Licensing-fee increases to bring in $2.3 million

Raises in professional licensing fees will bring in an additional $2.3 million next year, even though the state may be inappropriately "making" $13 million extra on business licenses.

In general, the fee increases are not unusual. Nearly every Legislature adjusts fees upward for inflation, or downward if regulators have a reason to do so.

All types of Utahns pay the license fees — from plumbers to barbers to brain surgeons.

State law says each license fee should be set at a level to bring in the amount needed for the state to oversee that profession or trade; the state should not be making any extra money on business regulation.

Yet the new head of the state Department of Commerce worries that his agency, which includes the main fee-setter — the Division of Professional Licensing (DOPL) — could be remitting as much as $13 million in extra proceeds to the state's General Fund this year.

"One of my goals this coming year is an exhaustive review of fees, and to the extent (higher) fees are not needed to pay for the regulation of business, to reduce fees," newly appointed Commerce boss Russell Skousen, a former Salt Lake County GOP councilman, said Friday as final budget bills were being considered in the House and Senate.

Skousen said that DOPL didn't suggest many fee increases this year but that several years ago big fee hikes were made.

"It's a concern," said House Speaker Greg Curtis, R-Sandy. "The Legislature raises fees based on recommendations from the executive branch. And if some are too high, they should be lowered."

Sen. Al Mansell, R-Sandy, said that the problem is not that DOPL is intentionally overcharging, but that the number of licensees rises at a faster rate than costs and results in a surplus. What needs to happen, preferably in the next session, is for the Commerce and Revenue Appropriations Subcommittee to reduce the fees to make revenue neutral again.

The last time that was done on a large scale was 1995, Mansell said, when there was a $4 million surplus.

"We should not be making money off of licenses," Mansell said. "It's just another tax on licensees."

Mansell would support using some of the extra revenue to fund additional investigators within DOPL. Currently, complaints against professional licensees can take as long as a year to be investigated because there is simply not enough manpower. "It is about time we re-examine the fee structure," said House Budget Chairman Ron Bigelow, R-West Valley, who, along with Curtis, had not heard that millions of dollars "extra" in fees could be flowing into the state's General Fund, the main non-education account.