City of Palo Alto Hotel Tax, Measure B (November 2014)

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A City of Palo Alto Hotel Tax, Measure B ballot question was on the November 4, 2014 election ballot for voters in the city of Palo Alto in Santa Clara County, California. It was approved.

Measure B increased the hotel/motel tax by two percent and confirmed equal treatment of traditional and online bookings. The revenues from the tax increase was designed to provide for city services such as earthquake safe fire stations, safe routes to school, streets, sidewalks, paths, bridges and maintenance of parks and recreation facilities.

Election results

City of Palo Alto, Measure B
Result		Votes	Percentage
a Yes		15,475	76.28%
No		4,812	23.72%

Election results via: Santa Clara County Elections Office

Text of measure

Ballot question

The question on the ballot:

“

To provide funding that cannot be taken away by the State for general fund infrastructure and City services such as earthquake safe fire stations; pedestrian and bike improvements including safe routes to school, streets, sidewalks, paths, and bridges; and maintaining parks and recreation facilities, shall the City increase the hotel/motel tax by two percent and update language to confirm equal treatment of traditional and online bookings?

”

Impartial analysis

The following impartial analysis was prepared for Measure B:

“	This measure would amend Palo Alto's Transient Occupancy Tax ("TOT") ordinance to increase the rate by two percentage points, from 12% to 14%. The TOT, also sometimes called the "hotel tax," applies to the rent that is charged to guests staying in hotels and other short-term rentals located in Palo Alto. Hotel tax rates vary from city to city. In the San Francisco Bay Area, hotel tax rates generally range from 8%to 14%. The hotel guest is responsible for paying the tax. Currently, hotel tax revenue accounts for more than 5 percent of Palo Alto's total general fund revenue. These revenues cannot be taken away by the state. They are used for general local governmental purposes such as police, fire, public works, parks and recreation, library and capital improvements. The City estimates that the proposed 2% increase will generate additional revenues of approximately $2,200,000 each year. The City Council has indicated an intention to use these funds for infrastructure maintenance and improvements such as earthquake safe fire stations, pedestrian and bike improvements, streets, sidewalks, paths, bridges, and parks and recreation facilities. This measure also makes minor amendments to the TOT ordinance to clarify that the tax applies in the same manner to informal short-term room rentals and online brokers of traditional hotel rooms. Many cities are updating their TOT ordinances to ensure that TOT is collected on the actual rate the customer pays, rather than the "wholesale" or other discounted rate, and to address new service delivery models. Note that these changes do not implicitly permit hotel use that does not comply with the City's Zoning Code. The ordinance will become effective if a majority of those voting on the measure vote for it. A vote "For the Ordinance" will increase the hotel tax from 12% to 14% and clarify the application to online brokers and other short-term rentals. A vote "Against the Ordinance" will keep the hotel tax at 12%.	”
—Molly S. Stump, Palo Alto City Attorney

Support

Supporters

• Nancy Shepherd, Mayor, City of Palo Alto
• Sid Espinosa, Former Mayor of Palo Alto
• Penelope B. Ellson, Community Volunteer, Safe Routes to School
• Gregory Schmid, Council Member
• Ray Bacchetti, Volunteer, City Infrastructure Study

Arguments

The following was submitted as the official arguments in favor of Measure B:

“	Vote Yes on B to ensure Palo Alto can invest in city infrastructure we need without increasing taxes paid by local residents and businesses. With excellent public schools, a vibrant downtown, unique neighborhoods and beautiful natural surroundings, our community is thriving in many ways. However, local infrastructure is aging and requires repairs and upgrades. Our oldest fire stations and the building that houses our 9-1-1 emergency communications network do not meet seismic safety standards. Some neighborhoods are experiencing overflow parking impacts. City streets and sidewalks are aging and need repair or replacement as well as safety improvements for rapidly increasing numbers of pedestrians and bicyclists of all ages, including children walking and biking to school. Measure B will enact a modest 2% increase in the tax paid by out of town visitors staying in Palo Alto hotels and motels who of course rely on our roads and other infrastructure. Measure B will: Ensure that Palo Alto's fire stations and public safety operations are seismically safe and continue operating after a major earthquake Provide safe sidewalks, paths and bridges for bikes and pedestrians, including safe routes to school Maintain city streets and roads, making dangerous intersections safer for all users Reduce neighborhood parking impacts by creating new offstreet parking options Maintain city parks and recreation facilities By law, all funds from Measure B must stay here in Palo Alto under local control and cannot be taken away by the State. Please join a unanimous City Council, as well as community and business leaders and vote Yes on Measure B!	”
—Nancy Shepherd, Sid Espinosa, Penelope B. Ellson, Gregory Schmid and Ray Bacchetti

Opposition

Opponents

• Jon D. Kiya, Chair-Palo Alto Chamber of Commerce
• Russ Cohen, Executive Director, Palo Alto Downtown Business & Professional Association
• Barbara Gross, Hotel Manager
• Tony Carrasco

Arguments

The following was submitted as the official arguments in opposition to Measure B:

“	Raising our city's Transient Occupancy Tax (TOT) to a level that puts Palo Alto at a competitive disadvantage would be unwarranted and unfair, with unintended consequences. The business community believes that other, better ways can be found to fund the city's infrastructure needs. We stand ready to work with the Council and staff to explore the means by which those needs can be addressed. Increasing the TOT is not the answer. Most of the burden of the added tax would fall on the employers, large and small, that send hundreds of people on thousands of visits to this area to meet and do business. All those employers have a keen eye for saving money, and travel expenses are often a significant item in their budgets. If there's a higher TOT rate in Palo Alto than in neighboring communities, there would be every reason to worry that those employers would re-direct visitors to less expensive destinations. Palo Alto could potentially lose some of the restaurant and retail revenue that it now receives from these visitors, and taxes linked to that revenue, as well as money spent on lodging. Those losses could affect city services or create the need for further taxation. No one is arguing that hotels and hotel guests are disproportionately heavy users of city services. Proceeds from the increase would not+ cannot+be earmarked for expenses relating to visitors. This measure would impose an unfair burden on a single group of Palo Alto businesses that already contribute substantially to the city's revenues. For these reasons, the Palo Alto Chamber of Commerce and Palo Alto Downtown Business and Professional Association are on record as opposing the TOT increase. We ask our neighbors and fellow residents to join us in voting against it.	”
—Jon D. Kiya, Russ Cohen, Barbara Gross and Tony Carrasco

See also

• City tax on the ballot
• Local hotel tax on the ballot
• Santa Clara County, California ballot measures
• November 4, 2014 ballot measures in California

External links

Suggest a link

• Santa Clara County Registrar of Voters office website