City of Banning Hotel & Transient Occupancy Tax, Measure E (June 2014)
|Voting on Taxes|
|Not on ballot|
Measure E authorized the city to continue to levy a hotel tax of up to 12 percent for all guests staying at hotels, motels, camps and other transient occupancy locations for less than 30 days. In 2009, voters overwhelmingly approved Measure L, which raised the city's hotel tax from six percent to 12 percent. This increase was set by Measure L to expire in November of 2014. Thus, if Measure E had been rejected, the hotel tax would have automatically dropped back to six percent in November of 2014.
The total revenue from the hotel tax in the city was $600,000 in the 2012-2013 fiscal year, which amounted to five percent of all city revenues and was among the top six revenue sources for the city's general fund. If Measure E had been rejected, this revenue would have been cut in half starting on November 3, 2014.
- Election results from Riverside County Elections Office
Text of measure
The question on the ballot:
To minimize future cuts and provide funding for essential city services including police, fire, 9-1-1 emergency response, graffiti removal, and maintaining streets and public areas, shall the City of Banning adopt an ordinance to continue the existing Transient Occupancy Tax (which is a hotel bed tax paid when overnight visitors rent a room) at a cap rate of 12% with annual independent audits provided by code, and all funds used to maintain city services in Banning?
The following impartial analysis of Measure E was prepared by the office of the city attorney:
Measure “E” would amend the Transient Occupancy Tax (“TOT”) to continue at a rate capped at 12 %. The TOT, established by the City of Banning (“City”) in 1965, applies only to guests who stay at hotels and motels in the City for less than 30 days.
On November 3, 2009, by a vote of 3,337 yes to 1,104 no, (75%) City voters approved Measure “L”, which authorized the TOT rate to be increased from the existing 6% to a rate as high as 12% (“the Rate Cap”). Measure “L” permitted the Council to increase the rate as long as it did not exceed the 12% Rate Cap. In December, 2009, the Council increased the tax rate to 10% and on June 22, 2010, it was increased to 12%.
Adoption of Measure “L” has resulted in an estimated $330,000 increase in General Fund dollars for the current Fiscal Year. The total TOT revenue of approximately $600,000 is among the top 6 revenue sources to the City’s General Fund, and is approximately 5% of all revenues.
The City’s voters must now approve continuance of the Rate Cap at 12% by November 3, 2014 or the CAP rate will automatically fall back to 6%.
Measure “E” would continue to require that all TOT collected be allocated to the City’s General Fund. The revenue would be used to continue to fund general city services, including: police, public safety, street maintenance, parks, recreation, senior services and similar items. Currently, in Banning, the largest government expenditure from the General Fund is police services, which comprise 50% of the budget. If Measure “E” is not approved by the City’s voters, the estimated loss in TOT revenue is $330,000, which is the equivalent of 2.5 entry level sworn officers or the entire Community Services Department.
Measure “E” was placed on the June 3, 2014 ballot after the City Council unanimously declared a fiscal emergency in the City based on continued economic and financial challenges at the Federal, State and local levels, and cuts to additional City staffing. Reductions of $630,000 were necessary to establish a structurally balanced budget for fiscal year 2013-2014.
Measure “E” allows the City Council to increase or decrease the TOT, so long as any adjustment does not exceed the Rate Cap.
Measure “E” reserves the right of the Council to make other changes to the TOT ordinance not affecting the rate. Measure “E” requires approval from a majority of Banning voters to take effect.
—Banning City Attorney
The following individuals signed the official arguments in favor of Measure E:
- Deborah Franklin, mayor
- Art Welch, mayor pro tem
- Edward Miller, councilmember
- Don Peterson, councilmember
- Jerry Westholder, councilmember
Arguments in favor
The following official arguments were submitted in favor of Measure E:
Your vote in favor of Measure “E” will allow the City of Banning to keep the Transient Occupancy Tax (TOT) rate, which allows the City to fund important emergency services.
Measure “E” is NOT a tax increase and does NOT create a new tax for Banning residents.
The TOT only applies to guests who stay in hotels and motels in the City for less than 30 days.
Banning Residents DO NOT pay the TOT as a property tax, sales tax, special tax or any other tax, unless they stay in a Banning hotel or motel for less than 30 days.
Each year the TOT generates approximately $600,000 that the City uses to pay for:
The City Council, needs you to vote YES on Measure “E” so that we can continue provide these services at a sufficient level. This year, Banning was forced to make approximately $630,000 in cuts to the City budget. These cuts resulted in a loss of 4 sworn police officer positions and a delay of City maintenance and equipment replacements.
A loss of TOT money at its current rate will result in a $330,000 loss to the City. This money is the equivalent of 2.5 entry-level sworn police officers or the entire Community Services Department. The Banning TOT rate matches the rate of other California cities such as Bakersfield, San Dimas and Long Beach. The Banning TOT rate is lower than other cities such as Anaheim (15%), Riverside (13%), and Pasadena (12.1%).
Please join the entire City Council, community leaders and residents in Banning and Vote Yes on Measure “E”
—Deborah Franklin, Art Welch, Edward Miller, Don Peterson and Jerry Westholder
No official arguments were submitted in opposition to Measure E. If you have an argument that you would like to see posted here, please email the Local Ballot Measure Project staff writer.
- Local hotel tax on the ballot
- Riverside County, California ballot measures
- June 3, 2014 ballot measures in California
- Riverside County Elections Office website, "June 3, 2014 election sample ballot," archived May 16, 2014
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.