Rule Five Step In The Right Direction Friday

Finally, some good news, in that one level of government is actually scaling back some requirements!  Granted, it’s just our local Matanuska-Susitna Borough, which is proposing to repeal the Borough’s required business license.  The state license will still be required, but hey, it’s a start.

A proposal to end the requirement is scheduled for an April 2 borough Assembly hearing.

Each borough license carries a $100 fee and must be renewed every two years. Businesses operating in Alaska must also hold a state-issued license, which carries a $50 annual fee. And those in Palmer, Wasilla or Houston city limits are also required to carry a city-issued license, which cost $25 each year.

The licensing fees can create an unnecessary burden, particularly for small or home-based businesses, borough Mayor Edna DeVries said in an interview this week.

Business license fees in Mat-Su essentially function as a tax, according to a memo accompanying the proposal.

The city taxes don’t apply to us out here in the Borough, and the removal of the Borough license requirement would cut our business tax liability by two-thirds. I’ll take that.

Borough officials do not use the license process to regulate or police businesses, and the information submitted in each business application is not used for economic development, DeVries said. The borough also does not enforce the proper display of licenses, she said.

“It just seemed to me like it was one of those things where we didn’t actually need it,” she said.

I think Edna DeVries just earned my vote in the next Mayoral election.

While this is a small issue in the greater scheme of things, and while the calculus isn’t necessarily on the focus of making things easier on Mat-Su businesses, it’s nevertheless a step in the right direction and a small sign of progress.  Consider our lines of work: I’m a journalist, my wife a publisher; the liabilities incurred in our businesses are essentially non-existent, unlike, say, a carpenter, who if he is incapable, may result in a house collapsing on its owners.  We present little physical risk to the community should we screw up, and we carry insurance to cover what mishaps we may encounter – so why, then, should we be required to apply to permission from the Borough to conduct our affairs?

Answer: In a sane world, a world that values liberty, we shouldn’t.

The borough collected about $630,000 in business license fees in fiscal year 2023, according to the proposal memo, with about $94,000 of that paying for the salary of a full-time borough employee who manages the licenses.

Losing that income will have a “negligible impact on the borough’s finances,” the memo states. That’s because repealing the fee would not eliminate the employee from the system. Instead, the change could free up time to apply for state and federal grants, which bring in far more than the licenses, DeVries said.

“Within the administration, one of our greatest needs with all of the grants out there is to have somebody who can have some more time,” she said.

Now I’m not too sure about what grants the Borough is applying for, but that’s a topic for another day.  What is apparent is that the Borough appears to be doing some fiscal calculations and is determining that this licensing requirement just isn’t worth the effort.  That’s how government should work.  That’s why government works best when it’s as close to the people as it can possibly be.