July 3, 2012 — BOARD OF SUPERVISORS

Meeting Summary

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Staff presented a proposal to increase the county TOT from 10% to 12% for the November 2012 election, estimating an additional $1.1 million to $1.5 million in revenue.
Public commenters expressed mixed views, with some opposing the measure due to potential tourism impacts and others supporting it if revenue is earmarked for tourism marketing.
Supervisors debated the timing of the measure, voter fatigue, and economic effects on the local tourism industry.
The Board took no action on the item as no motion was made to adopt the ordinance or place the measure on the ballot.

The Board of Supervisors convened a hearing to consider recommendations regarding a transient occupancy tax (TOT) ballot measure. A representative from the County Executive Office presented the proposal to increase the county’s TOT from 10% to 12% for the November 6, 2012, general election. The presentation noted that the current 10% rate generates approximately $7 million, while the proposed 12% rate is estimated to generate an additional $1.1 million to $1.5 million. The measure would apply only to hotels and short-term accommodations in unincorporated areas of the county, though the vote would be countywide. The presenter clarified that the measure would become effective upon certification of the election, approximately 30 days after the election date.
Questions were raised regarding the potential for voter fatigue due to other tax measures on the ballot, including school district bonds and taxes in incorporated cities. Staff confirmed that four other school district measures were pending. Questions were also raised regarding the notification process for affected businesses, to which staff responded that specific mechanics would be provided for the second reading.

Five members of the public addressed the Board:
One speaker opposed the measure, citing a lack of prior discussion, no study of long-range implications, and the absence of negotiations with employee unions for concessions.
One speaker, representing a vacation rental business, opposed the increase, arguing it could deter tourism and that the current lower rate serves as a competitive advantage over surrounding incorporated areas.
One speaker, representing the Santa Barbara Conference and Visitors Bureau, supported the increase but requested that a portion of the revenue be dedicated to tourism marketing.
One speaker, representing the Santa Barbara County Taxpayers Association, opposed the measure, citing voter fatigue and the potential negative impact on the hotel industry’s gross operations.
One speaker, representing the Santa Ynez Valley Hotel Association, stated that the association’s board voted to support the increase, provided it was earmarked for tourism promotion.

Supervisors discussed the timing of the measure, the potential for voter fatigue, and the economic impact on the tourism industry.
One Supervisor supported the measure, arguing that delaying it to 2014 or 2016 would result in lost revenue and that the current rate is lower than many other tourist destinations.
One Supervisor expressed opposition, citing concerns about the impact on tour bus and convention bookings in North County and the lack of time for comprehensive analysis.
One Supervisor leaned toward not moving forward, citing concerns about rushing the process and the potential perception of double taxation for residents of incorporated cities.
One Supervisor supported the measure, noting that the City of Santa Barbara has maintained a 12% rate without apparent harm to its tourism industry and that the county needs the additional revenue.
One Supervisor stated they would not make a motion to move the item forward, believing there was no point in proceeding given the current circumstances.

No motion was made to adopt the ordinance or place the measure on the ballot. The County Counsel noted that the lack of a motion constituted no action taken on the item. The Board took no action on the item.