By Sarah de Crescenzo
IRVINE – In a move proponents said may attract more businesses to Irvine and will bolster the city’s conservative credentials, companies no longer will have to pay for business licenses.
The City Council on Tuesday voted to cut the $51 annual business license fee, but it could cost the city nearly $1 million in revenue.
“We are taxed out,” said Mayor Pro Tem Jeff Lalloway, who was joined in the vote by council members Christina Shea and Lynn Schott. “This is a very important statement that we’re making.”
Lalloway said the decision will show that city government is watching out for businesses and residents when it comes to fees – even when the amount would only cover the cost of dinner for two. Lalloway began pushing to do away with the license fee earlier this year.
Irvine, one of the county’s key business hubs, was for years led by a Democratic-majority council. Today, Republican officials control the city.
While local businesses can add $51 to the bottom of the annual ledger, the fee’s elimination means the city’s operating budget will likely take a nearly $1million hit. In the 2013-14 fiscal year, Irvine took in more than $970,000 through the license program. Out of the $51 fee, $50 goes to the city and $1 to the state.
Operating the program that year cost about $600,000. Schott said Irvine needs to keep issuing licenses because the program collects data about local businesses. Lalloway originally proposed cutting it altogether because of privacy concerns.