs when a city sustains consistent cuts in revenue and the level of service stays the same.

“As a result, people think that you didn’t really need the money to begin with or that you were wasting money but that’s just not the case,” he said. “We can’t keep going each year with a 2 percent budget increase. We run a business too and we have to have the revenue to support the business that we run as well and we’re barely doing it. We’re having the same problems as everyone else.”

Blaine mayor Bonnie Onyon said she liked the idea of reducing the cost of the license but was not willing to reduce it to $0. The council agreed to postpone the discussion until their scheduled budget discussions later this year.