OCEAN CITY – A 2-percent increase in Ocean City’s business license fee has been discussed by the City Council for a few years now and it appears to be a reality now.
According to Finance Administrator Martha Lucey, the purpose of the increase is to cover the administration, oversight and inspection of licensed facilities and those who request to be licensed.
In January of 2009, the council was presented with the proposal to raise business license fees. At that time, the 2-percent increase option was tabled because the council thought the price hike should only be passed if absolutely necessary.
During the 2009 discussion, City Manager Dennis Dare said that the fees are necessary to compensate for fluctuating operational costs.
“We are probably only collecting 80 percent of what we are spending in administration fees. This year, we project that the fees collected will not cover the operating expenses,” said Dare at the time.
In May of 2010, the subject crossed the council’s agenda again and it was approved, resulting in an estimated $36,000 in revenue. The increase will be applied to business licenses this spring if passed through to resolution.
“One of the things that have been bothering me is there is a lot of businesses that do business within our town and utilize our services and our streets and aren’t required at this point in time to have a business license,” Councilman Doug Cymek said.
Cymek proposed city staff and the council begin a review of such businesses that currently aren’t required to pay a license fee.
This observation was also made during May of 2010’s discussion when it was pointed out that beach stand franchises do not pay business license fees.
Lucey’s presentation this week also indicated a number of unnecessary business licenses that she recommended be eliminating, or combined with the other shops, stores, stands or other businesses.
City Solicitor Guy Ayres supported Lucey’s recommendation in that many of the categories of businesses could be consolidated.
“License fees and permits fees are used to cover the costs of the regulatory seams,” Ayres said. “If you start using it as a revenue enhancer, then you run into the danger that it is considered a tax.”
The council voted unanimously to move the 2-percent increase of business license fees toward resolution next Monday night and the decided to remand the discussion on simplifying the list of business licenses to a later date.