Lynnwood business owners struggle with license fee increase

December 27, 2010


LYNNWOOD, Wash. – A business tax boost about to go into effect in Lynnwood has some saying it’s just too much. Starting January 1st, business owners are going to have to start paying a lot more, about five times more, to do business in the city.

Some small business owners say it's enough to make them want to pack up and leave Lynnwood.

The city confirms it's received more than 50 phone calls about this at city hall. Many of the calls are from upset owners after they recently received a letter stating businesses will have to start paying more for their business licenses immediately.

 Eric Elliott, the owner of Valley Techs Inc., a small computer business in Lynnwood, received the letter. Instead of paying $15.50 per employee, he will have to start paying $85 per employee annually.

It is a decision Lynnwood's city council made the last week of November in order to fill the nearly $22 million budget hole.

Elliott says he was not aware of that city council meeting, and had no idea the city was even considering this increase. The letter stating it was happening came as a shock.

"We have an established business here. We are happy in Lynnwood, but now they give us this fee and we have to accept it or move. The cost of moving is several thousand dollars, so essentially we are trapped," says Elliott.

Patrick Dugan, Lynnwood's Interim Finance Director, says the city is trying to balance the budget without cutting jobs.

"The more severe option would be to continue a process that we started to lay off a hundred employees, and these measures allowed us to avoid that dramatic cut," says Dugan.

Lynnwood had to lay off about 20 employees.

Property and utility taxes will also increase in order to balance the budget.