EDITORIAL: City should phase in new fees

 IBJ Staff
January 2, 2010
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IBJ Editorial

Mayor Greg Ballard is on the right track with his plan to ask the City-Council to raise fees on businesses in order to improve code enforcement. Over the years, the lack of enforcement has likely resulted in higher costs for police and fire runs and environmental cleanups, to name just a few public services.

But the push-back he’s receiving from the business community is understandable. The mayor needs to listen, and it seems he is.

For weeks now, the administration has been speaking with business groups and other stakeholders about the proposal, and originally intended to introduce the plan to the City-County Council this month. Now, because of opposition, the administration is looking to later in the quarter.

All 27 business classifications would see fees rise, and many of the proposed increases are steep. Taxicabs would go from $100 to $471 per vehicle. Transient merchants would see fees rise from $20 to $213. Trash haulers, $20 to $479. Pay parking garages, $20 to $475. Some of the fees haven’t been increased since the 1970s.

Even though the fees should have been updated years ago, it’s hard to fault business owners for complaining. The proposed increases came with little warning, and the increased costs couldn’t come at a worse time. Many of the businesses that survived the recession are barely hanging on.

If the fees are implemented under the current proposal, they would raise an anticipated $3 million. That’s what actuarial firm Milliman calculated the fledgling Department of Code Enforcement needs to issue permits and licenses and enforce codes.

Currently, code enforcement generates virtually no revenue. And lax oversight costs taxpayers through criminal prosecutions and civil court complaints when bad operators who might otherwise have been denied a license cause trouble.

Ballard’s approach is consistent with his legitimate, overarching philosophy of bringing fees into line with actual costs of regulation.

However, considering the size of the increases and the timing, this isn’t the time to push through the entire proposal. Ballard should phase the higher fees in over two or three years. That should be plenty of time for businesses to prepare for and digest the higher costs.

In the long run, viable businesses will be able to absorb such increases, even if it requires charging consumers a little more.

The city has no choice but to raise money any way it can. Property tax revenue has been diminished by state property tax caps and will erode further this year as the caps are fully phased in.

Local governments, which in many instances are prevented by the state from streamlining to lower expenses, have little choice but to beat the bushes for new sources of cash.•


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