HomeMy WebLinkAboutProposed Ballot Measure to Increase Transient Occupancy TaxTo: Honorable Mayor and City Council Members
From: Connie Boardman, City Council Member eA-
®ate: July 10, 2012
Subject. CITY COUNCIL MEMBER ITEM FOR JULY 16, 2012, CITY
COUNCIL MEETING - BALLOT MEASURE TO INCREASE
TRANSIENT OCCUPANCY TAX
STATEMENT OF ISSUE:
The proposed charter amendment relating to the levy of the retirement property tax will
be on the November ballot, and if it passes the city will lose $4.2 million dollars in
annual revenue. To help replace this source of revenue, I propose the city council place
on the ballot a measure that would increase our Transient Occupancy Tax by 2.5%.
The City Manager prepared a document outlining the cuts that would be immediately
enacted if the charter amendment passes. These cuts would eliminate the CSI program
in the Police Department, result in the loss of six sworn positions, eliminate our Urban
Search and Rescue Program, the CERT program, the Fire Department's Hazmat
response, and result in the closure of at least two branch libraries, the closing of the Art
Center and the curtailing of hours at our Central Library.
Currently our Transient Occupancy Tax is at 10% and generates about $7 million
dollars for the City's general fund. While this 2.5% increase would not make up for the
loss of $4.2 million, it could generate as much as $1.75 million dollars in additional
revenue for the city. Additionally, the Hotel/Motel BID self -assesses 2% of gross room
rental revenue to fund tourism marketing, which is common in the industry. See
comparison with other Southern California destination cities:
City TOT Toudsml Total
Marketing
Anaheim 15% 0.5-2.5% 15.5%-17.5%
Los Angeles 14% 1.5% 15.5%
Santa Monica 14% - 14%
Palm Springs 12.7% 2% 14.7%
Huntington Beach - Proposed 12.5% 2% 14.5%
Pasadena 12.1 % 2.89% 14.99%
Long Beach 12% 3% 15%
Buena Park 12% - 12%
Redondo Beach 12% - 12%
CITY COUNCIL MEMBER ITEM FOR JULY 16, 2012, CITY COUNCIL MEETING — BALLOT MEASURE TO
INCREASE TRANSIENT OCCUPANCY TAX
Page 2
July 10, 2012
San Diego
10.5%
2%
12.5%
Huntington Beach . Current
10%
2%
12%
Laguna Beach
10%
2%
12%
Newport Beach
10%
2%
12%
Dana Point
10%
$3/night
10%
Manhattan Beach
10%
-
10%
Since these cuts would occur as soon as the measure passes, if it does, I could not wait
to see if it passes before bringing this proposal to the council. I would like the City
Council to place this increase on the ballot and let our residents decide whether or not
to increase the tax our visitors pay to help fund vital police and fire services, and to help
keep our libraries and Art Center open.
Direct staff to prepare necessary documentation to place the item to increase Transient
Occupancy Tax from 10% to 12.5% on the November 2012 municipal election ballot.
xc: Fred Wilson, City Manager
Paul Emery, Deputy City Manager
Bob Hall, Deputy City Manager
Jennifer McGrath, City Attorney
Joan Flynn, City Clerk