CBS12 News Team

UPDATE: Delray Beach city leaders approve 5-percent business tax

DELRAY BEACH, Fla. -- For the first time in four years the city of Delray Beach has raised its business tax. City commissioners have decided to raise taxes by 5-percent from the current $156 a year to $164.

This is the first time in four years the city has raised its business tax, and commissioners say they believe the five-percent increase is small enough that it won't put too much pressure on business owners. It's also a way for the city to collect more money, as it works to keep the budget balanced.

Chamber of Commerce officials in Delray Beach says this is a small tax on yearly licensing fees, not sales. Most businesses will have no problems coming up with the extra cash, but their opposition is a matter of principal.

Michael Malone/Delray Beach Chamber of Commerce: It isn't a very big tax. The issue really is the idea of a tax to begin with on businesses in an economy that's trying to recover. Businesses feel any sort of thing that gets in their way of success it can hurt them in the long run.

Meantime, the city of Delray Beach could be looking for money elsewhere. If you remember in a recent CBS 12 Waste Watch report we looked at how the city is losing money with its beach chair service.

Oceanside Beach Service pays the city $170,000 a year for the right to rent beach chairs and umbrellas to tourists. Oceanside won the contract in a heated bid process in 2009. At the time, another company offered to pay even more, but the city threw out that bid over a technicality. This year, Oceanside's contract was set to expire, with the city getting a chance to put the service out for bid again. But they didn't. Instead, the city signed a three year extension with Oceanside at the same price.

Delray Beach's city manager says that getting additional money for the city isn't the issue. He said it's all about service.

The other company tells CBS 12 it offered to pay the city $70,000 more than Oceanside for the same service.

Thursday, July 5 2012, 11:16 PM EDT

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