Room-tax hike will start today, or in 2 weeks
Measure Z may go into effect with the same type of dialogue that created it — a negotiation.
The city of South Lake Tahoe reported that today is the first day lodging establishments that collect transient occupancy tax should start charging an additional dollar in motel room tax. The measure — expected to collect $1.35 million in revenue — was spawned by a community coalition. It was approved by voters Nov. 5 with 56.1 percent of the vote.
One of the coalition members — the South Lake Tahoe Lodging Association, disputes this date believing its start date should be Dec. 20. Its membership, in line to collect the fees, claim the effective date should fall 10 days after the City Council meets, association President Jim Foff said.
The city attorney’s office set the date 30 days after its Nov. 5 passage.
The matter will make the council agenda on Dec. 10. Options will be offered in the hopes parties will “come to a middle ground,” City Manager David Jinkens said.
The city has received calls from the lodging community on the measure, which adds revenue to the 10 percent tax that guests in standard properties are charged. Hotels in the redevelopment zone charge 12 percent.
“Any room or property that is rented after Dec. 5 is subject to the fee, regardless of when the reservation may have been booked,” City Attorney Catherine DiCamillo said.
The city anticipates an estimated $900,000 a year in general fund money to make up for budget shortfalls. As another part of the initiative, business license fees will double for new applications as requested. Renewals will become effective in July. Projected to bring in $450,000 annually for the city, the license fees are capped at $3,000. Most businesses will see a $50 hike.
The revenue has no earmarked designation, but it’s intended to maintain core services and replace the reserves the city was forced to tap into when it balanced its budget.
The timing couldn’t be better.
Most cities and counties are bracing for the possibility of more trickle-down state cutbacks Dec. 9, when Gov. Gray Davis decides to trim $5 billion in state funds.
“All the more reason why we need the reserves,” Jinkens said.
The lodging fees handed down from the measure top out at $1.50, in the case of “catastrophic” budget circumstances.
Other efforts are up for consideration in the long-range plan that spearheaded Measure Z. This includes a raise in the sales tax, but this effort must be applied for through the state.
A grass roots coalition came up with the plan in March, when the city faced $450,000 in budget cuts. Police and fire services — which made up part of the coalition — were laid on the chopping block at the time. The public safety unions joined seniors and the South Lake Tahoe Chamber of Commerce in supporting the measure.
— Susan Wood can be reached at (530) 542-8009 or via e-mail at email@example.com
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