Business fees need closer look

If there is one attribute that all government fees should have in common, it is fairness. That's why we have trouble with the Medford City Council's approach to the city's business license fee.

The most recent development in the long-running debate over the Medford fee was Ashland freelance photographer Rob Werfel's appeal of the $60 fee the city wanted him to pay because he occasionally shoots pictures here. Werfel asked to be exempted from the fee because other photographers aren't being asked to pay it.

Mayor Gary Wheeler broke a tie vote of the City Council to deny Werfel the exemption. The rare tie vote is evidence of just how controversial the city's policy is, and is an indication that the fee structure needs to be revisited, as Councilman Ben Truwe suggested.

The debate probably wouldn't even be taking place if the city had not begun aggressively enforcing the fee on out-of-town businesses earlier this year. City staff members scanned advertisements and telephone listings in search of businesses situated outside Medford that might do some business inside the city limits.

Werfel, whose business is home-based, is liable for a $60 fee. But a Grants Pass photographer who maintains a building in that city must pay $100, even though only about 5 percent of his business is in Medford.

Real estate agents, meanwhile, turned to the Legislature for relief. Because they are regulated by the state Real Estate Agency, the Legislature can dictate how local governments treat them.

The proposed bill, which would have exempted brokers from paying a business license fee unless they maintained an office in the city or county assessing the fee, never made it out of committee. But it's clear that trying to impose a fee that is fair to everyone gets very complicated very quickly.

It's virtually certain that, if real-estate brokers succeed in gaining an exemption from the Legislature, other state-regulated businesses will be lining up for the same treatment. But because the state does not regulate freelance photographers and many other small businesses, those entrepreneurs will be stuck.

Adding to the unfairness is the huge disparity between what a photographer would earn by shooting a few jobs in Medford and what a real-estate broker stands to clear from selling a single house.

We can imagine a situation in which charging a license fee would make sense. For example, a contractor who maintains a business address outside the city but does virtually all of his business in town ought to pay something for the privilege. But a small-business person working from home in Ashland or Phoenix who does very little business in Medford could make a case for an exemption.

These are not easy distinctions to make. All the more reason for the council to reconsider the entire license fee structure, and soon.

It's only fair.

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