Voters in San Mateo County cities mostly supported increased transient occupancy tax (TOT) rates — sometimes referred to as a “hotel tax” — which are paid by out-of-town visitors to help fund city services.
Ballot measures proposing increased TOT rates in the cities of San Bruno, San Mateo and Half Moon Bay so far met the majority needed to pass, with over 70% of yes votes for each city, according to unofficial results early Wednesday and 100% of precincts reporting. However, support in East Palo Alto lagged behind.
Half Moon Bay’s Measure U received 74% yes votes. San Mateo’s Measure W received 76.1% yes votes. San Bruno’s Measure X received 72.6% yes votes. The measures propose increasing the tax rate from 12% to 14%, and to 15% for Half Moon Bay.
Revenue will be used to maintain public health and safety, improve emergency responses, disaster preparedness, and other general city services for the respective cities.
San Mateo Mayor Joe Goethals said that the overwhelming support for the measure is “an acknowledgement by our residents of what we are going through and how our revenues have been impacted by COVID-19.”
Goethals said the city is facing a structural deficit of $7 million and reduced revenue in sales taxes.
“It’s going to take time to see additional revenue because at the moment we’re not seeing a lot of occupancy in our hotels,” Goethals said about Measure W. “But it will be a key component to the recovery so that we don’t have to engage in layoffs and so that service levels to our residents do not drop off considerably.”
In East Palo Alto, Measure V — which requires a two-thirds approval since revenue will be used specifically for affordable housing — received only 63% yes votes so far.
Measure V proposes increasing the TOT from 12% to 14% by 2023, and is estimated to generate $195,000 in the first year and $390,000 annually thereafter. Revenue would help the city acquire and rehabilitate vacant or at-risk properties. It could potentially support a community land trust model — according to the “EPA for Measure V” support campaign — whereby the city acquires homes and makes them affordable to low-income families.
“We really felt that it was important to add money to a land trust and make it possible for some people to be able to buy (property),” East Palo Alto Councilmember and former mayor Ruben Abrica said. Abrica, along with the other councilmembers and Mayor Regina Wallace-Jones, endorsed Measure V.
With more votes to be counted, Abrica is hopeful that the measure can still pass as the community has generally been supportive of affordable housing.
He said people might be hesitant to support the tax since it’s the first time the city is raising the TOT rate, or they may not agree with the specific designation for the funds. Some voters may believe in a free market for short-term rentals.
The Silicon Valley Taxpayers Association opposed Measure V and other tax measures in the Bay Area, saying in its argument that keeping taxes low could help hotels compete for business and boost local economies.
Even if Measure V does not pass, Abrica said the city still has money allocated for affordable housing and can also apply for grants.
Other tax measures
Two other tax measures in San Mateo County also found support among voters.
Daly City’s Measure Q — a half-cent sales tax for general city services — received 72.3% yes votes.
San Bruno’s Measure S — which imposes a tax of up to 10% on gross receipts of cannabis businesses if permitted in the city — received 64.1% votes in favor.
San Mateo County is expected to release its next election results update Thursday afternoon. Results so far include vote-by-mail ballots returned on or before Oct. 28 and all vote center ballots. Vote-by-mail ballots received on or after Oct. 29 still need to be counted and the county’s results website said that election night results may be “significantly different from the final count.”
Voter turnout is at 58.4% so far, with 258,402 ballots cast out of 442,637 registered voters.