October 30th, 2016

Thinking Beyond Election Day

Hotel Tax Increase Will Remain Topic of Discussion Post November 8

With election day a little more than a week away, the consensus among local pundits is that neither stadium related ballot measures C or D will gain anywhere near the 66.7 percent required for passage.

Less certain is the possibility that one of the two initiatives might break the 50 percent mark, pushing resolution on the question of whether approval of two-thirds or a simple majority of voters is required to the California Supreme Court, which is expected to review a legally relevant case stemming from an appeal by the city of Upland.


Measure C proponents Fred Maas and John Spanos

Regardless, one thing is certain: talk of an increase in the city’s Transient Occupancy Tax (TOT) will remain front and center beyond election day.

Should measure C, in particular, fall short of the 50 percent mark, drawing the Chargers and city back to the bargaining table, TOT will no doubt be part of the financing mix in ongoing stadium discussions, irrelevant of site.

Throughout the stadium debate, opponents of measure C — including the visitor industry — have argued that there are needs and priorities in the community far more important and worthy of increased TOT revenues than a stadium project. That talking point has not gone unheard in the broader community as advocates for a variety of interests from the homeless to Balboa Park and the arts have seized on the argument to focus attention on getting a piece of any future bump in the hotel tax.

Ricardo Flores

Council candidate Ricardo Flores

Similar talks have been quietly making the rounds among council members at City Hall, and not so quietly among council candidates on the campaign trail. District 9 city council hopeful Ricardo Flores, for example, would ask voters to raise hotel taxes with new revenue going toward housing, street and sidewalk repairs, new streetlights and increasing police pay. “We’re not talking about not raising (hotel) taxes, we’re talking about where we want them to go,” Flores recently told the Voice of San Diego.

Flores, who is the favorite of the local business community — including many in the tourism sector — and enjoys the support of both Mayor Kevin Faulconer and the San Diego Regional Chamber of Commerce, is not alone in his assertion. But, he is just one among a very few who are inclined to publicly articulate the sentiment. In fact, his willingness to do so was cited as one of the many reasons the editorial board of the San Diego Union-Tribune recently chose to endorse Flores’ candidacy, saying his TOT recommendation “…shows Flores would suggest alternatives to ideas he criticizes, something for voters to value.”

Of course, from a hospitality sector perspective, securing a contiguous expansion of the San Diego Convention Center, ensuring an adequate flow of marketing dollars, and maintaining a competitive hotel tax rate will remain the visitor industry’s top priorities in any discussion on a future increase in the TOT — as well they should.

With all the competing demands on the city’s bed tax, deft and proactive leadership on the part of San Diego’s tourism industry will be required to effectively safeguard its priorities while at the same time giving thoughtful consideration to broader community interests.

San Diego, its treasured visitor industry, and the tourism sector’s many stakeholders deserve no less.

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