Council to Ask Voters to Increase Hotel ‘Bed’ Tax

By Juliet McShannon
Staff Writer

August 5 - Visitors might be paying more to stay overnight in Santa Monica next year.

The City Council unanimously voted Tuesday to put a measure on the November ballot to increase the Transient Occupancy Tax (TOT) -- also known as the hotel “bed tax” -- from 12 percent to 14 percent.

The tax increase requires the approval of a simple majority of voters.

Susan McCarthy, city manager, told the council the tax increase is necessary to assure the retention of city services, and that it would bring Santa Monica in line with the nearby cities of Beverly Hills and Los Angeles.

“The current Santa Monica tax rate is lower than that of neighboring communities and it is important to remind Santa Monicans that it will be paid by hotel guests and not the residents here,” McCarthy said.

McCarthy further stressed the importance of the increase in boosting the city’s coffers in order to prevent further cuts in current services.

“The tax increase will mean $1.6 million in additional revenue to the general fund this fiscal year and $3.5 million for the next full fiscal year,” McCarthy said. “This is essential to achieving a balanced budget without further service and staff reductions to general fund operations including police, fire, libraries and after school programs.”

The TOT -- which is locally imposed and therefore cannot be “taken” by the State of California to shore up its budget -- would essentially add about $4 to the average hotel room rate per night.

Hoteliers in the city are apparently not opposed to the tax increase.

Klaus Mennekes, vice president of the Edward Thomas Management Company, which operates the beachfront Shutters and Casa Del Mar hotels in Santa Monica, said he supports the tax increase.

“We haven’t had much time to get all the details, but if the money from this increase in revenue will be used for services that will benefit the entire community, then we support the initiative,” Mennekes said.

Council member Mike Feinstein welcomed the measure as a means of “taking advantage of what’s already here.”

“This is something that takes advantage of our existing investments in the tourism industry and our already existing natural resources,” he said.

Mayor Richard Bloom applauded the support from all Council members for putting the measure on the November ballot but warned against complacency in expecting the measure to sail through.

“No easy passage is guaranteed in an already overcrowded ballot,” Bloom warned. “This is an issue that everyone that cares about our community needs to get behind. The things that make this town special cost money. We need to enlist the energy of the community and the volunteers in the community to get behind this.”

The Council also devoted time to commenting on the Santa Monica College Board’s recent decision not to put a $175 million “partnership” bond measure on the November ballot.

The college board will reconsider the decision at a special meeting Friday morning. (See “College to Reconsider Reduced Partnership Bond Friday.”)

On Tuesday, Bloom said he was pleased that the “partnership” proposal had opened the doors to “dialogue” among the jurisdictions, a sentiment echoed by other council members.

“Important dialogue has now developed and lots of issues have been broached. It is my hope that we can continue to look for opportunities where the school district, City and college can continue to co-operate and form partnerships,” Bloom said.

“Having opened the door we need to keep it open, walk through it with our hands out, shaking hands to see whether we can’t create a partnership for 2006,” said Mayor Pro Tem Kevin McKeown.

“We need to stay on the course that we set out here and that is thinking of our three overlapping jurisdictions as being one community,” McKeown added.

However, after learning of the reconsideration, Bloom accused the college board of “very bad government practice” by placing the item on the agenda with short notice.

Friday is the deadline for the college board to act to place the measure on the ballot.