Santa Barbara County – and several cities – will be asking voters to increase the hotel tax rate this November.
The county Board of Supervisors voted Tuesday to place a transient occupancy tax rate increase on the Nov. 5 ballot, to 14% from 12%. TOT is levied on visitors staying at hotels, motels and short-term vacation rentals.
The supervisors want to boost revenues and already decided not to put a sales tax increase before voters this year. Polling came back indicating people wouldn’t support it.
The increased TOT rate would affect 24 hotels/lodging institutions in unincorporated areas, and about 520 short-term vacation rentals.
The cities of Buellton, Carpinteria and Solvang are also talking about TOT increases for the November ballot, County Executive Office staff said.
Industry Opposition
The Santa Barbara South Coast Chamber of Commerce, Visit Santa Barbara, Visit Santa Ynez, and members of the hotel industry sent letters and comments to the Board of Supervisors opposing the increase.
They’re concerned about “significant unsold capacity,” and said the area has a 30% annual vacancy rate.
Higher TOT rates could push even more people toward short-term rentals, they said.
“The 14% TOT would be the highest on the Central Coast and the second-least competitive tax rate among similar leisure destinations,” said Kathy Janega-Dykes of Visit Santa Barbara.
The chamber solicited signatures for a letter to the county opposing the TOT increase, and CEO & President Kristen Miller spoke at Tuesday’s meeting.
She asked the county to slow down and do an economic impact study about the increase.
“We’re so concerned that you may not even get the revenue you’re looking for because if it suppresses the customer counts, this may work against us,” she said.
Ballot Measure
The supervisors voted 4-1 to move forward with the TOT increase ballot measure, with Bob Nelson opposed.
“I want to continue to invest in this community to make it the place that people want to be drawn to, and unfortunately that costs money,” Supervisor Steve Lavagnino said.
Supervisor Joan Hartmann said collecting unpaid fees from short-term rentals can also increase revenues. The county and city of Santa Barbara are currently working on enforcement efforts.
There are a lot of operators in the Santa Ynez Valley who are not collecting or reporting TOT to the county, she said.
“We must do better on that as well, and not let money that should be on the table be hidden underneath it,” she added.
A TOT increase to 14% would require majority approval by county voters. Santa Barbara County voters increased the rate from 10% to 12% in 2016.
