Visitors face hotel tax hikes
By: John Upton
November 4, 2009
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| Voters in six San Mateo County cities approved increases in hotel taxes on Tuesday. (ASSOCIATED PRESS) |
Hotel visits will become slightly more expensive in some cities near San Francisco International Airport, after voters in six Peninsula municipalities approved hotel tax hikes Tuesday.
Voters in all cities where measures were proposed — San Bruno, Brisbane, Burlingame, Millbrae, San Mateo and South San Francisco — approved the minor tax hikes, which will help those cities fill recession-era budget deficits.
Taxes that a customer must pay to stay in a hotel room costing $150 per night in Millbrae, for example, will increase from $20 to $23. The measures were generally supported by the cities’ lawmakers, many of whom placed the initiatives on the ballot.
The lawmakers and some business leaders had argued that the increased taxes would help the cities continue to provide vital services.
In San Mateo, the city was counting on the increase to help close an $8 million budget hole, Hossein Golestan, the city’s finance director, had told The Examiner in June.
A proposal to increase the city’s hotel taxes to 12 percent from 10 percent calculated out to an estimated $800,000 in new city revenue annually.
Some hoteliers, on the other hand, had argued the tax increases would drive customers to stay at other cities.
“Despite an increase in the percentage of tax,” wrote five Brisbane hotel proprietors in a ballot statement before the vote, “gross tax receipts would likely decrease as this tax will push demand outside the City of Brisbane.”
Hotels on the Peninsula compete with San Francisco for visitors, particularly those that land at SFO. The tax rates in all Peninsula cities will remain lower than those in The City.
San Francisco recently increased its hotel tax rate to 15 percent, with hotels in some neighborhoods subject to a 15.5 percent increase.
Following Tuesday’s vote, most of the affected cities’ hotel taxes will increase from 10 percent to 12 percent, while South San Francisco’s hotel taxes will grow from 9 percent to 10 percent.
Burlingame expects to generate an extra $2 million annually from the increased tax — known as a transient occupancy tax — documents show.
Other cities expect more modest revenue boosts, such as $270,000 in San Bruno and $400,000 in Millbrae, according to election-related documents.
jupton@sfexaminer.com
