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Monday, Jul 15, 2024
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Prop. J Makes Visitors Pay Their Fair Share

Wealthy hoteliers, along with Libertarian zealots, are bending the truth in an attempt to defeat Proposition J, the proposed 2.5-cent increase in San Diego’s transient occupancy tax rate.

Statements and political mailers sponsored by these special interest groups are intended to hoodwink local voters into believing that this measure will be a tax increase on the citizens of San Diego and that it will harm the local economy.

These allegations are just plain false, and voters should not be misled into defeating a well-justified and much-needed source of revenue to help pay for essential city services.

San Diego residents will not pay more taxes under Proposition J. Approval of the measure would increase the rate tourists pay per hotel room night to 13 percent from the current rate of 10.5 percent. For instance, under the proposed rate, a conventioneer staying overnight at the Manchester Grand Hyatt would pay an extra $5.38 on their standard $215 per-night room rate.

Millions of visitors are drawn to San Diego. And while our local economy benefits greatly from tourism, visitors to San Diego also place an extra burden on San Diego’s various infrastructure systems. The increased TOT is a tax that tourists will have to pay to use your beaches, to use your parks and to receive protection from your police and fire services. You already pay for these services, so why shouldn’t tourists pay their fair share and take on some of the burden?

When compared to other major cities, the proposed 13 percent TOT rate is not at all burdensome. For instance, if you are a San Diego resident and you visit San Francisco, you’ll pay a 14 percent tourist tax for every hotel room night. If you travel to Seattle, be prepared to pay 16 percent. And in Houston, you will cough up a whopping 17 percent.

In fact, of the largest 10 cities in America, more than half currently charge a higher rate than that which is proposed under Proposition J.

Opponents would have you believe that Proposition J will have a devastating effect on our local economy and our tourism industry. The same wealthy hoteliers who have pledged to spend $1 million to fight Proposition J are enjoying the highest room occupancy rate in the nation (87.1 percent for the week ending Aug. 21, the last reported figures). They are also commanding average room rates that are among the nation’s highest at $122.94 for that same period.

In short, San Diego’s tourist industry is among the strongest in the nation, and a modest increase in the rate paid by hotel guests to support their share of city services will be of little consequence to San Diego’s drawing power.

In fact, earlier this year, local hotel industry groups shrugged off any concerns they may have had about the effects of a TOT increase on tourism when they supported a similar measure (Proposition C on the March ballot) that also would have increased the TOT rate to 13 percent. The difference is that the March measure would have earmarked nearly 2.5 percent of the total TOT proceeds, an estimated $26 million, to promote tourism.

In order to meet state requirements to pass with a 50 percent majority, Proposition J does not earmark funds for specific uses. This also gives the city flexibility to use the revenue to meet the city’s pressing needs of the day, be it public safety such as police and fire protection, libraries, clean beaches or any other critical need, without locking it into a rigid formula.

In this discussion, there is no way to ignore the city’s current difficult financial situation. We are going to have to solve these problems anyway, with or without help from additional tourist dollars. It makes no sense to turn down even a partial solution to our current fiscal problems.

The alternative will surely be Draconian cuts to city services, in which case my advice to the hoteliers is to save that $1 million you’re using to fight Proposition J, because you might need it to help make up for funding cuts to tourism programs next year.

City Councilwoman Toni Atkins, an ex officio member of the San Diego Convention and Visitors Bureau, is San Diego’s deputy mayor and represents the 3rd District.

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