The Goleta City Council voted Tuesday night to put an ordinance on the November ballot proposing an increase in the transient occupancy tax from 10 to 12 percent.
Transient occupancy tax, or bed tax, is a fee that hotel guests pay to fund services such as public safety, redevelopment and road maintenance through the General Fund. Solvang and Carpinteria are at a 10 percent rate as well, and their city councils authorized the ballot measure. Santa Barbara County is also considering a similar tax measure to bump TOT to 12 percent, which would match the rate in Santa Barbara.
Beginning in July, Goleta won’t have to share bed tax with the county under the Revenue Neutrality Agreement, but it still will have to share 50 percent of property tax and 30 percent of sales tax revenue. A 2 percent increase would most likely generate about $900,000, according to the staff report.
Councilman Michael Bennett said the funding could bring back public safety employees who were cut because of economic constraints.
“In addition to that, we have shortfalls in our library,” he said. “We learned today that our library reserve funds are essentially zero. I would also like to assist our hotels to contribute to an outreach program offered by the Goleta Valley Chamber of Commerce, and I would like to see additional money go to creeks and roads.”
The revenue could also go to Old Town Goleta redevelopment since the redevelopment agencies were cut, he added.
“Given how tight we are on funds, even getting money back from the county, I support this as a way to enhance our revenues to do the things that many Goleta citizens probably want us to do,” Connell said.
Bacara Resort & Spa General Manager Kathleen Cochran said the city should wait until 2014 to increase TOT.
“Am I in favor of it now? No,” Cochran told Noozhawk in April. “I know there are new hotels coming into Goleta that are trying to build business. I would be in favor if it didn’t start until 2014. I would also want to know what they would do with the money. If it does pass, I would like some of it earmarked to come back to the community in terms of tourism and development of Goleta as a destination area.”