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Vacaville reviews two options to modernize business‑license tax, with council split on rate and next steps
Summary
Consultants presented two tiered gross‑receipts business‑license models that would raise between $1.6M and $2.4M annually. Council debated impacts on small businesses, connection fees and where revenues would be spent; staff will return Feb. 10 with initial polling results.
The Vacaville City Council heard a detailed presentation Jan. 27 on proposed updates to the city’s business‑license tax structure and discussed two revenue scenarios intended to modernize an ordinance last substantially revised decades ago.
Consultants outlined two tiered flat‑rate gross‑receipts models with an AB split (Category A professional/advanced services; Category B all other businesses). Option 1 uses higher top rates and was modeled to generate roughly $2.4 million in annual general‑fund revenue; Option 2 halves the top‑end rates and would generate about $1.6 million in modeled revenue.
The team presented example scenarios (small cafe, supermarket, warehouse, professional firm) comparing Vacaville under each option to peer cities such as Fairfield, Napa and Vallejo, and showed how the proposed thresholds and flat tiers would change payments for businesses at various scales. Consultants noted the current system’s cap and complexity result in low revenue-per-resident and revenue-per-business compared to peers.
Council discussion focused on fairness and economic impacts. Vice Mayor Silva asked whether the council could better explain to residents what the money would fund and urged staff to consider supports for startups and small businesses. Councilmember Ritchie and Councilmember Chapman said they support option 1 to catch up with peers and fund services; Councilmember Stockton and others favored the softer Option 2 or more analysis, citing sewer connection and impact fees as a larger barrier to new business.
Staff said no final direction was requested tonight but asked for feedback; they will present initial voter survey (polling) results at the Feb. 10 council meeting and may return with ordinance language and potential ballot timing after further direction. The presentation noted any ballot measure or ordinance change would be subject to voter approval for final adoption if required.
