Letter: Reinhard Clarifies TOT ballot measure
Hello city registered voters it is I, Stephen C. Reinhard, here to hopefully clear up some of the confusion concerning my proposed ballot measure.
The measure reads as follows: It is the intent of this measure to establish the Transient Occupancy Tax at a rate of 13 percent for all lodging properties within the city of South Lake Tahoe. Any and all revenues realized from the percentage rate increase shall go directly to the city’s general fund. The percentage rate on standard properties shall go from 10 percent to 13 percent with all revenue going to the city of South Lake Tahoe’s general fund. The percentage rate on redevelopment properties shall go from 12 to 13 percent. All revenues received from the 1 percent increase on redevelopment properties shall go directly to the city’s general fund. The disbursement to the Redevelopment Agency from all current and future redevelopment properties shall remain unchanged. This increase is permanent with no “sunset clause” involved.
The city currently has two different TOT tax levels. The first level is 12 percent for all properties built after 1988 in the redevelopment project area. There are only three properties that currently fit this designation (Embassy Suites, Embassy Vacations and the Fantasy Inn). Their 12 percent goes directly to the redevelopment agency. All other transient lodging facilities charge 10 percent with that revenue going to the city’s general fund. If the city follows the recommendations of the Godbe Survey of Voters dated April 5, 2002 their ballot measure would be to raise the Transient Occupancy Tax by 2 percent. Passage of this measure would increase the standard rate from 10 percent to 12 percent. What they don’t tell you is that it would also raise the redevelopment rate from 12 percent to 14 percent. The 14 percent from the previous mentioned three properties goes straight to the redevelopment agency, so raising the TOT 2 percent on all other properties only raises $1.8 million of the city’s $2 million dollar deficit.
The city’s plan of using multiple tax increases to cover the deficit, i.e. business license increase, parcel tax, utility tax, was ripped apart by the Godbe survey. The survey showed that none of the suggested tax increases except for raising the TOT had a chance of receiving the 51 percent of the vote needed to be enacted. That leaves the city $200,000 short making some sort of cuts mandatory.
I feel that if you are going to raise an outdated tax, it should be to a level adequate for today, while still providing some benefits for the future. The plan that is proposed in my measure has the ability to make a little more than $2 million.
I came to this figure by placing my increases on the last fiscal year TOT figures. If my plan were in place for that year it would have made $2 million more in revenue. According to the Lake Tahoe Visitors Authority figures, the average daily rate in the city for fiscal year 2000-01 was $73.50. Using that figure my pan would charge the visitors $2.21 more per night. Visitors staying at redevelopment properties will only pay 74 cents more.
With my plan the deficit is eliminated without charging the residents a penny. Regardless of the way you feel about the current council’s spending habits, the city needs this money to survive. Luckily, on the same day you decide on a ballot measure, there are three seats up for reelection on the City Council. We will have the possibility to vote in an instant majority onto the council. This Nov. 5 is probably the most important Election Day since the incorporation of our city 36 years ago. Envision this with me., on Nov. 5 we have the possibility to eliminate our budget shortfall so we can maintain the city’s current level of services, while at the same time electing three people who are not afraid of cutting our way to prosperity, i.e. closing the airport. People have called my measure the spoiler, since the experts say two measures creates voter confusion and a NO vote for both. I say that the city is the spoiler by suggesting an insufficient tax increase with a possible “sunset clause,” which would reverse it all in a specified amount of time. Any increase over 1 percent is sure to draw opposition from the Lodging Association, so if we are going to have to fight for the new rate, it should be sufficient to solve all our problems. The future of this city will be decided by the residents and the City Council. It should not be influenced by one organization of business owners, some of whom are not even residents of this state, let alone our fair city. I hope you can forgive this “paperboy” for overstepping my place in this world, but I am currently unable to purchase a more prestigious title.
South Lake Tahoe, CA
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