Business leaders unite to oppose city’s B&O tax proposal, offer alternative plan
Almost nobody likes the proposed Business & Occupation tax. Not even some who support the idea.
"It’s no fun," said Vancouver City Council Member Dan Tonkovich. "It’s not going to make any of the council members any friends. It’s (an option) that nobody likes, including myself."
Tonkovich feels the B&O tax is a necessary evil – the only viable option in a two-year debate on how best to generate funds for police, fire and transportation in the city. He feels it’s the only way to generate the level of revenue needed to fund such services. Still, the council is at once solid in its belief in the B&O tax and unclear on whether or not to impose the ordinance.
"We haven’t decided if we’re going to implement the B&O or not," Tonkovich said.
The Greater Vancouver Chamber of Commerce, an opponent of the tax from the onset, not only opposes the idea, but has officially proposed an alternative. The chamber is a member of a business coalition formed in September, comprised of eleven representatives from the Columbia River Economic Development Council, Identity Clark County, the Downtown Association and a host of area businesses. The coalition on Oct. 12 published a position advocating a return to the business surcharge model, which would bring $50 per employee with a $20,000 cap for each business.
"The B&O tax is not a workable idea," said coalition member Ginger Metcalf. "As currently proposed, it is not equitable."
To support her assertion, Metcalf referred to what she calls the "check writers" of the equation, arguing that the tax on gross revenue would hit some types of businesses harder than others.
"The B&O tax would aggressively hit people with high revenues but very narrow profit margins," Alan Webb of Alan Webb Nissan. "Although (car dealerships) do a lot of business, we have a very thin profit margin. I think what’s happening is (that) it’s real easy to put the burden on the business community."
Webb said under the surcharge model, he would pay a hypothetical $4,000 annually, while under the B&O tax, that number would increase. To address this concern, the city Nov. 6 will offer for consideration a modified version of the current ordinance, which would tax different business sectors on a varying percentage scale.
Metcalf said the modified ordinance would only soften the blow, and would still be a heavy hit to business.
Whether the ordinance is modified or not, the very idea has caused Webb to consider drastic measures.
"I own another store and I’m contemplating moving it out of the city limits. That’s going to be part of the equation and it’s not going to be friendly," he said.
Other indications suggest the debate is already less-than-friendly. The coalition has also offered to act as an advisory board to the city.
"That’s something that struck me as rather odd," said Tonkovich. "My opinion is that is a rather curious proposal, I’m not sure what they’re getting at with that."
Metcalf maintains the offered help is needed.
"I think if I were a council member with not much real business world experience, I would want to work with some business people to help me make decisions," she said.
That nothwithstanding, money remains the center of the city’s position on the matter. The city reports the "unmet needs" of the city to be somewhere between $13 million and $27 million, with transportation alone sitting between $10 million and $20 million. The new B&O tax ordinance would generate close to $10 million in its second year, making it, in the opinion of the city, the best that can be done.
City officials expect to make a decision on the issue in the next three weeks.
"The only option left remaining that makes any sense is the B&O option," Tonkovich said.
And as decision time draws near, attrition seems to be on their side.
"The sooner they make a decision, the sooner we can get on with business," Metcalf said.
