Business License Tax Arguments Set for Ballot

Hermosa Beach voters will be able to cast ballots for a revamped business license tax structure in the city's upcoming Nov. 8 municipal election.

While city officials are urging residents to vote for the ballot initiative proposed by the city's and against a measure proposed by resident Jim Lissner—.

Here is a roundup of the two competing measures and arguments.

Measure Q

This ballot item is the business license tax measure proposed by Lissner, which he later has spoken out against, arguing that it's flawed.

In his ballot argument, he wrote:

Please vote NO on this measure.

I wrote this measure, and along with community-minded volunteers spent many hours gathering signatures to qualify it for the ballot.

I wrote this measure because City Hall was cutting back on services essential to the community, while at the same time it was ignoring a big subsidy enjoyed by the restaurants and bars in town. For many years, City Hall denied the existence of any subsidy.

Then, several weeks after I filed this measure, the City made its first and only official acknowledgment of the subsidy; a report prepared for the February 28, 2011 meeting of the City’s Business License Tax Review Committee noted a subsidy of $1.6 million. That report is available on the City’s website.

I put a lot of thought into this measure, but not enough. Intense public scrutiny has pointed out a number of flaws. Enough flaws to where I cannot, in good conscience, recommend a "yes" vote on it, despite the fact that the subsidy will continue.

Measure N

This ballot item is the business license tax measure proposed by the Hermosa Beach Business License Tax Review Committee.

In the ballot argument, the Hermosa Beach City Council wrote:

This proposal represents a joint-effort between the City Council and a committee of residents and Hermosa Beach business owners, and accomplishes three very important goals that will help improve our City.

First, this proposal simplifies and updates the current business license tax structure; something that has not been done for almost 30-years. Currently, many businesses are under-represented while others pay more than their fair share. Other businesses, like internet-related companies, are not adequately covered at all. This proposal allocates tax responsibility among all businesses, and businesses requiring more city services will pay more to defray those costs. The City’s proposal also consolidates the number of categories into a chart that fits on a single page.

Second, the City’s proposal is pro-business. Almost 95% of Hermosa businesses employ less than 12 people, and the City’s proposal will help these businesses prosper by lowering the tax on almost all of them. Under the City’ proposal home-based businesses will pay a flat fee of only $99 for a business license, and the lion’s share of Hermosa’s other businesses would only pay $175.

The City’s proposal is competitive with neighboring cities, and in these difficult times, shows Hermosa is a place where businesses are encouraged to come and open shop. This proposal also provides an incentive by waiving license fees for most new businesses for one year.

Third, the City’s proposal raises revenue. By closing loopholes, clarifying categories, allocating responsibility, and encouraging universal participation, the City’s proposal will raise revenue – this proposal will increase City revenue by approximately $200,000 each year.

This proposal has been unanimously endorsed by the City Council and we respectfully submit that it is worthy of your vote.

Related: 

Earlier Patch coverage of the business license tax measures: