A controversial proposal to require businesses in Chester County to have a license has been voted down by the Chester County Council.
Before the final reading on the ordinance Monday, Councilman Alex Oliphant proposed cutting license fees in half.
That motion failed and the license ordinance was then unanimously defeated.
The vote means County Supervisor Carlisle Roddey will have to either cut the budget, take money from reserves or propose a tax increase to fund a $250,000 shortfall.
Business licenses were budgeted to raise $250,000. Oliphant said the revenues would likely have been more.
The effect of the council’s decision on business licenses places in question plans for a 3-percent raise for county employees. The $250,000 anticipated from business license fees is about equal to the cost of the raises. County employees, who have gone more than five years without a raise, were slated to get the raise at the beginning of 2014.
Roddey previously said employee raises would not be affected by the vote on the business licenses. On Wednesday, he said cutting the raises could be considered.
Roddey said a 10-percent across-the-board budget cut also is possible.
“I’ve had to do that before,” he said.
Council members Archie Lucas and Oliphant said employee wages should be “off the table. Our employees are already underpaid.”
The proposed business license was similar to what is in place in other localities such as the cities of Chester and Rock Hill.
Businesses are divided into categories based on a national classification system. Groups within the system include agriculture, professional services, retail, accommodations and food service and manufacturing.
Each class is charged a basic fee that covers the first $2,000 in gross revenue. An extra fee is added for each additional $1,000 of gross revenue.
The city of Chester’s basic fee ranges from $32.50 to $160 depending on the class.
Fees for each additional $1,000 in gross revenue range from 43 cents to $1.87. The city of Chester collects about $123,000 annually in business licenses.
Council members were reluctant to pass anything that would affect the chances of the more 1,800 out-of-work Chester County residents getting jobs.
Lucas said the county needs to find a better way to regulate home businesses or businesses that sell from a truck or a street corner. Businesses with a physical location are taxed at a 6 percent rate while those who work from home pay 4 percent.
“Is that fair?” Lucas asked. “We should survey businesses and then ask for suggestions.”
Lucas said he was concerned how the license would affect people on fixed incomes.
At a special meeting Wednesday, the Chester County Council approved special source revenue credits that would reduce the property taxes for a manufacturing company considering locating in the county.
The business is considering investing $45 million in a plant that would create 318 jobs.
A final vote on the credits is scheduled for Sept. 5.
Don Worthington • 803-329-4066