Orange Beach proposing new tax, business license increase

BY JOHN MULLEN johnm@gulfcoastmedia.com
Posted 10/10/16

ORANGE BEACH, AL - Richard Schwartz waxed philosophical as he pondered the raising of business license fees and a tax on hard liquor the City of Orange Beach is considering.

“It’s just part of …

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Orange Beach proposing new tax, business license increase

Posted

ORANGE BEACH, AL - Richard Schwartz waxed philosophical as he pondered the raising of business license fees and a tax on hard liquor the City of Orange Beach is considering.

“It’s just part of what’s going on,” he said. “Everything costs more. Business licenses goes up, everything goes up. The price of shrimp has gone up 24 percent the past year. You just have to pay.

“It’s one of those things and just part of life.”

And, hearing the new revenue – the city estimates the two will generate $400,000 annually – will be used to help fund the Leave Only Footprints program, he wants to be supportive because he believes in the program.

“The fact that they got the beach cleaned up bothers some people, but I happen to think it’s a worthwhile thing and it cost money to do that,” he said. “And if I have to pay a little bit more I’m OK with it.”

But he also pointed out the city, whom he believes works side by side with him in his restaurant, also has a big surplus.

“That’s kind of hard to know that your business partner has got $44.5 million in the bank and looking for a way to get it to $45 million on the backs of businesses,” Schwartz said. “I understand their side, but when your buddy has $44.5 million and he wants you to kick in more, seems like everybody always comes after the businesses.”

Schwartz is the owner of the iconic Doc’s Seafood Shack and Oyster Bar in Orange Beach and has owned several restaurants in both Gulf Shores and Orange Beach during the years. Currently, he also owns the Doc’s in Gulf Shores and Hazel’s Nook in Gulf Shores.

City Councilman Jeff Boyd said he has heard similar complaints from business owners around the city.

“They’re going ‘Jeff, we have $40 million as a city, why are you taxing me?’” Boyd said. “That’s the part I have a problem with. And it’s valid. It just goes against what my stand was when I came here.

On the business license, the fees are broken down into various business categories and each categories’ fees are based on the yearly gross receipts.

“I’m not so sure I’m going to support it,” Boyd said. “My argument is I just don’t feel like a barber shop and print shop ought to have to pay for it.”

The 6 percent on liquor sales is the same for all businesses who serve alcohol and it does not tax beer and wine.

“If a tax increase is necessary to fund Leave Only Footprints, the restaurant industry should not be singled out to pay a disproportionate share of the tax,” Tacky Jacks Chief Financial Officer Ken Kichler said.

Schwartz says that will be about $2,000 a year for Doc’s in combined raised fees and liquor tax.

“Just footprints is a cute name,” Schwartz said. “It’s necessary. But it’s not the restaurants that mess up the beach or leave only footprints.”

Orange Beach financial director Clara Myers says license fees haven’t been raised since 2000 and the proposed increases will bring the city up closer to what Foley and Gulf Shores collect.

“And the majority of them are still less than the surrounding areas are,” Myers said. “Normally these were relatively small jumps for small businesses whereas the larger businesses do make a lot more revenue.”

Boyd said as businesses have grown during the years, and record revenues have been topped yearly since 2011, the city has also benefitted.

“If they profit, we profit from the additional sales taxes,” Myers said. “However, we continue to need more services to take care of those businesses.”

According to Marcy Kichler, a revenue supervisor with the Gulf Shores Finance Department, the 6 percent liquor tax raises about $160,000 a year there.

The proposed increases come on the heels of Orange Beach eliminating a sales tax discount in December. That measure is expected to get the city about $500,000 which is earmarked for Leave Only Footprints.

The total budget needed for the program is $1.3 million and if license fees are raised and the 6 percent liquor tax is passed, that will raise another $400,000.

“We’re’ hoping the cost of the $1.3 million is going to come down considerably because the capital cost of equipping was a one-time expense,” Mayor Tony Kennon said. “That doesn’t mean we don’t have to have money for repair and replacement going forward.”