With a growing budget deficit and mounting financial worries, Half Moon Bay officials are placing their hopes on Tuesday’s ballot with a proposed 2 percent hike in a hotel guest tax.
Measure Q, which needs 55 percent approval to pass, would raise the city’s transit occupancy tax from 10 percent to 12 percent.
For years, the city’s expenses have increased while its revenue has remained static, Mayor Bonnie McClung said.
City officials planned to put the measure on the ballot last year, but postponed their plan after a federal judge awarded $41 million to a developer who sued the city. The city settled with the developer in April, but may still have to pay $18 million.
City officials project Half Moon Bay will face a $1.2 million budget shortfall by the end of next year.
“Now it’s become an emergency situation,” McClung said. “This is a tax that doesn’t tax our residents, it taxes our visitors.”
The proceeds from the 2 percent hike will be put in the city’s general fund to support city services such as libraries, youth and senior facilities, parks, streets and police, McClung said.
But Don Pettengill, treasurer of Coastside Citizens for Good Government, said raising the tax is a mistake for a city for which tourism is the lifeblood.
“Half Moon Bay relies on visitors driving here and spending money. In an economic downturn, people are already coming back,” he said. “The last thing they want to do is pay more for a hotel room.”
The initiative needs 55 percent approval to pass.
10 percent: Current transit occupancy tax
12 percent: Proposed transit occupancy tax
Funds to pay: Any governmental purposes, including but not limited to library services, youth and senior facilities, police services, park and recreational facilities, city streets
Source: Half Moon Bay