Countywide hotel tax on November ballot

Sonoma County voters this November will be asked to raise the tax on hotel rooms, a proposal that will have little impact on Petaluma-area establishments, but could generate new revenue for local roads and workforce housing projects. Opponents of the measure, which the Board of Supervisors placed on the ballot last week, say it gives county leaders too much leeway on spending.

If approved, the measure would raise the county transient occupancy tax from 9 to 12 percent. Voters countywide, including those living in cities, will weigh in on the measure, though it will only apply to lodgings outside of city limits.

It would generate roughly $5 million per year, according to county estimates, which supervisors said would be used to offset the impacts of tourism in the county. Supervisor David Rabbitt said that the revenue could go toward paving the county’s roads and bolstering fire and emergency services.

The Petaluma area has few lodging options outside the city limits - the closest establishment is the seven-room Valley Ford Hotel - compared with more popular tourist destinations like the Sonoma Coast, the Russian River and the Sonoma Valley.

The tax is also applied to registered proprietors of short-term vacation rentals. One website, AirBnB, lists several dozen short-term rental properties just west of Petaluma, in Penngrove and on the western slope of Sonoma Mountain.

Rabbitt said that tourists nonetheless travel through Petaluma on their way to other destinations, and put a strain on county services in the area.

“There is a very real impact of tourism in the county,” he said. “Petaluma is a hub. We don’t necessarily have unincorporated lodging facilities, but we still have the same impacts.”

Critics of the measure, which requires a simple majority to pass, say that, since the revenue goes into the general fund, it could go toward any county priority, including paying for employee pensions.

County leaders heard similar criticism surrounding Measure A, a general sales tax measure billed as a road repair solution that voters overwhelmingly defeated last June.

Dan Drummond, the executive director of the Sonoma County Taxpayers Association, said that the county first needs to address rising pension costs before asking voters for new revenue. The association has yet to take an official stand on the tax measure, but Drummond said it will likely oppose the measure.

“The thing that is the most striking is that the county has done very little on pensions,” he said. “The concern I have is that the county is bleeding red ink - they haven’t addressed pensions - and they are trying to raise revenue to plug holes.”

Rabbitt said the county had taken steps at pension reform, and said that costs are stabilizing.

He said that an increase in the hotel tax would not likely discourage visitors to Sonoma County. San Francisco’s transient occupancy tax rate is 14 percent, Marin County’s is 10 percent and hotel rooms in Mendocino County face a 10 percent TOT tax plus a one percent business improvement assessment. Hotels in Petaluma charge a 10 percent TOT tax, and leaders have discussed raising the city’s rate.

The Sonoma County Lodging Association this week came out in support of the tax increase. Lowell Johnson, president of the trade group, said that hoteliers realize that tourists heighten the demand for services, especially emergency services. He also said that the proposed increase was modest and would not make the area uncompetitive.

“This isn’t a huge new tax in the first place,” he said. “It’s an additional $3 per $100. It’s not a lot of money.”

Rabbitt said that keeping the tax measure general as opposed to earmarking the revenue gives the county the latitude to offset a number of different effects of tourism.

“I don’t have a problem that it goes to into the general fund,” he said. “The impacts are broad.”

(Contact Matt Brown at matt.brown@arguscourier.com.)