Rybak drops proposed 'health risk' business tax

Minneapolis Mayor R.T. Rybak's office announced Monday that it will drop a proposed fee increase on local businesses to pay for extra health inspectors.

The "health risk impact fee" would have been levied on city restaurants, food trucks, hotels, pools and tattoo parlors to raise upwards of $728,000 and pay for six inspectors. Full-service restaurants likely would have paid the most -- perhaps between $350 and $450 a year.

City officials decided the fee wasn't necessary, however, after reviewing new revenue projections, according to an e-mail that mayoral aide Peter Wagenius sent to City Council members Monday.

"Based on those revised -- and positive -- projections, the Finance Department believes the needed additional inspectors can be hired with projected revenues and without the Food & Health Safety Fee," Wagenius wrote.

That's likely to bring some relief to local business groups, which fiercely resisted the proposal. Wagenius said the mayor recommends delaying consideration of the idea "until next year."

Hiring food inspectors became a high priority at City Hall after the state Department of Health deemed the city's health inspection program "unacceptable" in 2010.

Among problems cited by the state, the frequency of inspections remains under par in 2012. That's because the city has one inspector for every 377 facilities. The FDA recommends one for every 180 to 225 facilities.

"I'm just glad that our finance department ... had confidence in the revenue projections to be able to raise the amount that we projected to come in for the year," Glidden said.

Joyce Wisdom, executive director of the Lake Street Council, a business association, said, "We're very pleased." She added that one of the top problems with the proposal was that it would have weighed more heavily on facilities that do a lot of prep work on-site. In other words, a locally sourced restaurant might pay more than a chain that merely heats and serves food.

"It was exactly the opposite from what the city of Minneapolis, in particular, has been doing in terms of encouraging 'Eat local, buy fresh,'" Wisdom said.

It's the second win for businesses this year regarding city fees. In September, a council panel shot down a proposal to raise all licensing fees by 3 percent.