.West County Ballot Measure Seeks to Raise Hotel Tax

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Love birds visiting the Sonoma County coast and Russian River for Valentine’s Day next year will need to pay a little more for their romantic getaway if voters pass a measure on the March 2 ballot.

Measure B, one of two items up for consideration in Sonoma County’s upcoming special election, would increase an existing tax on West County hotels and vacation rentals until the measure is repealed. Currently, the bed tax on short-term stays, known as a transient occupancy tax (TOT), is 12 percent on hotels in the unincorporated county, included in the West County. If passed with two-thirds of the vote, Measure B will raise the TOT to 16 percent on West County establishments, generating an estimated $2.7 million per year for local services.

Half of the new funds would be designated to fund West County fire departments’ paramedic services and the consolidation of fire departments, which proponents say will increase the departments’ efficiency. The other half of the funds would pay for school infrastructure and programs, with the specific spending decision to be determined by a special advisory committee created by the Board of Supervisors.

The proposal for school funding comes as enrollment in West County schools continues to decline, leading officials to threaten to close El Molino High School this August in an effort to save funds by consolidating students. Measure A, the other item on the March 2 ballot, would extend an existing parcel tax for three years to delay the closure of the school and give administrators time to plan for the West County school system’s future.

Unsurprisingly, the debate around Measure B centers on whether the tourists who flock to the area to see natural beauties, shops, restaurants and other attractions are paying enough to support the local services they use.

Sonoma County Supervisor Lynda Hopkins, who represents West County and supports Measure B, believes the industry can afford to chip in more. She says hotels can pass the additional tax on to guests and argues that most tourists will not be put off from spending the night in the West County by the additional tax.

“Given the amenities that we have: the Sonoma County coastline, the Russian River and beautiful redwoods. … is $8 [on a $200 room] really going to stop you from traveling to Sonoma County when you could easily spend 10 times that on dinner?” Hopkins said in an interview.

Opponents of the measure—who include local hoteliers, restaurant owners, Airbnb hosts and the Sonoma County Farm Bureau—disagree, worrying that the tax will decrease the number of overnight guests and slow the recovery of the tourism industry, which has been one of the worst impacted by the Covid-19 pandemic.

“Our position isn’t one of not wanting to support emergency services or schools … but more just the fact that the tax increase, without a doubt, will decrease visitation and slow our recovery coming out of Covid,” Joe Bartolomei, the owner of Forestville’s Farmhouse Inn, told the Bohemian. Bartolomei is an organizer behind the “Save Sonoma Jobs” campaign committee opposing Measure B.

As of Jan. 19, “Save Sonoma Jobs” had raised $4,750 from a variety of West County business owners to oppose Measure B, according to available campaign finance records. “Tax Tourists Fairly,” the committee supporting the measure, had raised $11,000 by Feb. 5, with funds so far coming from Hopkin’s supervisorial campaign committee, the Russian River and Bodega Bay firefighters’ unions and Operating Engineers’ Local Number 3.

Ups and Downs

In 2019, Sonoma County gathered $48.7 million in TOT funds, matching 2018 for an all-time high, according to the Sonoma County Economic Development Board’s (EDB) 2020 tourism industry report. All told, 10.2 million tourists visited the county, with 4.9 million staying overnight in 2019.

Tourism, however, can be a fickle industry—especially during worldwide pandemics as it turns out.

Job loss in Sonoma County’s hospitality industry reached nearly 30 percent in the county due to the Covid-19 pandemic and resulting health restrictions.

In 2020, hotel and short-term rental occupancy rates in Sonoma County fell by 40 percent as compared to 2019, according to the EDB’s annual report. And, according to a study by the National Travel Association, worldwide rates of domestic and international travel may not reach 2019 levels again until 2024. Those trends make Measure B and other similar taxes a crapshoot, opponents warn.

In a recent report on the possible impacts of Measure B, Robert Eyler, a Sonoma State University economics professor, predicts that the results of Measure B will be tied to the West County’s overnight occupancy rates. If the rate increases above 2019 levels, businesses will split the additional revenues with the county. If overnight tourists don’t flock back, the new tax measure won’t raise as much—or anything in the worst case scenario—and employers will lay off workers.

Another factor at play is the rise—and vilification—of digital vacation rental platforms like Airbnb and Vrbo. Politicians and housing advocates around the world have panned the platforms for incentivizing property owners to remove housing units from circulation, driving up the prices for people who want to live in an area full-time. 

A 2017 study found that a 1 percent increase in the number of Airbnb listings in a zip code led to a 0.018 percent increase in rents and a 0.026 percent increase in home prices. The West County, beautiful as it is, no doubt suffers from this effect to some degree.

Tax Targeting

Opponents of Measure B also question whether the tax should target the tourism industry. They argue that the first responders are more burdened by daytrippers visiting from the Bay Area or the urban centers of Sonoma County than the area’s overnight guests, who would end up paying the additional TOT fees.

At a Feb. 3 community forum hosted by the League of Women Voters, Sonoma County Fire District Chief Mark Heine said that 80 percent of patients treated and transported by the Bodega Bay Fire District were non-taxpayers, meaning that residents of the fire district are subsidizing emergency services for tourists.

Heine later acknowledged that he does not know how many of the non-taxpayers (i.e. tourists) who used Bodega Bay emergency services are daytrippers or overnight guests.

Still, opponents of Measure B have not suggested an alternative method to pay for the services. Their main argument is that the tax is overly burdensome and ill-timed.

Hopkins says she was partially inspired by Measure W, a TOT tax increase which nearly three-quarters of West Marin County voters supported in November 2018. Marin County’s TOT measure was projected to raise approximately $1.3 million for affordable housing and emergency services each year.

Recent Sonoma County elections indicate the electorate may be leaning in Measure B’s favor. In the November 2020 election, county voters passed all of the tax measures on the ballot.

Will Carruthershttp://www.wrcarruthers.com
Will Carruthers is the news editor of the Pacific Sun and North Bay Bohemian. Email tips to [email protected]. Follow him on Twitter at @Carruthers_W.
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