Repealing Irvine’s Business License Program; More About Show than Dough

Lalloway PuppetMaster

Irvine Mayor Pro Tem Jeff Lalloway finally got his way, sort of, in eliminating Irvine’s $51 business license program.  We say sorta, because while business owners no longer pay this tax, the program is still on the books for Irvine taxpayers and costs about $600,000 to manage.

On social media, Lalloway shared a friendly OC Register article touting his leadership on the issue with this tagline:

We are trying to be one of the first cities to eliminate a tax and return almost $1 million back to our residents.”

Except its not returning $1 million to residents.

Irvine has about 250,000 people — half the city’s population rents and doesn’t pay property tax (but certainly does pay local sales tax and payroll taxes if they work or shop in the city).  So if Lalloway’s claim were completely true, that is a savings of $4 a person.  Except its not.  Published reports say the program costs $600,000 to administer, and when we use the same formula, Lalloway’s move saves business owners $51 a year while costing each Irvine resident $2.40.  Neither the Lalloway-claimed savings-per resident or the program’s cost-per resident will buy you a movie ticket unless its at the dollar theater.

But let’s break down the numbers further.

According to the Records and Business Services Bureau of the Irvine Police Department, which manages the program in order to track the sort of businesses seeking a license in the city, the number of total licenses issued were 22,343 multiplied by $51 is $1,139,493 in annual revenue paid for by local businesses.  If the program costs $600,000, that’s a net “profit” (and I hate to use that term because government should never be in the business of making a profit), is $539,493, which helps pay for all the nice things we have in Irvine.

The business license application requires the business owner to list a home address.  Of those who hold a business license in Irvine who also live in the city, Irvine issued 6,327 business licenses.  That’s a long way from 250,000.  So for those Irvine residents who hold a business license in the city, your $51 tax refund accounts for a total of $322,677 and you can take a business associate to lunch once a year on that tax savings provided you leave a nice tip for that hardworking waiter or waitress that served you (Full disclosure: I hold two business licenses in the City of Irvine and one in the City of Tustin yet I fully support this tax).

Another 5,739 business license holders have no residential address listed (as many use a P.O. Box) that accounts for $292,689 in savings to taxpayers who might live in Irvine or do not living in Irvine.  Let’s assume for a moment, they all live in Irvine.  A total of 12,066 compared with a population of 250,000 is not a tax refund for “our residents.” The actual number is, of course, far less.

Nearly 46 percent of all Irvine business tax licenses (10,277 to be exact) were issued to taxpayers who don’t live in Irvine.  Factor in the P.O. Box licensees and its easily more than half.

Christina Shea

Now Council member Christina Shea has her grandma panties in a bunch over the Living Wage ordinance using taxpayer dollars to compensate workers of companies with city contracts who don’t live in our city, but has no problem with the city refunding tax dollars to 10,277 out of town business owners to the tune of $524,127 at a cost to Irvine taxpayers of $276,000.  She and council member Lynn Schott think its Christian to pay Latino janitors minimum wage instead of the city’s former Living wage of nearly $11 an hour, but out of town business owners, here’s your $51 back and our taxpayers will pick up your check.

LynnSchott

And Shea complained about the unfairness of the Living Wage law that applied only to contracts greater than $100,000. Well, the business tax license was the same for every business in town.  It’s $51 a year for my PR firm.  And it’s $51 a year for Broadcom.  It’s $51 a year for the Irvine Company.  A $51 a year tax is 14 cents a day; just pennies under a dollar a week.  Is that going to break your small business?  Well, maybe Shea’s consulting business or Schott’s home schooling consulting business.

The repeal of this business tax license was done with an eye towards future election mailers.

Jeff Lalloway can say he led a movement to cut taxes in the city.  And for some taxpayers, he did.  Scott and Shea voted along with the program.  They can say they voted to cut this tax program — which was first conceived by Republican Mayor Mike Ward years ago.  But the actual benefit to Irvine taxpayers is chump change.  Most Irvine residents won’t get a dime, while, maybe (if you count the P.O. Box holders as residents) 12,066 will get $51 back.

It’s often said the California Lottery is a tax on people who are bad at math.  This is a tax cut on people who hope you don’t pay attention to the math as much as you might to the words on a mailer come election season.

 

 

  11 comments for “Repealing Irvine’s Business License Program; More About Show than Dough

  1. Ltpar
    June 12, 2015 at 11:33 am

    Democrats just don’t get it on taxes. A dollar here and a dollar there and pretty soon it adds up to those who have to fork over their hard earned money to the government.

    So we have the Irvine City Council in keeping with smaller and less intrusive government identify a tax which is not needed and take steps to eliminate it. I realize getting rid of an existing tax is unheard of in political circles, but it happened here.

    As far as your $600,000 cost, those numbers are way off base. Rolled into that dollar amount are a host of other Police Department services including a supervisor. With what the Council is asking for in maintaining the data files on licenses, the work can be done by a couple of part time employees with the cost being minimal.

    Dan, the moral of this story is “chump change” to you are overhead costs for each and every business in Irvine. If the money is not needed, it should be returned to those who pay it. Sorry but your dog don’t hunt on this one.

  2. Pinky
    June 12, 2015 at 1:51 pm

    Ltpar maybe Irvine taxpayers should pay cops less and suspend pensions

    • Ltpar
      June 12, 2015 at 2:51 pm

      When you move to Irvine dirt bag, then I will be interested in hearing your B/S opinions. Until then, put them where the sun doesn’t shine.

      • June 12, 2015 at 4:07 pm

        touchy for someone who lives life on the public dime.

        • Ltpar
          June 13, 2015 at 2:11 pm

          Dan, I was working graveyard shifts in Irvine long before you happened on the scene. I earned every cent of the “public dime” you referenced. If it hadn’t been for a whole host of people like myself, you wouldn’t be living in America’s Safest City. Moral of the story is, “Freedom is not free.”

          • RHackett
            June 14, 2015 at 7:17 am

            We already had the discussion that you earned every dime while working for an institution that is socialist.

            Someone paid the taxes to support your compensation package. I’m certain many would not pay given the choice.

            • Ltpar
              June 14, 2015 at 8:43 pm

              Mr. Hackett, don’t know where you live but it clearly isn’t in Irvine? People move to this City because of the safe and secure environment and high quality schools. In any market place, you get the quality of product that you pay for and Irvine citizens expect and are more than wiling to pay for the best. As a retired taxpayer living in Irvine, I support our Police Officers being paid for the quality work they do. Frankly, their salaries are not high enough.

              • RHackett
                June 14, 2015 at 9:31 pm

                LtPar, where I live is not the point. The point is that you worked for what is effectively a socialist institution in the way it is funded, organized, and managed. This is not unique to Irvine. This pertains to any locality that provides similar services.

                While you claim you gladly pay the taxes required to fund that department, I doubt the same could be said for every other Irvine resident.

                I’m betting there are those who believe they could get similar service without paying six digit salaries and pensions worth millions.

              • June 15, 2015 at 5:12 am

                Your city council majority would disagree with you on police pay Pat. On your pension too. But as long as one cop is willing to support them, they can publish election mailers saying they have police support even if the union endorsement goes elsewhere

      • June 12, 2015 at 4:08 pm

        Pat, please re-read the story to see a comment from one of the pastors who spoke at the meeting Tuesday; then tell me again how Ms. Shea and Ms. Schott are good Christians

        • Ltpar
          June 13, 2015 at 2:34 pm

          Dan, who am I to judge who is a good Christian and who is not. Frankly, I have my hands full taking care of my own life and I confess to not being the best Christian on the block. For those who point the finger and suggest Christina Shea, Lynn Schott or anyone else is not a good Christian I would merely refer them to Biblical scripture Matthew 7:1-3 which indicates “Judge not, lest ye be judged.”

          On the pastors comments, I assume you are referring to the following:

          “We worked together to appeal to these city officials claims to be upright Christians, a focus of the evening, and they ended up giving faith testimonies just before voting to take money away from the poor. It’s as if they believe that Jesus loves the poor so much that they’re supposed to create more of them to love.”

          My reaction is that while well meaning, the pastors clearly overstepped the boundary between church and state. The Council took nothing away from the poor, except determining local government had no business sticking their nose into an area already regulated by Federal and State Law. I might add, looking at the bigger picture, city government run by those same Council people in my estimation do a very good job in supporting the interests of poor, handicapped and other peope needing assistance in our city.

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