Residents in Monterey County’s unincorporated areas will vote this November on whether to increase the transient occupancy tax, also known as a hotel tax, by 2%.
Voters in the city of Carmel-by-the-Sea will do the same for visitors who stay within its city limits. The city will also ask voters to approve a sales tax increase of 0.375%, or a fraction of a penny per dollar.
The hotel tax rate in unincorporated areas would rise from 10.5% to 12.5%, while Carmel’s rate would go up from 10% to 12% if voters in the respective jurisdictions approve.
The rate of Carmel’s sales tax, which is also known as a “transactions and use tax,” currently has a locally controlled addition of 1.5% above the state’s rate of 7.25%. The city and others in Monterey County also charge increases for two countywide transportation funds.
If voters approve the increase, which would have no sunset date, the rate the city would retain would be increased to 1.875%, for a total sales tax rate of 9.625%.
A simple majority would be needed for each measure to pass.
Measure E: Monterey County hotel tax
Monterey County voters will see the transient occupancy tax measure appear on the ballot as Measure E.
The county Board of Supervisors projected this summer that the county was facing a $27 million budget shortfall this fiscal year.
The roughly $7.6 million generated by the hotel tax increase would go toward a range of general fund expenses, including infrastructure repair and upgrades, homelessness reduction programs, emergency services and other uses, according to the county.
The county last changed its hotel tax rate in 1995.
Measures M and N: Carmel taxes
Carmel residents will consider the transient occupancy tax as Measure M and the sales tax increase as Measure N.
The two Carmel measures would generate roughly the same amount and a total of $3.7 million a year if approved. The city has about $100 million in deferred infrastructure maintenance it would use the money for, according to City Council documents.
Other cities consider sales taxes
Five other cities in Monterey County will also consider extending additional sales tax rates previously set by voters or enacting new increases.
Voters in the cities of Greenfield, King City, Monterey, Pacific Grove and Salinas will all decide on whether to establish sales tax rates between 0.75% and 1.5% above the state’s tax.
Local jurisdictions keep the money raised by voter-approved local tax measures rather than having state lawmakers decide how to spend it.