PACA budget outlook and fee increases

No one is happy with a fee increase, especially in "these economic times." Surely the industry won't be doing handstands about a likely pending increase of substantial proportions from the PACA. Unless I read the industry wrong, I would predict most will say the cost of the program is well worth it.

Current license fees are are $550 per year, and $200 each additional facility not to exceed $4,000. USDA officials say they need to plan for an increase in fees by fiscal year 2011 that will total close to $995 for the base license fee and a branch fee of $600 per branch, with an aggregate maximum of $8,000.

From the presentation about PACA fees and trust protection at the USDA Fruit and Vegetable Industry Advisory Committee. Find the link to all presentations at the meeting here.
About the chart below:

Notes:
1. The revenue assumption beginning in second quarter FY 2011 is based off 10,303 licensees with a base license fee of $995 and branch fee of $600 per branch with an aggregate maximum of $8000. There are currently an additional 4500 retailers that are only required to pay a one time administrative fee of $100 for which no annual revenue is collected.
2 The AMS Budget office suggests we reduce Investment Income by at least 2% for 2009, based on the current DOL Bureau of Labor Statistics Consumer Price Index. \

3. Beginning FY 2011 there will no longer be a PACA trust fund that is set aside strictly for investment purposes until called upon to make up for the yearly shortfall Revenue collected will be used to pay operating costs that average to $1 million shortfall. monthly close million.
license and/or complaint fees require a change to the
4. By the end of FY 2010, the reserve balance is projected to fall below the 25% benchmark which, by statute, is the earliest point at which a license fee increase may occur. Operating reserves will be exhausted by January, 2011. In absence of a fee increase, the process to commence with a reduction in the level of services would begin by the end of FY 2010.
5. Given assumptions listed above hold, PACA Branch would begin the process for the next fee increase to take effect sometime during FY 2015.