City may target home-based businesses

The Evanston City Council Monday is scheduled to consider whether small, home-based businesses with no employees should be required to pay a fee and register with the city.

The city currently bars certain types of businesses -- including barbershops and medical clinics -- from operating out of homes.

It requires permits for what it calls "major" home-based businesses -- ones that have non-resident employees and more than six on-site client visits per day.

But "minor" home-based businesses -- ones with no non-resident employees and few on-site client visits -- are not required to register or pay a fee.

Examples of the home-based businesses that now can operate without registering include attorneys, therapists, telephone sales personnel and dressmakers.

A staff memo explains the difference by saying that historically minor home occupations have had a low impact on surrounding residents.

Expanding regulation of home-based businesses has been a goal of Alderman Delores Holmes, 5th Ward, who has argued that all businesses should be licensed and that the fee would be a new revenue source for the city.

But when the issue was raised three years ago, it drew opposition from Alderman Ann Rainey, 8th Ward, and others, and was ultimately removed from a package of license fee increases.

And when the issue more recently was referred to the Zoning Committee of the Plan Commission, the staff memo says, "the committee did not provide support" for amending the regulations.

The memo says that aside from landscapers and pool cleaning businesses, city staff has not received a substantial number of complaints about home-based businesses.

Neither of the suburbs that border Evanston -- Skokie and Wilmette -- require licensing of such home-based businesses, although city staff was able to find some communities that do, including one, Glenview, that charges a $35 annual fee.

The proposal before the council Monday would direct the Plan Commission to hold a hearing on a proposed ordinance to expand the registration requirement for home-based businesses.

Related document

Home-based business agenda item (.pdf)

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Comments

Leave it to the Council

Just when you thought the Council [and its "work is filthy" rich supporters] had tried every way to discourage business, they find a new way.

They may get a few dollars from this 'fee', then I'm sure we will see additional fees for inspections, audits, training sessions, sensitivity training, training on discrimination in the workplace [even though they have no employees], etc.-----but they will probably stop a lot of homebased small start-ups such as software developers, green energy research, etc.

Way to go Council !

Home-based business

Solving the city income crisis is not going to happen by nickel and diming.

This is so wrong!

This is so wrong on so many levels, not least that these small, non-intrusive home-based businesses are adding to the value created in Evanston at no cost to the City. It's painfully obvious that those pursuing this issue have absolutely no regard for any positive behaviors the residents of Evanston may engage in except as a nice fat wallet for the City to raid. I'm disgusted, but not surprised.

freelancing or business?

This seems like a slippery slope. Speaking as someone who used to freelance as a graphic designer, it can be difficult to define when someone is actually operating a home-based business. Often these businesses evolve from an experimental short term gig to fill some unemployment time, with starts and stops, booms and busts, and only become viable businesses almost by surprise and only temporarily.

For several years, I would work a few days a week in-house at one client, and then take home work from other clients. Or I would work in-house every day for one client for 6 months, then work exclusively at home for the next few months. Then maybe I'd take a temporary job as an official employee, and return to freelancing when that job was finished.

Many artists try their hands at many things to earn money by their crafts. These are often, again, evolving from money losing hobbies to quasi-businesses that may only add a bit of extra income on top of more traditional employment.

Evanston is chock full of residents working at home in ways similar to what I described above. Do we want to be a community that welcomes and nurtures such people, or discourages personal enterprise?

why does any business pay taxes?

I've never understood the reasoning behind taxing small business. The cost is simply passed on in the price of whatever is sold and discourages people from the risk-taking that is involved in starting a business. The reason given in this article, of providing more income for government, only feeds the perception that government is looking to dip its fingers into every till.

Huge industries get large subsidies (farming, oil, etc) that make no sense either. Taxes are taking from the income and then giving right back in subsidies - a crazy way to simply circulate money and support bureaucracy. Get rid of the taxes AND the subsidies, no?

Right now there is a controversy over online business escaping taxes - that this damages brick and mortar businesses that don't (true). Instead of taxing online sales, shouldn't we be wondering why any sales are taxed?

Of course, a huge business may demand extensive use of public services (utilities) or may damage the environment, to be paid for with assessments, but that isn't an issue with something done out of the home.

I'm with the Republicans when they speak of business as a wealth generator and employer that benefits all of us and their praise of those who, with their own money at stake, decide to start a business, but most of all it makes no sense to assess a tax on business that you and I end up paying anyway.

The only rationale I can think of for taxing sales is if society decides that consumption in itself should be discouraged.

I want to know - - -

How are "they" going to know who to tax? Sure, some will have their state tax numbers, and will have their "shingle" out; but what of the rest? A few might even voluntarily register and pay yet another tax to live and breath in the People's Republik.

Then I expect there will be a Snitch Reward System put into place- neighbors informing on neighbors. That seems like the way things happen here anyway - no facts needed *Tilted Kilt* before making emotionally-based decisions.

And who will then inspect the property for the "Greater Public Good" to verify that someone is running a business from their home?  The police?  What will the warrant read? Suspicion of dealing shawls: Search & seize yarn?  Suspicion of being a designer- search and seize paper and pencils?  What judge will issue a warrant like this?  What officer has enough free time to serve it and do an inspection?

What about other "business" types that may live in town? Writers? Illustrators? Musicians? Politicians? They work from home, conduct business by phone from home, schedule jobs and appointments from home. Are they going to be taxed as a business also? Will they be subject to Police searches for suspicious business-like behaviors?

Yet another excuse from the city to shove its collective nose into people's lives, and their grubby and grabby hands into our wallets.

When's that election again? This whole council has GOT to go.

 

When will the Council learn ?

This new 'tax' reminds me of the saying:

Call for new business and bribe them to come [at least the Council is not done this yet for home business].

If it moves, tax it.

When they fail [or are put out of business by taxes/regulations] give them a subsidy.

=======================

By the way, how is that working out with having new tenants for the Borders building that the city claimed new tenants would be fighting to get into.  Looks more like Borders 2 will be more like Borders 1.

The Origins of Civil Contempt...

This ordinance will not raise revenues. It will nurture citizen contempt for politicians and big government.

"Remember this," said New York Governor Horatio Seymour, "that the doctrine of public policy can be proclaimed by a mob as well as by a government."

It is possible to squeeze good people too hard.

Riots in the streets

We haven't had riots in the streets since Vietnam, but the way Obama and this City Council are crushing our economy, I think Americans are beginning to feel the fever.

We need an organized coalition of fiscal conservatives

Delores Holmes' Fifth Ward is probably the most hard- hit ward in Evanston during this recession. On top of that, I know there are home-based businesses in her ward. It would be much worse had the Fifth Ward not received the $18 million Neighborhood Stabilization Grant from the federal stimulus program.

Why is Holmes calling for this anti-business requirement? Does she want to give the city clerk more work?

It just doesn't make sense to keep going in this direction - MORE government regulations, higher taxes and utility rates and anti-business sentiment coming from our elected officials during the worst economy since the Great Depression.

I am also disappointed that the Evanston Chamber of Commerce has been silent about the City Council's destructive policies on our local economy. Evanston property values continue to fall while the commercial vacancy rate rises. This is an immense strain on Evanston property owners, many of whom saw their tax bills increase this year.

It's my strong opinion that reputation also plays a key role that makes or break an economically successful city. Thanks to our local leaders - city and school  - Evanston in the past few years has garnered a negative reputation as a difficult city to do business with. Evanstonians and the business community need to be confident in and trust their elected officials. It's hard to do that when:

- The Council wants to either tax or ban bags

-   The mayor nixes a liquor license to a high-end sports bar because she thinks the dress-wear is to revealing. As a result, the storefront remains vacant and the city lost hundreds of thousands annually in potential food and liquor tax revenue.

- The Council restricts religious institutions in commercial districts at a time landlords can't find any other tenants.

- Aldermen, who are part-time elected officials, are exploring the idea to give themselves a pension as well as the part-time Township Assessor, Bonnie Wilson. It has been reported that the City Clerk had signed a document that had been submitted to the pension system, claiming aldermen had already approved such a resolution for the Township Assessor way back on Jan. 11, 2010.

- In 2008 at the height of the recession aldermen voted to give themselves a 20 percent pay raise.

- Aldermen passed a cell phone ban ordinance but exempted city employees and themselves from the ordinance as if somehow they can drive safer  than the rest of us while talking on the cell phone.

- Alderman in 2009 passed a green ordinance that requires large developments over 10,000 square feet to get LEED certification - a timely and somewhat expensive venture.

- Aldermen spent valuable  time and energy deciding what to call themselves

- Aldermen last year voted to raise city and gas taxes and water rates.

I think Evanston's economic problems are getting to the point where a drastic 180 degree shift in our leadership and local policies will be needed to stem the damage the Council has already done.

The best way to do that is if a coalition of citizens form and appoint fiscal conservative representatives from each ward to run against the incumbents. Other than that, it will be business as usual, which is not much business.

 

Chamber of Commerce Silence

Dear Anonymous,

The Evanston Chamber of Commerce is a membership organization.  We advocate first and foremost on behalf of its members and of course the business community at large.  Because the board is in close contact with city officials, we have an idea of what initiatives are in the pipeline. 

Plastic Bag Ordinance Proposal:  Key Chamber members, including myself, attended meetings organized by the city.  In this meeting, the Chamber presented a survey from its members that responded  about the ordinance "as was" at the time (90% of responding businesses who actually use bags opposed any tax and 60% of businesses who do not use bags opposed any tax but most agreed that strategies to reduce or eliminate plastic bag consumption in Evanston was a good thing and were glad about the conversation aspect, started by Alderman Burrus).  We will survey our members again, when any new ordinance starts taking shape.

Home Based Business Fee: The Chamber of Commerce is aware of this and would object to any such ordinance for a sole proprietor who calls home work, such as an attorney or consultant or other professional who is not in any violation of current city code for their enterprise.  The proposal has no chance, so no need to make odds publicly with the Alderman that proposed it.  You can't agree with everyone all of the time.   

The bottom line is this:  The Chamber of Commerce works with city officials on a week to week basis in a positive fashion 90% of the time.  10% of the time we may be at odds, which we do so in a professional manner.   The Chamber is not interested in antagonizing city officials using public channels, rather working towards a balance between community and commerce.   If you ask the Mayor, the City Manager, and Alderpersons,  they will tell you that the Chamber does speak up directly to them if we are not happy with the direction the city is taking.   

If it appears that a proposed ordinance that seems counter productive to business growth has a chance, the Chamber of Commerce will speak out with a formal position statement that best reflects our membership base and the business community at large. The Chamber can't control aldermanic proposals, only respond to them.  Evanston Now reports on proposals as soon as they are introduced, but keep in mind that these are only just that: a proposal. To be fair to the city, the Chamber is approached often for input.  The Chamber always welcomes these opportunities to be in front of the issues.  

Here are two issues (one recent and one in the past)  the Chamber publicly fought against:

The LEED Certified Green Ordinance.  In 2010, the Chamber let the council know that the ordinance was too restrictive and would discourage redevelopment.  In 2011, Gordon Foods then balked at this very ordinance when looking at the Oakton/Asbury Location. By the way, the city is now considering changes.  

Natural Gas Tax Formula that imposed a disproportionate heavy burden on businesses.  The Chamber went crazy on this about 7 years ago to protect our most valuable restaurant sector as well as any customer affected.  This new formula never came into being.

Sorry if you feel the Chamber is not publicly barking loud enough.  We'll only do so when all the facts are present in any issue that is counter productive to the economic health of our members and businesses at large.

Dan Mennemeyer
Evanston Chamber of Commerce President

Home businesses

There is a HUGE untapped revenue base here! Imagine the money the city will get from babysitters, leamonaide stands, etc.! The city's debt will be a distant memory!