Solana Beach residents on Tuesday will have the opportunity to vote on whether or not a tax on businesses operating within the city should be imposed.
The tax is for all businesses, including home-based businesses and property owners who rent out their 5-or-more unit buildings, and after this year, would be due on July 1. The first payment for 2010 wouldn't be due until Oct. 15 and the tax would be 50 percent less than the usual rate.
The tax model gives businesses the option of paying a flat rate or a multiplier rate based on gross receipts.
The flat rate ranges from $25 to $1,675 annually, depending on the business's revenue. The multiplier model is offered to businesses making $66,500 or more annually (see chart).
Residential property owners would pay a flat rate of $25 a year per rental unit and all home-based businesses would pay the $75 flat rate.
Just as the city of Solana Beach has been severely impacted by the economic slowdown, so have local businesses. But since they already pay a business license tax and that will be replaced by the new structure, we believe that what the city is asking is more than fair. We also applaud city officials' efforts to get local businesses on board by working closely with local business leaders, many of whom endorse the proposed model.
In 2009, the city balanced the budget with some impressive acrobatics, cutting expenditures and finding new sources in revenue. Just last week, the City Council agreed to a 1-year salary freeze for 65 percent of city employees, increased employee pension contributions and reduced retirement benefits for those hired after July 1.
If this business tax is implemented, the city estimates it will bring in $250,000 in the first year (at 50 percent of the usual rate) and more than $500,000 at the usual rate.
City revenue is currently down about 14 percent, or by $1.2 million. When the economy stabilizes, the council has the option to reduce or suspend the business tax.
In the meantime, those doing business in the community are as much a part of the city as its residents. They often require the same services and their contribution to the city's maintenance is needed. We think the city is absolutely within its rights to ask that businesses pitch in a bit.
Solana Beach is a great place to live and work. Let's help our city keep it that way.
Vote yes on Prop. L.