Impartial Analysis of Measure B
JASON M. HEATH, COUNTY COUNSEL
By: Ruby Márquez, Chief Assistant County Counsel
Under the California Constitution and other related state laws, local governments may levy a general tax if submitted and approved by at least a majority of voters within its boundaries.
The Board of Supervisors (“the Board”) of Santa Cruz County (“the County”) has placed Measure B on the ballot to ask the County’s voters to approve an increase to the Transient Occupancy Tax (“TOT”).
Currently, a Transient Occupancy Tax is charged at the rate of eleven (11%) percent when a visitor pays to stay in a hotel, motel, inn, tourist home or house, vacation rental or other lodging within the unincorporated areas of the County for a period of less than 30 days.
If approved by the majority of voters, Measure B would result in two changes to the Transient Occupancy Tax. First, the tax would increase from eleven percent (11%) to twelve percent (12%) for occupancy in hotels, motels, inns, and other related commercial lodging facilities. Secondly, the tax would increase from eleven percent (11%) to fourteen percent (14%) for occupancy in vacation rental properties.
This measure distinguishes between traditional commercial lodging properties and vacation rental properties on the grounds that vacation rental properties require greater regulatory oversight, impact residential neighborhoods and other areas not typically subject to the impacts of commercial businesses, and avoid development impact fees and permit costs usually required of commercial lodging properties.
If approved, the Board has determined the revenue raised from Measure B would be used for general governmental purposes. This includes, but is not limited to, essential services such as wildfire prevention, emergency response and recovery, street repairs, public and mental health services, homelessness programs, and affordable housing. It is estimated that approximately $2.3 million would be added annually to the County’s General Fund through this tax increase.
If approved, the change in the tax rate would take effect on January 1, 2023. The new tax rates would continue until changed or repealed by a majority of voters in the County.
A “yes” vote on Measure B is a vote to approve raising the Transient Occupancy Tax from eleven percent (11%) to twelve percent (12%) for hotels, motels, inns, and other related commercial lodging facilities, and from eleven percent (11%) to fourteen percent (14%) for vacation rental properties.
A “no” vote on Measure B is a vote against raising the tax and a vote to keep the Transient Occupancy Tax at the current rate of eleven percent (11%) for all types of lodging subject to the Transient Occupancy Tax.