Propositions J and K are both hotel tax measures. They are next to each other on the ballot, and each has similar provisions. Also, if both measures pass, the one that gets the most votes wins. Confused yet?
Currently, San Francisco’s hotel tax is 14 percent. Of that, 8 percent is for specific purposes (tourism improvement, etc.) and 6 percent goes into the general fund. Our tax law directs hotels to collect and pay that tax to The City. Search engines like Orbitz and Expedia only charge taxes on the amount hotels receive, not on the inflated cost the websites charge consumers. Both ballot propositions would close that loophole — though Prop. K does so more artfully. Making websites collect and pay hotel tax on the amount charged to the consumer is estimated to bring in $6 million per year.
Also, in an effort to exclude people who live in single-resident-occupancy hotels from hotel taxes, there is an exception for “permanent residents.” But airlines often book rooms for longer than 30 days and rotate flight attendants and pilots in and out, thus taking advantage of “permanent resident” status. Both ballot propositions clarify that “permanent residents” are people, not companies that book a hotel for an extended period of time.
Where the provisions differ is this: Prop. J also contains a 2 percent increase in the hotel tax for the general fund, bringing the total to 16 percent. The increase would expire in 2014, though I’m not aware of any tax increase in this city that has ever been allowed to expire. Ever. Proponents of Prop. J say the increase will only be a $3 increase per night and bring in about $25 million per year. They point out that the hotel tax hasn’t changed since 1994.
The Chamber of Commerce says the tax increase would result in fewer people staying in hotels and thus the elimination of about 2,000 (mostly union) jobs from the local hotel industry. Also, lower occupancy rates mean less money spent elsewhere in The City by visitors — at a loss of $75 million a year, according to the Chamber.
In fact, according to Joe D’Alessandro, president of the San Francisco Convention and Visitors Bureau, at least five organizations have said they will “reconsider” holding events here if Prop. J is enacted. D’Alessandro estimates that the lost revenue from those conventions would be $120 million.
Finally, adding to the list of “reasons people hate politicians,” Mistermayor added a confusing and underhanded provision in Prop. K that says: Assuming both Props. J and K pass, if Prop. K (without a 2 percent increase) gets more votes than Prop. J (with a 2 percent increase), Prop. J will not take effect.
This little proposition battle is, sadly, taxing.
The difference between fees and taxes
Legally, a fee doesn’t need voter approval, but taxes do. So what is the difference between the two? Mainly, a fee needs to directly result in a service to the person paying. For example, you pay a fee for a marriage certificate, and you get the document.
Apparently, The City’s cigarette fee needs to be more tightly related to the street cleaning service it is supposed to pay for. On Wednesday, the Budget and Finance Committee endorsed some small amendments suggested by the city attorney.
I can think of another fee that might be too far removed from the services it is meant to provide. Indeed, at Tuesday’s Board of Supervisors meeting, Supervisor Sean Elsbernd flatly said that the city attorney had issued a cautionary memorandum on the alcohol fee because the people paying the fee generally aren’t the ones receiving services. Not that the prospect of costly litigation ever stopped the board before. The alcohol fee passed by a vote of 7-3 opposed. That’s the only math that matters at City Hall.
Finding a place to call home is tough for new business prospects
Life is tough for the poor supervisors. After not being able to meet for a whole month, they were assaulted Tuesday with massive efforts by groups begging to fill vacant storefronts. What to do with all this attention?
The Planning Commission had previously approved an application by Pet Food Express to occupy a vacant old video store at California Street and Presidio Avenue. The commission had also given the go-ahead to the creation of a large shopping center at Fifth and Market streets. Both decisions were appealed to the Board of Supervisors, where reason reigns.
First up was the hearing on Pet Food Express. Every small pet food store in The City (and one from Pacifica) got together to oppose the store, but community members and animal-rights activists were on hand to offer support. Best quote (from a small pet store owner), “We are no longer even selling pet food. We opened a dog cafe instead where we serve entrees.” No appetizers? Outrageous!
After a hearing in which Supervisor David Campos was unusually prickly (seriously, it was weird) toward the Planning Department for approving the Pet Food Express project, only six supes voted against the pet store, two short of the eight needed to block the plan.
Later, the CityPlace retail project was approved unanimously by the board after the developer of the five-story shopping center promised to pay about $2 million per year to The City for pedestrian improvements. This is what we charge in penance for demanding enough parking spaces for people to haul off big flat-screens from Best Buy (a girl can dream!) in cars.
And so, kicking and screaming, the supes have accepted the pleas of retailers that want to fill our large empty buildings, hire people and pay taxes.
Now, back to naptime!