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Thursday, Mar 28, 2024
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Find Consensus for Hotel Tax Plan

Find Consensus for Hotel Tax Plan

It’s apparent that government officials and most travel-industry executives agree it’s time to raise the tax on San Diego hotel rooms from 10.5 percent to 13 percent.

What is in question, however, is how to administer that money.

There’s a good chance San Diego voters will be faced with a measure seeking a 2.5 percent increase in the city’s transient occupancy tax, should the City Council muster enough votes later this month to put the measure on the March 2004 ballot. The measure must get a two-thirds vote for passage, thereby designating specific uses for about half the money raised by the hotel tax.

Funds would be earmarked for a variety of things, from marketing the city as a tourist destination, to police and fire protection, to cleaning up beaches, instead of leaving it completely in the hands of the City Council.

Most agree that such causes are crucial to the city’s future prosperity. Tourism ranks as the city’s third-largest economic driver, and funding the promotion of San Diego as a world-class destination is vital to the industry’s health.

Additional funding for fire and police obviously makes San Diego a safer place to live and visit. Keeping our beaches clean, as well as adequately funding cultural organizations are causes we all can rally around.

The hotel tax currently generates $110 million a year, and the proposed 2.5 percent increase would add about $26 million to the pot. All that money currently goes to the general fund revenue, allowing the city to address fiscal needs as they see fit. Designating specific amounts for agencies and organizations hampers the city’s ability to readjust its spending priorities should an emergency arise.

The San Diego Convention & Visitors Bureau would get $2.50 for every $13 collected; police and firefighters would be guaranteed a total of $1.75, while arts and culture organizations would receive $1. Ultimately, the city would be left with $6.50 of every $13 collected.

These agencies and organizations are vital to maintaining the city’s economic health. All must be adequately funded, even when economic times get tough.

ConVis, in particular, showed this past summer what a key role it plays in drawing visitors to San Diego, as the region’s hotel-occupancy rate topped the nation for six straight weeks.

Yet, holding to designated amounts for each agency or organization binds the city’s hands should an economic crisis arise. With the state bleeding from a $38 billion budget deficit, it turned to local agencies to help patch its holes. San Diego took a big hit this past year and had to make tough choices as to how to solve its own $27 million deficit.

Local leaders had the leeway to fall back on the hotel-room taxes to solve part of the deficit this time around.

Because this measure would require a two-thirds vote of the public, it will need a broad consensus to pass. Currently, Mayor Dick Murphy is unhappy with the guaranteed funding, while influential hotelier Doug Manchester disagrees with the tax increase altogether.

The organizations and agencies relying on city funding need to trust the City Council will make prudent decisions when it comes time for funding. San Diego is not a city that willingly approves tax increases to begin with, and until all sides are able to reach a consensus they all can back, this measure has little chance at voter approval.

, Rick Bell

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