Santa Cruz County Supervisors Reflect on Hotel and Taxes on Single-Use Cups – Santa Cruz Sentinel
SANTA CRUZ — As the deadline to qualify an article for the June ballot approaches, the Santa Cruz County Board of Supervisors is expected to discuss two other possible measures Tuesday morning: an increase in the county’s hotel tax and a new tax on single-use cups.
Reports to the staff board indicate that polls conducted over the past year confirm that residents would support both proposals.
Hotels or houses
In November 2021, the county polled “likely voters” on a proposal to increase its transitional occupancy tax by 1% – from 11% to 12% – for traditional lodging establishments and by 3% – at 14% – for vacation rentals. About 74% approved of the idea.
Transient occupancy taxes are imposed by cities and counties on people receiving lodging facilities for 30 days or less, County Administrative Director Carlos Palacios explained in his report released this week. The tax has not increased since Measure N was passed in November 2012. Capitola and Watsonville have since increased their rates, bringing their charges to 12% after November 2018.
The distinction made between the two categories, which tourists use year-round to visit the unincorporated county, was made to honor the importance of the lodging industry to the region’s economy in addition existing variations in monitoring and fees between traditional hosting companies. and vacation rental properties. This includes, for example, development impact costs that commercial accommodation operators incur when building their businesses, unlike vacation rental properties.
If the majority of voters followed their polled peers, the tax would rise Jan. 1, 2023, and generate more than $2 million for the county base for the 2023-24 fiscal year, according to Palacios.
“Additional revenue would be treated as part of General Fund resources used to fund mandated programs and essential services that are not fully funded, such as public safety and public health operations,” he wrote. , referring to passages and attached charts that show General Caisse facing significant deficits.
The extra money would be particularly useful in a situation that Palacios said could be detrimental to the county: in the event of an emergency failure of facilities belonging to the jurisdiction. The county has been unable to fund a large majority of deferred maintenance and strategic investments in its infrastructure, he said earlier.
Palacios said he and his staff don’t anticipate any backlash for a hotel tax increase.
“Visitors are used to tax and fee surcharges when booking a stay at the rates offered, and rarely choose their destination based on tax rates. Thankfully, overnight stays in our area appear to be back to pre-pandemic levels,” he said, noting that the average daily room rate hit $217.30 from $188.60 previously.
From royalty to tax
The county and its contractors also surveyed residents in October 2021 about potential support for a 25-cent single-use cup levy. Of the 600 members surveyed, 66% support the idea, 28% oppose it and 6% say “undecided”. These responses were based on the stipulation that the proceeds would be used for environmental projects such as combating illegal dumping and preventing forest fires.
Several local business organizations, including chambers of commerce, were approached about the idea and posed questions and concerns to staff. Some have advised that the county dedicate resources to providing messaging about the charge and where the money would go if approved, particularly to business customers, staff updated supervisors in their report as the board said. asked in September 2021.
Palacios considered that the measure, which quietly came into effect on January 1, would generate approximately $700,000 each year if designated as a tax rather than an expense. County spokesman Jason Hoppin explained that due to technical difficulties with the extension process, the county entered in an effort to delay implementing the fee at the height of the pandemic, businesses were able to collect single-use cup fees for over a year. month.
“The cup fee has been put in place…even though the council intends to delay it further,” Hoppin told the Sentinel when asked why Starbucks locations in Santa Cruz County were adding a $25 fee. cents per plastic cup. “The new implementation date of July 1 was on the agenda (January 25), but the delay won’t technically come into effect until February 25.”
The measure, if on the June ballot, would pose a question to voters: Should 12.5 cents of the existing charge be collected as a tax? The remaining revenue would be retained by the seller of the cup, whether Starbucks or another seller.
If the council decides to call for a measure to increase the transitional occupancy tax or create the tax on single-use cups, consolidating the election with the existing June primary, a resolution calling for the election and an independent analysis should be submitted to County Clerk Tricia Webber by 5 p.m. on March 11 and 18, respectively. Staff recommended adopting the necessary measures for both taxes.
The quick turnaround needed to put a measure on the ballot at this point in the cycle has deterred members of the Santa Cruz County Regional Transportation Commission from adding theirs regarding future use of the Santa Cruz rail line. Branch earlier this month.