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Business License Tag A change to the City's business license fee structure was approved as one element in the 1995-96 Budget Strategies. This strategy called for a limited increase in revenue to support City service levels. The original revised business license concept presented to the City Council in May 1995 moved the City to a full gross receipts or payroll -based fee, although containing unique elements (rates lower than most other cities in Alameda County and thresholds below which gross receipts were exempted). At the City Council's direction, staff conducted discussions with many businesses regarding the revised businesses license tax. As a result, significant changes from the original fee structure were proposed. In general, the proposed rates included a base fee in the amount of $50 and a fee for each employee ranging from $12 to $30. Gross receipts calculations are also required on receipts exceeding $1,000,000 ($5000,000 for Professional; Manufacturing shall be exempt from any gross receipts fee). A limited number of businesses (i.e. residential and non- residential property, itinerant merchants, and waste disposal sites) reflect a group V classification and will experience minor fee adjustments. The business license fee structure contained in the business license ordinance ensures both fairness and equity among businesses and maintains the distinction of the City's business license fee staying low relative to all neighboring jurisdictions. The revised Business License Structure was approved by the City Council on November 6, 1995. Staff has recently met with representatives of the Chamber of Commerce and Industrial Roundtable to obtain support for the business license ordinance. With some modifications, it appears the business community will not oppose continuation of the gross receipts tax feature of the business license tax. The Chamber has previously indicated it is opposed to the tax on firearms. DISCUSSION Due to the passage of Proposition 218, which requires a majority of voters to approve increases in general taxes, the City Council is required to bring the Firearm Gross Receipts Tax and the Business License Tax before the people for a majority vote. Only after a majority vote will the Firearms Gross Receipts Tax be implemented and the Businesses License Tax continue in its revised state. The City Council may choose to have the ordinances appear as separate items or together on the June 2, 1998, General Municipal election. CONCLUSION Staff is seeking City Council direction on the manner in which these two ordinances are to be presented to the voters for the June 2, 1998 municipal election. The current ordinances provide that they will appear as separate ballot measures. The Oakland City Council approved a resolution to place the Firearms Gross Receipts License on the June 2, 1998 General Municipal Election at a City Council meeting in December 1997 (see attachment). The City of Berkeley's City Attorney has informed staff that the City Council will approve a resolution to bring a firearm gross receipts tax to its electors in November 1998. 180