Artesia voters will have a chance to ponder an increase in the city’s business tax for businesses making over $150,000 in gross receipts this November.
The City Council voted 4-0 in a special meeting June 23 to place the measure on the ballot, which City Manager Maria Dadian said would help the city fund essential services such as public safety, public works and parks and recreation. The unanimous declaration of a last month by the Council due to dwindling revenue and the end of redevelopment agencies made it likely for the city to find ways to shore up its budget.
“The City staff has been evaluating ways in enhancing revenue and increase local control over the city’s funding,” she wrote in a statement read by City Attorney Kevin Ennis. “The business license ordinance was identified as an existing locally controlled revenue source that has not been updated for more than 20 years.”
The statement also read that no increase for small businesses is in the works, but that larger businesses “pay their fair share.” Businesses affected by the tax increase could see their license fees go as high as 65 percent.
Before considering the placement of the business tax increase on the ballot, the City set up an ad hoc committee and consulted with residents and businesses.
The proposed concerned businessmen like Manu Patel because of potential auditing by the city to ensure that these businesses “pay their fair share.”
“Every time you audit, people are scared like if the Internal Revenue Service orders an audit,” he told the Council before the vote.
Mayor Pro Tem Sally Flowers assured Patel that it wouldn’t change its auditing policies and it is not targeting the tax increase on small businesses.
“We’re not touching the small businesses to the detriment of the City,” she told Patel. “In other words, we’re losing out on any business that makes less than $150,000. That’s a huge chunk of money and we’re trying to protect the small businesses so they can flourish and hopefully become one of the bigger businesses.”
If enacted by Artesia voters, this tax revenue cannot be seized by the State.