Santa Clara County poised to give small businesses a break on fees

Small businesses in Santa Clara County can likely expect to get a break on permitting fees in the latest effort to give a boost to the local economy.

Supervisors Tuesday voted unanimously to take the first step to temporarily cancel a host of fees on small businesses, including restaurants, swimming pools and body art salons. A final vote is set to take place March 9.

Among items to be cancelled is the annual cost-of-living increase, about 2% per year.

The county will also suspend delinquency charges for annual permit renewals with the Department of Environmental Health, which are usually 25% of the establishment’s unpaid fee balance.

In addition, the county will no longer deactivate health permits for businesses that are not open. Businesses previously had to reapply for health permits before reopening but will no longer be required to do so.

The cost of health permits vary depending on the type of business but are typically $200 to $1,500, according to a county report.

“Two weeks ago we partnered on extending hero pay to the men and women working in our large retail and food service establishments,” Supervisor Susan Ellenberg said. “Today we are partnering on what I consider to be on the other side of this equity story. We need to get relief to the women and men who own our small businesses, many of which have been crushed by the pandemic and the policies to contain it.”

The report notes a large swath of businesses aren’t assessed fees at the county level, including most personal care services, gyms and recreational facilities, lodging facilities, movie theaters, music venues, stadiums and amusement parks.

But for those who are required to pay the fees, the suspensions will last for at least 180 days  with an option for the county to renew.

San Jose Councilmember Raul Peralez sent a letter to supervisors supporting the fee reductions. He pointed to his work on the city’s economic recovery task force and data that suggests small business revenue decreased by more than 40% in 2020.

“It goes without saying that our local economy continues to suffer and implementing these fee reliefs will be a great step in helping our small businesses survive and recover,” Peralez wrote.

Eddie Truong, a communications director for the Silicon Valley Organization, told supervisors the reduction was a “step in the right direction,” that it was equitable and gave much needed help to businesses disproportionately impacted by COVID-19.

According to the county, about 2,600 eateries are temporarily shuttered across Santa Clara County while an additional 1,000 have closed permanently.

“Let’s get our heads around that number,” Ellenberg said. “This represents the destruction of  lifetimes of work. We must do everything in our power to make sure that number doesn’t continue to grow.”

Other counties across California have taken similar action, including Alameda, Marin, San Diego and Los Angeles. Those counties used CARES Act funds by issuing “credits” instead of eliminating fees.

The action is expected to cost the Department of Environmental Protection at least $1.4 million in lost revenue through June, according to a staff report.

But Ellenberg said this is a small price to pay to help struggling businesses and in some ways could be considered an investment.

“We need to emphasize that only as a positive,” Ellenberg said. The county would be putting money back “into the hands of people that need it, whose businesses have been closed and curtailed.”

Contact Madelyn Reese at [email protected] or follow @MadelynGReese on Twitter.