Michael Mullenniex 1:43 p.m., May 25
City moves toward approval of expanded Tourism Marketing District
San Diego hoteliers today will propose a wide-reaching expansion and extension of the city’s Tourism Marketing District, originally approved in 2008 and set to expire after a five-year trial run at the end of 2012.
Under the new proposal, hotels with 30 rooms or more would collect an additional 2.0 percent tax in addition to the current 10.5 percent Transient Occupancy Tax, while those with 29 rooms or fewer would charge 0.55 percent. The previous District only required the taxes to be collected by operators of facilities with more than 70 rooms. Instead of going into the city’s general fund, money from the tax would go back to the hoteliers via an arrangement requiring the city to contract with the District for activities mostly related to promoting San Diego as a tourist destination.
The renewed program, which does not require a public vote, would last for 39.5 years. During that time, Voice of San Diego determined that the money raised would total over $1 billion, possibly $1.4 billion or more.
While the new proposal must be ratified by nearly 200 hotel, motel, and bed-and-breakfast owners (using a system in which the votes of larger hotel operators count proportionately more than those of small business operators), several groups have already expressed concerns.
The League of Women Voters notes that most cities that have similar tourism districts authorize them for terms of one to five years, and that an authorization lasting nearly 40 years would be unprecedented. The group also suggests that the proposal would skirt Prop 26, which requires any new tax to be voted on by members of the public, by erroneously referring to the fee as an assessment.
“An assessment must benefit those paying the assessment. The tourists pay the increase but the hoteliers get the benefit,” says League co-president Jeanne Brown, who also complains that while the fees would help boost tourism in the city, they “[do] nothing to help alleviate the impact of increased tourism on the city.”
Tom Lemmon, business manager of the San Diego County Building and Construction Trades Council, which represents a collection of local unions, also offered criticism of the proposal in the San Diego Daily Transcript.
“San Diego voters have repeatedly rejected an increase in the hotel tax, even when the money benefits all San Diegans,” says Lemmon, calling the proposal “an end run around [San Diego] citizens, implementing policy that plan backers know they’d never be able to get the public to approve.”
Many of the concerns voiced by Lemmon, including the voting system that gives small lodging providers, who would be newcomers to collecting the fee, less of a voice in approving the District or its expenditures, are echoed by Brown.
The city council will take up the issue in today’s afternoon session and will consider adopting a resolution declaring the city’s intention to extend the program authorization through June of 2052.