Is there a limit to how high we can raise taxes, even on tourists?
Every four years, it seems like local municipalities devise a way to increase sales tax or transient occupancy tax (TOT). Boy, public safety sure could use a boost, or the roads sure could use an influx of funding, or it’s not really coming out of residents’ wallets so what’s the big deal?
It sounds like a good idea, right? Charge the tourists. They’ll pay it.
Four Santa Barbara County supervisors don’t think it’s a bad idea to raise the county’s bed tax by another 2 percent, which would bring it to 14 percent! That’s a lot. Carpinteria wants its TOT to weigh in at 15 percent, so why stop at 2 percent? Just raise it by 4! Set the bar high so others can reach for it too, as they inevitably will.
It’s already $80 for a weeknight stay at a Motel 6 in Santa Maria and double or more to stay at Motel 6 in Santa Barbara—what’s another $15 to $25 on top of that (and in addition to sales tax) for those people who can barely afford to spend the night at a place that promises to leave the light on for you?
They won’t even notice.
Other municipalities look at what Santa Barbara County is doing and think, “Hey, they’re doing it! We should too!” And then they raise their TOT, which Santa Barbara County residents get to pay when they visit somewhere else. Not be a downer, but WTF is that? I don’t want to pay 15 percent extra on an already ridiculously high hotel price when I visit somewhere—I don’t care if the municipality needs “discretionary revenue” that it can spend on whatever. And I’m not crazy about TOT money not being earmarked for something specific—like roads or public safety.
But “it could be spent anywhere in the county, not just the unincorporated areas,” CEO Mona Miyasato told supervisors.
Oh goody! I bet the 24 hotels and 530 or so short-term rentals are simply thrilled that their customers are paying extra taxes so the money can be spent in incorporated cities that pay their own TOT. But, hey, at least supervisors need to send the tax increase to the ballot first. Voters will get to weigh in!
All it needs is a simple majority to pass and voters are sooo well-educated and smart when looking at everything on the ballot.
Someday, maybe TOT could be 30 percent. Just think of the revenue that would bring in! If an extra 2 percent generates almost $3 million, just imagine … Santa Barbara County would be rich!
But as 4th District Supervisor Bob Nelson pointed out, just because the tax is higher doesn’t mean it will generate more funding—a lesson the county should have already learned with its cannabis tax debacle.
“The message I’ve gotten from the business community is they are concerned, especially as the economy has gotten a little weaker,” he said. “The tourism industry, hotels that struggle to pay employees a living wage—at some point the cost, and total costs, there’s only so much the consumer can tolerate.”
He’s not wrong.
The canary never pays to stay. Send free rooms too canary@santamariasun.com.
This article appears in Jun 6-16, 2024.