Happy New Year — oh, have another lump of coal!
As a long-time business owner in Federal Way, you can imagine my first reaction receiving a Dec. 7 letter on Dec. 16, from Federal Way City Hall informing me of the “new” license fees for 2017 onward.
The letter was the first I had heard of this. No phone call, no email saying, “Hey, we’re going to jack up your license fees for doing business in Federal Way,” and the purported reason for doing this is “so Federal Way can be like so many other cities around Puget Sound.”
My chiropractor isn’t happy about this either. Neither are the businesses in my office building. No one I’ve talked to knew about this fee increase, which took place without any prior study announced, any reasoning provided, just a backroom deal done without inviting stakeholders like myself to come and sit down with the economic gurus employed at City Hall. Heck, a lot of local business people still don’t know about it. Was this another blue ribbon panel study?!
Hmmm, I wonder if any of the folks at City Hall have ever really owned a business that they’ve built from scratch and have been in business successfully for more than 20 years with employees where you had to meet payroll, pay ever rising taxes, deal with customers and clients.
Here are the “new” fees for doing business in Federal Way, and I cannot find another city with this inventory of fees. I’ve found variations on other business licenses but nothing that approaches the money grab found here.
Zero to 10 employees: $80; 11 to 25 employees: $125; 26 to 50 employees: $250; 51 to 100 employees: $1,500; 101 to 500 employees: $4,500; 501 to 1,000 employees: $9,500; outside contractor: $80; home occupation: $50; temporary business registration: $50.
I see several problems with this scheme. First of all, there is no description of where those employees are located, inside Federal Way or outside Federal Way. I am raising this as a red flag for all business owners within the city limits of Federal Way. I have talked with the Federal Way Chamber of Commerce staff, and no one there seemed to know anything about this new license fee structure. There was absolutely no discussion in the business community about this new license fee structure. As a member in good standing of the Association of Washington Business (i.e., the state chamber of commerce), I submitted a request to AWB asking them to look into this situation. I have contacted nearby city governments and cannot find another one that has this exact scheme in place.
However, in a recent conversation with economic development staff of a nearby city, they were “ecstatic” that Federal Way was adopting this because it would make them vastly more competitive. Would you rather locate a business in a city with a flat license fee or fall into a spiraling license fee as you grow your business and need to hire more people?
By the way, if you are a licensed subcontractor with the state of Washington, guess what, it’s my opinion you’re now going to be discovered and probably have to pay yet another license fee to the city of Federal Way.
This is all sounding like the events that led up to the Boston Tea Party, taxation without representation, cleverly couched as a “fee.”
PS: For 2017, Gov. Jay Inslee is proposing an increase in B&O taxes from 1.5 percent to 2.5 percent on a number of businesses. I guess government is targeting businesses, like those in the service industry, because no one in the general public really knows what those folks pay in taxes. Let me assure you, we pay a ton of taxes every year.
PPS: For you history buffs, the dates mentioned in the opening paragraph are historically significant dates: Dec. 7 is the date Pearl Harbor was attacked and Dec. 16 is when the Boston Tea Party took place.
PPPS: I would ask that City Hall and its economic development staff rescind this fee schedule and start fresh by inviting the business community to participate and reveal to all of us what these new and additional funds are going to be used for in our community.
After all, we were all told that the PAEC would not require additional taxes and these fees would apparently be in lieu of taxes. Remember, we were told approval of the PAEC was going to be voted on by the community, which didn’t happen.
Roger Flygare, Federal Way
