Hotel-tax expansion gets nod

Tuolumne County officials will move forward on a proposal to expand a special tax on local lodging businesses and use the extra money to temporarily help fund Railtown 1897 State Historic Park and the Mother Lode Fairgrounds.

 The county Board of Supervisors on Tuesday unanimously voted to move forward on a process that will put an item on the ballot to expand the county’s Transient Occupancy Tax, a 10 percent tax on hotel and motel stays. Under the proposed expansion, RV parks, houseboats and privately run campgrounds would also fall under the occupancy tax, which is not currently the case.

The supervisors also showed unanimous support for using the estimated $350,000 in additional annual revenue to fund Railtown and the fairgrounds for at least the next three years to keep both organizations afloat as they face devastating funding cuts from the state.

“If nothing is done very soon … our county may face even greater impacts to the local economy and our tax revenues,” County Administrator Craig Pedro said.

Expanding the tax will require a majority vote from the public, and the board will vote at an upcoming meeting to officially place the proposal on the ballot for the June 5 primary election. Pedro said the expanded tax, if approved, would not go into place until October so local tourism businesses aren’t forced to adjust mid-season.

The expansion is not likely to include all lodging transactions eligible for the tax. During the board meeting, multiple members of the public implored supervisors to consider an exemption for local camps that serve physically impaired, disadvantaged and other youth and families.

Brian Robinson is director at the Whispering Pines conference and retreat center, which often hosts camps for disabled youth. Robinson said the center holds six weeks of camps for “differently-abled children,” a term he used instead of disabled, and he said a lot of those kids come from disadvantaged homes.

The camp recently hosted as many as 240 “differently-abled” kids during the summer, he said, but this year only 167 children could participate because of state cuts to programs that helped some attendees cover the cost.

“We are trying to keep our rates down,” Robinson said, something he added will be more difficult if the tax applies to camps like Whispering Pines.

Supervisors directed county staff to include some sort of exception in the ballot proposal.

About $200,000 of the funds raised by the additional tax will go toward Railtown, which is one of 70 state parks that could close in the summer as a result of $33 million in cuts to the state Department of Parks and Recreation. About $125,000 will go toward the Mother Lode Fairgrounds, which recently lost about $200,000 in state funds — about a third of the fair’s operating budget.

Pedro said those funds are meant to be base-line amounts, with the idea that both organizations will be able to team up with private foundations, non-profit organizations and other local entities to raise other funds. The proposal calls for funding the fair and Railtown for about three years as a temporary solution until state funds return or a permanent funding source can be found.
“This revenue source alone can’t get this done. We will need help from the community,” Pedro said.

Pedro also said the county will also likely form an advisory committee and work on agreements with the state to try and keep some commitment to keep at least minimal funding, staff and resources committed to the operations.

The occupancy tax currently raises about $2 million annually. That money goes toward public services like roads, law enforcement, fire, emergency services and recreation. The Tuolumne County Visitors Bureau receives 25 percent of the tax money as well to market tourism in the county.

Voters increased the tax from 8 to 10 percent in 2010. At the time, there was interest in including campgrounds, RV parks and houseboats but not enough time to broaden the application.

Though the majority of the public speakers at the meeting were in favor of the proposal, Marble Quarry RV Park owner Ralph Squire spoke against expanding the tax.

Squire, who is also involved in Friends of the Sierra Railroad, which supports efforts to fund Railtown, said about 50 percent of revenue for RV parks like his come from traveling clubs that regularly bring large groups of RV campers.

Those clubs, Squire said, will likely go elsewhere if an occupancy tax increases prices locally. And their members already pay “hefty” fees to register their RVs.

“They have many parks in many counties to choose from,” he said, reading a prepared statement. “RVers are big spenders and contribute more to sales tax revenue than the average motel occupant.”
In other action, the Board of Supervisors:
• Delayed a vote on Argonaut Estates, a proposed 18-lot development near Greenley and Cebezut roads. The proposal calls for subdividing 114 acres into lots between five and 10 acres large.

The board opted to delay the vote so county planning staff, representatives with the developer and nearby residents can continue to work out a final agreement.

• Temporarily reduced a fee charged to developments that don’t include affordable housing units. Currently, the fee is 10 percent of median sales price of a single-family residence. The proposal calls for lowering the fee to 25 percent of the current cost through 2016.

County planning officials are currently working on an incentive-based program to encourage affordable housing, which will eventually replace the in-lieu fee permanently.

• Approved two, two-year agreements with W.H. Breshears for fuel and lubricant delivery and card lock fueling for heavy vehicles for no more than $2.5 million total.

• Voted 3-2 to apply for a $220,680 state grant to help the county make changes to its general plan once the ongoing Regional Blueprint project is complete.