San Diego Hotel Tax Vote: Big Bucks, A Private Affair

By Gene Cubbison
|  Monday, Sep 24, 2012  |  Updated 5:19 PM PDT
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Hoteliers Lobby for Private Election

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San Diego hotel owners are looking to renew a special surtax on their guests, by way of a controversial private election.

It's a process they've adopted to bankroll a convention center expansion.

Since 2008, San Diego's major hotels have charged their guests 2 cents per dollar above the city's general room tax rate of 10.5 percent under a special taxation district they created for the purpose of tourism marketing.

The levy expires at year's end, and they now want to renew the setup.

The renewed 2 percent room tax surcharge, projected to generate $30 million a year, would be in effect for four decades, raising well over a billion dollars.

Tuesday afternoon, hoteliers will lobby the City Council to authorize an election in which their votes would be "weighted" on the basis of their properties' revenues.

Those numbers are kept confidential.

Says Liam Dillon, who covers civic issues for NBC 7’s online media partner, Voice of San Diego: "That should be troublesome in an era where we talk more and more about 'transparency,' that there's this group that can basically raise taxes without a public vote. And not tell anybody how much power they have over that vote."

Recent city estimates of how votes are allocated, within ranges of percentages, indicates that larger hotel owners have more than enough to hold sway.

Those estimates came after prodding by Voice of San Diego during the convention center funding election.

But industry leaders say smaller hotels that face a discounted surtax rate are 'on' board'.

And, that hotel guests pay lower rates in San Diego than in other 'destination' cities in California.

Says Jody Blackington, president of the San Diego County Hotel-Motel Assn: "Based on the fact that this has allowed us to market our city and drive visitors to our destination, and save taxpayer dollars that used to be spent by the city -- taken from the [room tax] -- to go back to the General Fund allows us, I think, to have great success on a go-forward basis."

If passed, the renewed room tax surcharge faces the prospect of legal challenges under an initiative passed in 2010.

The room-tax financing scheme behind the planned convention center expansion already is subject to the outcome of a so-called "validation" lawsuit.
 

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