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Hotel Workers Union Submits Bed Tax Initiative

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By Jorge Casuso

August 1, 2023 -- Unite HERE Local 11 submitted a ballot initiative to the City Clerk on Tuesday that would impose a 7 percent bed tax on Santa Monica hotels to create an affordable housing fund for hospitality workers.

The measure would raise the city's transient occupancy tax to 22 percent, far surpassing Palo Alto's 15.5 percent, making it the highest in California and likely the nation.

The initiative -- which comes two weeks after the union submitted a minimum wage measure for hotel workers -- would also impose a 15 percent tax on home-shares and vacation rentals, bringing the total tax to 32 percent.

The funds deposited into the housing fund "shall be used solely to promote, provide, and develop affordable housing and affordable housing measures and programs for hospitality workers," the initiative reads.

The measure would create a seven-member committee appointed by the City Council to recommend how the money would be spent and to set guidelines governing the fund.

"The initiative comes as it has become almost impossible for many of Santa Monica’s low-wage hospitality workers to even rent a home in the city where they work, let alone to buy a home," union officials wrote in a press release Tuesday.

"To cope, these workers are forced to commute long distances to their jobs, live in overcrowded conditions, and sleep in their cars between shifts. Some even experience periods of homelessness."

If the union gathers the approximately 7,000 valid voter signatures needed to qualify the measure, it would mark the second transient occupancy tax placed before Santa Monica voters in two years.

Last November, voters overwhelmingly approved Measure CS, which raised the so-called "bed tax" from 14 percent to 15 percent for hotels and to 17 percent for home-shares to help tackle the city's homeless problem.

The increase, which was the first since 2004, is expected to generate an estimated $4.1 million a year "to address community needs in the context of a slow and uncertain recovery" from the coronavirus shutdown.

The proposed measure was submitted two weeks after the union filed a ballot initiative requiring local hotels to pay their workers at least $30 per hour ("Hotel Union Submits Ballot Initiative for Country's Highest Minimum Wage," July 19 2023).

The proposed measure exempts union hotels from paying what would be the nation's highest minimum wage by allowing the provisions to be waived in a bona fide collective bargaining agreement.

The bed tax measure submitted Tuesday was "guided by recommendations from a committee of experts in affordable housing, as well as hospitality workers and their representatives," union officials said.

The union submitted the two Santa Monica ballot measures in the midst of contentious negotiations with more that 44 union hotels in Los Angeles and Orange counties.

The proposed initiatives ask voters to approve the two key provisions that the union is seeking in the deadlocked negotiations ("Hotels, Workers Union Still Deadlocked," July 18, 2023).

Since the Independence Day weekend, Unite HERE Local 11 has staged two waves of strikes affecting a total of 33 hotels, five of them in Santa Monica.

The union has 180 days from the day the measures were submitted to gather the signatures of 10 percent of Santa Monica registered voters -- who numbered 6,929 in last year's November election.

The Council can then either adopt the measures or adopt a resolution to place them on the November 2024 general election ballot.

If the initiatives are taken to a vote, supporters and opponents will prepare arguments for and against the measures, and the City Attorney will prepare an impartial analysis.

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