Re­port: Lit­tle ben­e­fit from ‘tech­nol­ogy fee’ levied

$71M col­lected, but no clear path to spend­ing

The Washington Times Daily - - METRO - BY RYAN M. MCDER­MOTT

The Dis­trict has col­lected more than $7 mil­lion from busi­nesses to up­grade its li­cens­ing sys­tem but has lit­tle to show for its so-called “tech­nol­ogy fee,” a new re­port says.

“Eight years have passed since the adop­tion of the tech­nol­ogy fee, and it is hard to find any clear ev­i­dence of how the city uses the money from this fee,” David Bishop, a re­searcher for the D.C. Pol­icy Cen­ter, wrote in a pa­per pub­lished by the think tank on Mon­day.

The Dis­trict in 2010 added a 10 per­cent charge to the cost of its ba­sic busi­ness li­cense, calling it a “tech­nol­ogy fee.” The ex­tra money was to cover the cost of up­grad­ing the city’s busi­ness li­cens­ing sys­tem. The fee was sup­posed to ex­pire af­ter three years, but it was ex­tended in 2013 and then made per­ma­nent by the D.C. Coun­cil last month.

So far, the Dis­trict has col­lected about $71 mil­lion from the busi­ness li­cense fee in to­tal and more than $7 mil­lion of that was for tech­nol­ogy up­grades. The city is set to col­lect an­other $4.6 mil­lion in tech­nol­ogy fees by 2021.

But where the money ac­tu­ally is go­ing is a mys­tery, ac­cord­ing to Mr. Bishop.

“No reg­u­lar plan has emerged on the use of rev­enue from the tech­nol­ogy fee, and no ac­count­ing ex­ists on how the city has so far used these rev­enues,” he wrote. “Scour­ing bud­get books [does] not tell us much.”

Mr. Bishop sur­mised that the money likely is be­ing used to sup­port ex­ist­ing IT sys­tems, with an oc­ca­sional in­vest­ment in new tech­nol­ogy.

“Busi­ness own­ers have rea­son to be skep­ti­cal that the tech­nol­ogy fees they pay truly go to­wards im­prov­ing their ex­pe­ri­ence with the D.C. gov­ern­ment,” he wrote. “Since 2011, each year busi­nesses have con­trib­uted in­creas­ingly more money to­wards the ba­sic busi­ness li­cense fund. Un­for­tu­nately, the tech­nol­ogy has not im­proved at the same pace.”

Kevin Harris, a spokesman for Mayor Muriel Bowser, said the money is be­ing well spent, not­ing that the city re­cently launched the D.C. Busi­ness Por­tal, which al­lows ap­pli­cants to ap­ply for and ob­tain li­censes en­tirely on­line.

So far, the Dis­trict has spent about $4.7 mil­lion get­ting the por­tal up and run­ning.

“Through that in­vest­ment, the Dis­trict has ab­so­lutely made good on its com­mit­ment to use the Ba­sic Busi­ness Li­cense Tech­nol­ogy Fee rev­enue to im­prove the li­cens­ing tech­nol­ogy sys­tem,” Mr. Harris said Tues­day.

He said that since late Au­gust, more than 7,300 busi­nesses have used the por­tal, also known as the D.C. Busi­ness Cen­ter, to ob­tain or re­new a li­cense.

Mr. Bishop cred­ited the city for get­ting the por­tal on­line.

“To be sure, the Dis­trict has made slow and steady progress to­ward im­prov­ing the abil­ity of own­ers to main­tain their busi­nesses in good stand­ing via in­ter­net-ac­ces­si­ble sys­tems,” he wrote. “The good news is that the in­vest­ment thus far has suc­cess­fully re­placed an in­fa­mously in­ef­fec­tual on­line form that the [Depart­ment of Con­sumer and Reg­u­la­tory Af­fairs] had de­vel­oped in­house.”

But Mr. Bishop said that even with the por­tal, some of the most ba­sic rec­om­men­da­tions of 2014 Busi­ness Reg­u­la­tory Re­form Task Force have been ig­nored.

“Busi­nesses still must deal with the dif­fer­ent IT sys­tems of dif­fer­ent agen­cies and not a sin­gle, uni­fied D.C. sys­tem, as was promised,” he wrote. “The fea­tures and ease-of-use avail­able through the D.C. Busi­ness Cen­ter fall well short of the ideal con­sol­i­dated plat­form that is pos­si­ble with today’s tech­no­log­i­cal ca­pa­bil­i­ties.”

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