New Business Taxes Get Initial OK

The El Segundo City Council on Tuesday gave tentative approval to a new business tax package that will add $3.3 million in the next fiscal year to the $10 million in taxes paid by city businesses.

The tax has the support of a majority of the council and the business community. In a departure from past battles over levies on industry in the city, the tax was crafted by city officials with the Chamber of Commerce. City revenues this year are $38 million.

“Our business tax has been based on the number of employees in the city,” City Manager Ron Cano said. “But with the fluctuating economy, we’ve decided to base the new tax on acreage and square footage, which remain constant.”

The proposed tax plan would increase the acreage and utility users’ taxes. The acreage tax would triple from $500 to a proposed $1,500 per acre. The utility users’ tax, paid only by businesses, would increase from 2% to 3%.

The square-footage tax would increase from 20 cents per square foot to 24 cents. The square-footage tax on unoccupied buildings would be halved from 20 cents to 10 cents.

Other components of the tax plan include increasing the business license fee from $50 to $100.

The council scheduled a June 4 public hearing on the proposal.