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Proposed Increase in County’s Bed-Tax Rate Won’t Go to Voters in November

Plan put forth by Supervisor Steve Lavagnino fails to garner enough support from the rest of the board to move forward

Although four cities want to increase their transient-occupancy tax rates, the Santa Barbara County Board of Supervisors probably won’t pursue the same anytime soon.

The TOT, or bed tax, charges a percentage of hotel room and vacation rental prices that goes to local governments. The City of Santa Barbara has a 12 percent rate, while the county and other cities have a 10 percent rate.

If the county’s unincorporated areas increased to 12 percent from 10 percent, the county would receive another $1.1 million to $1.5 million on top of the $7 million it receives from those annual bed-tax revenues now, according to Dennis Bozanich, assistant to the county executive officer.

Buellton, Carpinteria, Goleta and Solvang all have November ballot initiatives to increase their TOT rates. The county won’t be joining that effort since there wasn’t enough support to move forward with the proposal brought forward by 5th District Supervisor Steve Lavagnino. No action was taken at Tuesday’s special meeting.

Lavagnino said it makes no sense for the county to have two sets of rules and different rates. The region has lower rates than other visitor destinations, and he said the county’s next chance to realistically put it on the ballot would be 2016.

Third District Supervisor Doreen Farr also supported the proposal, saying the county clearly needs the extra revenue and that the tax clearly doesn’t target the same people as other local taxes on November’s ballot.

“Voter fatigue is a concern, but anyone who takes time to read the ballot measures thinks about who is paying,” she said. “I don’t want to harm school district success but see this as a different category.”

Supervisors Janet Wolf and Joni Gray opposed the proposal, saying there wasn’t enough research and it wasn’t the right time.

Kathy Janega-Dykes, president of the Santa Barbara Conference & Visitors Bureau, addresses the Board of Supervisors on Tuesday. She said any new revenues should be reinvested in promoting tourism. (Giana Magnoli / Noozhawk photo)
Kathy Janega-Dykes, president of the Santa Barbara Conference & Visitors Bureau, addresses the Board of Supervisors on Tuesday. She said any new revenues should be reinvested in promoting tourism. (Giana Magnoli / Noozhawk photo)

“We don’t want to put another measure on that would cause school bonds to get lost,” Gray said.

Most speakers on Tuesday argued against the proposal, saying it was sudden and not researched enough.

Kathy Janega-Dykes, president of the Santa Barbara Conference & Visitors Bureau, said she supported the proposal but that new revenues should be reinvested in promoting the area to visitors — a sentiment shared by every other speaker.

If money was specifically allocated to promote tourism, the measure would need a two-thirds majority to pass, putting it at a much higher threshold.

Santa Barbara County Taxpayers Association executive director Joe Armendariz said the county should wait to see the results of the municipal votes before proposing a ballot measure for the unincorporated areas of the county. He added that hotel operators would be likely “eat the tax” so prices don’t increase, which would put more money in county coffers than into the economy.

“I’m not sure the tourist economy can support this increase as you might expect,” said George Thompson, who owns a vacation rental in the unincorporated county. “People come here and have the means to spend the money in Santa Barbara, but this can be a deterrent for their coming here.”

He said he uses his rental property’s location in the unincorporated county as a selling point, since rates are lower than the neighboring jurisdictions.

The Board of Supervisors’ next meeting is scheduled for Tuesday.

Noozhawk staff writers Giana Magnoli and Amanda Garcia can be reached at .(JavaScript must be enabled to view this email address) and .(JavaScript must be enabled to view this email address), respectively. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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