County looks at hotel tax increase

Five years after an increased tax on hotel and motel lodgings was defeated for the third consecutive time by Calaveras County voters, it once again is on the minds of county officials.

Exploring raising the tax — officially called the transient occupancy tax, or TOT — from 6 percent to 10 percent was one of the staff-suggested tasks included in a draft county strategic plan given a tentative blessing Tuesday by the Board of Supervisors.
 

 The tax is charged on the rate paid per night for a room. For example, a one-night stay at a $100 room would be taxed $6 under a 6 percent tax and $10 under a 10 percent tax.

Supporters of the TOT include a majority of county supervisors, the Chamber of Commerce and the Calaveras Visitor’s Bureau. They argue that the tax will support needed promotion of the county and has been shown not to discourage visitors.

But critics say increasing it would do just that. Plus, some lodging owners say increasing the tax now would just be a kick in the ribs when the economy already has them down. Others, like Supervisor Tom Tryon and the Calaveras Taxpayers Association, oppose the tax on deep-rooted philosophical grounds.

While the idea is just one of a score of tasks laid out in the plan for county staff to pursue, its inclusion comes as local governments across the state are turning to the TOT to boost revenue.

Elections on Nov. 3 saw residents in at least nine    cities raise or institute TOTs, according to a report by the California Local Government Finance Almanac, compiled by Coleman Advisory Service.

Six cities raised it to 12 percent and none set it at less than 10 percent.

Those levels — much higher than Calaveras County’s 6 percent rate — are also typical of surrounding cities and counties.

Alpine, El Dorado and Mariposa counties all set their rate at 10 percent, while Stanislaus and Tuolumne have theirs at 8 percent — and the latter is looking to increase it to 9 percent.

Perhaps the only nearby county with a 6 percent rate is Amador. But that county is also looking at increasing it to 10 percent, as three of its cities — Jackson, Ione and Sutter Creek — recently did, according to Jaqueline Lucido, executive director of the Chamber of Commerce and Visitors Bureau.

There is one area of Calaveras County where tourists are already being charged 10 percent: Angels Camp.

A 4 percent increase was approved by 80 percent of city voters in 2003. The tax hike brought the city’s TOT take to $772,000 in 2007, roughly double the county’s take, according to a white paper on the TOT prepared by the Calaveras County Chamber of Commerce. Melisa Ralston, Angels Camp finance director, could not be reached for more recent data.

Greg Johnson, day manager at the Gold Country Inn, who has been working in city lodging establishments since before the increase, said he has gotten an occasional complaint about the tax, but that is the exception.

“Most people don’t have a problem with it,” he said. “Ten percent seems fair.”

But in Mokelumne Hill, Hotel Leger co-owner Jane Canty said any raise would be too much right now.

“Everyone is having a hard financial time right now,” she said. “If they raise the tax on us, it’s just going to hurt us that much more.” 

To Supervisor Tom Tryon, whose district includes Angels Camp and who has written the ballot argument against the TOT for the last three elections, the tax is “morally offensive.”    

“It’s a tax on movement,” he said. “If you don’t stay in your home, the government is going to tax you.”

A 10 percent TOT in Calaveras County would have raised $92,000 more this past quarter, according to Lynette Norfolk, treasurer-tax collector.

However, that quarter has historically seen the highest collections, so other periods would see substantially lower increases, she wrote in an e-mail.

Money from the TOT is split three ways. One third goes to the visitors bureau, one third goes to Public Works for road maintenance and one third goes to the county’s general fund.

Darryl Slocum, president of the Calaveras Visitor’s Bureau Board of Directors, said that increasing the bureau’s funds would bring in more tourists.

“We’re doing the best we can with the budget we have right now,” he said. “But there’s much more we could do if we had more money.”

He thinks the key to passing it is education. People saw the word “tax” and were automatically against it, not knowing that it is predominantly levied on tourists, not locals, he said.

Laurel Berent-Bumb, chief executive officer of the El Dorado County Chamber of Commerce, says changing the name from transient occupancy tax to hotel-motel tax was key in getting an increase to 10 percent passed in her county in 2004.

“I swear to you, I got a phone call saying: How can you tax the homeless?” she said.

Al Segalla, president of the Taxpayers Association, agrees there’s a problem with the marketing of the tax. But it’s not its name he has a problem with. It’s how it’s publicized.

“They should be advertising ‘we tax our visitors less,’” he said. “This is a selling point.”