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Daily Planet Staff 

Scofflaws in Berkeley? 

Yep. 

And the city auditor has ferreted out dozens of them – businesses that did not pay their annual business license taxes. 

In the last fiscal year, ending in June, 186 business owners or professionals did not pay their business license taxes, five businesses under-reported their earnings and three had delinquent taxes, according to a report on tonight’s City Council agenda.  

“Based on these results, it appears that 10 percent or more of Berkeley businesses sampled were operating without a license,” Auditor Anne-Marie Hogan wrote. 

These business owners owed $340,000 to the city’s coffers last year. After the businesses 

were identified, the city collected $216,500 of the money owed. 

The City Council will discuss the auditor’s report at its meeting tonight. 

All persons engaged in business in Berkeley are required to obtain a license and pay fees based on their earnings.  

Some people do not know they are supposed to have a license, but ignorance of the law is no excuse, Hogan said. 

“I do believe the city could do a better job of publicizing the (requirement for) business licenses,” she added. 

In her report, the auditor recommends that the finance department do a better job of collecting the taxes. The finance department responds that it has just hired additional personnel to do the job. 

Liens were attached to some 20 properties last year, amounting to $43,000 in uncollected taxes. The county remits these funds to the city twice a year and the finance department receives payments on these liens. However, the finance department does not have a system in place to track the liens against the county’s remittances. So some of this money owed to the city may have been paid, but the auditor’s office has no way of knowing it. 

The finance department has agreed to make this information available to the auditor. 

The auditor’s report also asks the finance department to update its business license brochure. 

Another recommendation is one which Hogan is asking the council to put before the voters in November. 

It seems that in 1990, the city added savings and loans to its professional services category. (Business license taxes vary according to category.) 

“When ‘Savings and Loans’ was added, the rest of the list of professional categories was deleted from the section and placed in the nonprofessional section in error,” the report says. 

This reduced the taxes of businesses in that sector, including doctors, veterinarians, lawyers, engineers, architects, bookkeepers from $3.60 per $1,000 in gross receipts to $1.80 per $1,000 in gross receipts. 

These groups were inadvertently moved from a professional to nonprofessional category. 

Because of Proposition 218, and in order to put the professionals back into the professional category, the correction must be approved by voters. Hogan says she had asked for this to go on the November 1998 ballot, but, she said, “it slipped through the cracks.” 

The council may vote tonight to ask the city attorney to prepare a ballot measure, correcting the error.