WHY ARE SHREVEPORT’S OCCUPATIONAL LICENSE FEES DECREASING?

There are two realities that can not be denied. 

The city of Shreveport needs more revenues. And the city needs to cut expenses.

On the revenue side, legislative action has been taken.

In January, Mayor Perkins introduced a Clean City User Fee of $18 per month. In May, the city council adopted a $7 per month garbage fee.

On the expense side, the Perkins administration has acted. 

Shreveport’s new Chief Technology Officer Keith Hanson has already achieved costs savings of over $200 grand.

Council chair Jerry Bowman, Jr. introduced an ordinance to reduce funding for school crossing guards. From the public outcry, one would have thought he had suggested eliminating Christmas as a city holiday.

But what about occupational license fees? No one has addressed this issue. Not Perkins. Not the new council.

In 2015 the city collected over $7.2 million in these fees. Last year, these revenues dropped to less than $6 million. To be exact, $5,923,936.

Shreveport city ordinances impose an annual occupational license tax upon any business, trade, calling, profession or vocation. The ordinance also includes itinerant vendors, concerts, gun shows, arts and crafts shows, and real estate brokers.

The taxes are payable on a sliding scale, depending upon the gross receipts.. Professionals are taxed at 1/10 of 1% of gross revenues, retailers at about .01% of sales, and wholesales are less than .05% of sales. These license fees are paid annually to the Shreveport Department of Finance. 

Occupational license taxes are separate from certificates of occupancy. These are required when a new business opens, there is an ownership change or an existing business relocates. 

So, why have the occupational license revenues declined annually since 2015?

Prior council members have addressed this issue. One estimate has put lost revenues of well over a million dollars annually.

The standard answer, provided through the years, is lack of employees for enforcement. Specifically, insufficient funds for more personnel.

That answer ignores basic economics. Seemingly, more employees would generate license fees far in excess of their total employment costs.

How about a contracted service to identify the many businesses without occupational licenses? Maybe paid on a percentage of additional revenues generated.

Enforcing this ordinance would also level the playing field for those businesses who comply with the occupational license ordinance with those who do not. Why give a competitive advantage to non compliant businesses?

Revenue ordinances should be aggressively enforced. To do otherwise is contrary to good government practices. 


(THIS COLUMN WAS PUBLISHED IN THE SHREVEPORT TIMES ON SUNDAY, MAY 19, 2019)