June 22, 2002

City, county mull hotel-tax hike

By DAN WHITE
Sentinel staff writer

The Santa Cruz City Council and the county Board of Supervisors are expected to vote Tuesday on whether to put an initiative on the November ballot that would raise the hotel tax from 10 to 11 percent.

Tourism promoters are asking Capitola, Watsonville and Scotts Valley to do the same.

Each of these cities makes annual payments to the Santa Cruz County Conference & Visitors Council, a nonprofit that promotes local tourism through national and regional advertising.

Last weekend, a poll taken by the San Francisco firm of Bregman and Associates determined a majority of voters in Santa Cruz — which pays more to the visitors council than any other municipality — support the hotel-tax increase; 53 percent said they would vote yes, 32 said no and 15 percent were undecided. The pollsters called 400 randomly selected voters.

Supporters say the hotel-tax increase would make tourists support the visitors council, while taking that burden away from cities and the county.

Chris Ferrante, general manager of the WestCoast Santa Cruz hotel, said most guests probably would not notice the increase.

Supervisor Ellen Pirie said the increase would help the county’s financial crisis and provide future funding for the visitors council.

Supervisor Jeff Almquist agreed. The money the county saved could be used to make up for some of the cuts to social and health programs.

The reaction has been more muted from some proponents of Measure U, a 2000 Santa Cruz initiative that would have increased the city’s hotel-room tax 2 percent to fund a homeless shelter.

Paul Brindel of the Community Action Board, which works to help the poor in Santa Cruz County, said, "They are going after the same pot of money that Measure U was supposed to deal with.

"We could support this measure if the funds went to homeless services, as opposed to going (to the CVC)."

Homeless advocates have raised about half of the $5 million they need to build the family shelter. Don Lane, chairman of the Homeless Services Center board, said, "We haven’t taken a position on (the suggested initiatives) yet. We would like to be able to support it and be able to know that our supporting that measure would have tangible benefits for family shelters."

John Robinson, president of the CVC’s board and spokesman for the Seaside Co., which owns the Boardwalk, said he opposed Measure U because it made no provisions to preserve the CVC, and because a 2 percent hike would have been a "disaster" with no benefits to the hotel industry.

He said the new initiative would preserve the CVC, "while allowing the CVC to concentrate on marketing ... This is not just a tax raise to go to a program of the moment. This protects local jobs, while returning $700,000 to the city and county, which they can use to save other programs."

Santa Cruz pays about $400,000 annually to the CVC; the county pays $277,000; Watsonville, $10,000; Scotts Valley, $5,000; and Capitola, $5,250. These cities’ contributions are not proportional to the amount of hotel tax they collect each year.

Last year, Santa Cruz collected $3.9 million, the county $3.8 million, Watsonville $567,000, Scotts Valley $581,000, and Capitola $513,000.

Contact Dan White at dwhite@santa-cruz.com