Looking for ways to boost revenue, Santa Barbara County leaders want to raise the transient occupancy tax rate from 10 to 12 percent, which would match most of the incorporated cities.
County hotels, vacation rentals and other short-term occupancy establishments have been taxed at 10 percent since 1990, according to the Auditor-Controller’s office.
The take for the 2012-13 year was $6.7 million, which is expected to increase substantially every year. By comparison, incorporated cities received $33 million from TOT last year.
A higher TOT, or bed tax, rate would impact the unincorporated areas, such as Montecito, Summerland, parts of the Goleta Valley, Santa Ynez and other areas throughout the county. Santa Barbara County received a portion of Goleta’s bed tax for 10 years after the city incorporated, but the last payment of $1.45 million was made in 2012.
To put the tax increase on November’s ballot, at least four members of the Board of Supervisors must support the measure. They will hold a public hearing April 22 to hear from residents and businesses.
Fifth District Supervisor Steve Lavagnino proposed doing this in 2012, when four cities raised their rates, but couldn't get enough support from other board members. One of the no votes, former supervisor Joni Gray, is gone from the board now. Voters did approve keeping the rate at 10 percent, instead of letting it drop to 8 percent, in the June 2010 election.
If the tax rate goes to 12 percent, the county expects $740,000 more in TOT next year and $1.5 million more the following year, according to Auditor-Controller Bob Geis.
The county can’t disclose how much bed tax an individual hotel generates, because that would reveal its room sales to competitors, Geis said. However, it’s obvious from the tax reports that the majority of the unincorporated money is coming from two Ty Warner properties in Montecito: the Four Seasons Resort The Biltmore Santa Barbara and San Ysidro Ranch.
“TOT for the county’s unincorporated area is all driven by the Biltmore,” Geis said.
The total room sales from Montecito establishments make up 12 percent of the countywide total and more than 60 percent of all room sales in unincorporated areas, with $42.2 million last year.
In addition to the luxury hotels, the places subject to bed tax in Montecito are summer programs for Westmont College and Pacifica Graduate Institute. Student housing doesn’t count as transient occupancy, but housing for short-term, non-student summer programs and camps do, Geis said.
Increasing the bed tax would also impact hotels and vacation rentals in Summerland, Santa Ynez, the unincorporated Goleta Valley, Los Alamos and a few unincorporated areas throughout the county.
Owners have to pay bed taxes to the county’s Treasurer-Tax Collector on a monthly basis. If the increase goes on the Nov. 4 ballot and voters approve it, the 12 percent rate would go into effect in January 2015.
Santa Barbara, Goleta, Carpinteria, Solvang and Buellton all recently raised their rates to 12 percent, while Santa Maria and Lompoc are at 10 percent, like the county, and Guadalupe is at 6 percent.
The Board of Supervisors is expected to schedule a public hearing for April 22. At least four members have to support the measure to get it on the ballot, and a majority of voters have to approve it. Since the measure could be consolidated with the general election, it would cost $40,000 to $60,000 to put on the ballot, according to the county.
If the county wants to earmark the tax money for a specific purpose, the measure has to get a two-thirds voter approval rate.
The board’s next regular meeting is scheduled to start at 9 a.m. Tuesday at the County Administration Building, 105 E. Anapamu St. in Santa Barbara.