The state Department of Health wants to raise the food service permit fee charged to restaurants and other food vendors from $35 to $75 a year, state lawmakers learned Thursday.
The fee for the food service permit was last raised in 1999, from $25 to $35, said Robert Brech, chief financial officer for the department.
The fee raises about $372,000 a year in revenue for the department and, at $40 more, it's projected the fee would raise an additional $400,000 a year, he said.
That would still be a fraction of the amount the state spends on the inspections, according to state records.
Food service establishments selling food that requires temperature control to remain safe are required to get permits from the Health Department, according to the department's website. Examples of food service establishments include restaurants, daycare centers, schools, grocery stores, convenience stores, bed and breakfasts, hotels and motels, mobile units, and concession stands.
Department Director Nathaniel Smith told lawmakers Thursday that Arkansas' food service inspection fees are considerably lower than those in surrounding states and don't generate enough money to pay for the inspection program.
He said a friend who is a restaurant owner told him that "y'all really ought to increase your fees. They are very, very low."
The annual food service fee is $250 in Oklahoma; either $210 or $360 in Tennessee depending on the number of customers; $258, $515 or $773 in Texas depending on gross sales; $100, $150 or $200 in Mississippi depending on the risk level; and $100 in Louisiana, according to department records.
Ann Purvis, the department's deputy director for administration, said the department can inspect a food service permit holder up to three times a year depending on the volume and type of food produced. The department conducts nearly 10,000 restaurant inspections a year, she said.
The food inspection program costs nearly $3.2 million in state general revenue a year, Brech said after the meeting.
Purvis said the number of restaurants is increasing and "we need to have the staff in place in order to do those inspections. It is a very involved inspection, where you actually [use] thermometers and test the temperature of food and all those kind of things."
But state Rep. Terry Rice, R-Waldron, told his colleagues that Arkansas is known for overregulating industry and that affects "the overall business climate in Arkansas."
Raising food service fees would increase the burden on businesses, he said.
Food establishments aren't the only ones facing potential fee increases.
The Health Department also is proposing raising certain license fees for hospitals.
It wants to raise the annual per-bed fee for hospitals from $6 to $15, the annual fee for an abortion facility from $500 to $1,000, the annual home health service agency fee from $1,000 to $1,500, and the annual plan review and hospital construction fee from $500 to $1,500, according to department records.
The hospital licensing fee increases would raise about $250,000 more a year for the department, officials estimated.
Smith, the department director, said the agency's hospital licensing fees are much lower than those in surrounding states and they are not sustaining the program. "The problem, is if we can't do due diligence in our hospital licensing program, then it can compromise the care of Arkansans."
The Legislative Council and the Joint Budget Committee approved a motion by state Rep. Mark McElroy, D-Tillar, to draft an appropriation measure for the department for the fiscal year starting July 1 based on Democratic Gov. Mike Beebe's recommendation for $84.8 million general revenue, down from $85.3 million in fiscal 2015. The Legislature will decide state funding for the department in the session starting Jan. 12.
McElory said he doesn't want the proposed fee increases included in the proposed budget for the department.
Afterward, he said the department's proposed fee increase for food service permits is "a little bit excessive.
"Restaurants are trying to make a living like everybody else, and it's going to hurt business," McElory said, adding he could live with a 10 percent or 20 percent increase in the annual food service permit fee.
Metro on 10/31/2014