The difference between the current Transient Occupancy Tax of 10 percent and increasing it to 12.5 percent is enough to bring almost $2 million extra to Santa Barbara County’s general fund.
On April 22, the Santa Barbara County Board of Supervisors opted to put that tax increase on the Novemeber 2014 ballot. The tax is aimed at tourists and tacks a little extra onto hotel room bills in the unincorporated areas of the county. The vote went 4-1, with 4th District Supervisor Peter Adam dissenting because the other supervisors wouldn’t specify exactly what that extra revenue would be spent on.
“Don’t just tell them we want more money,” Adam said during the hearing. “If it was up to me, I would propose a special tax and make a commitment.”
Adam wanted the board to earmark the extra tax dollars for economic development, something several people argued for during the public comment portion of the hearing.
Lawnae Hunter of the Economic Alliance of Northern Santa Barbara County and Joe Armendariaz of the Santa Barbara County Taxpayers Association said North County’s economy could especially benefit from an investment in economic development. While the county’s unemployment rate was 6.7 percent in March 2014, Lompoc came in at 11.9 percent, Guadalupe’s unemployment rate was 11.6 percent, and Santa Maria’s was 10.6 percent.
Although the rest of the supervisors agreed with Adam—it’s better to make a commitment—they were reluctant to specify for ballot purposes. Fifth District Supervisor Steve Lavagnino said it would be more challenging to get a specialty tax to pass than it would be to pass a general tax. Whereas passing a general tax requires a simple majority of voters, 50 percent plus one, passing a specialty tax would require a two-thirds majority.
“You go to two-thirds and, all of a sudden, we have a campaign,” Lavagnino said during the hearing. “I don’t want to put this on the ballot and then have it fail and lose all that money.”
Increasing the tax to 12.5 percent would put the Transient Occupancy Tax in the unicorporated areas of the county above the 12 percent that cities such as Solvang and Santa Barbara currently charge hotel guests.
The 4-1 vote on April 22 doesn’t secure the tax’s place on November’s ballot. A second reading of the ordinance will come before the board on May 6. Lavagnino and 1st District supervisor Salud Carbajal were appointed to draft an argument in favor of the tax rate increase, which needs to come before the board for consideration before July 23.
This article appears in May 1-8, 2014.