The passage of Proposition H will allow the Del Mar City Council to raise the Transit Occupancy Tax (TOT) up to 13 percent. TOT is assessed to people who stay at hotels and motels in a city for stays of less than 30 days. This assessment is added to the daily room rate. Currently, the City of San Diego charges a total of 12.5 percent and the City of Solana Beach will be charging 13 percent as of Jan. 1, 2009.
During the 20 Community Conversations held during the spring of this year, many people asked the City Council to charge more to the people who visit our city. The simplest and most direct way is through the TOT. The TOT is used by the city to provide basic services from sheriff to fire safety to beach safety to street and beach maintenance. All of these services are funded by the general fund and take up a major portion of general fund expenditures. The TOT currently is the city's second largest source of income after property tax. The TOT is also not subject to a take away by the State of California like sales tax and property tax.
As fellow councilman Henry Abarbanel has pointed out, TOT is a means for tourists to directly provide for services that they count on when they visit Del Mar - clean and safe streets, a safe and clean beach and help for any type of health emergency.
The one argument against the TOT put forth by community members was that the council seemed to be creating a de facto tourist marketing district. The council listened to these concerns and has rescinded the ordinance that linked any increase in TOT to a tourist marketing district. In turn these community members now support the passage of Proposition H.
The passage of Proposition H will allow the city council the ability to charge a TOT that is equivalent to its neighboring cities and will not create an economic disadvantage for the hotels. Most people do not select a hotel based upon TOT and those people that do select a hotel based upon TOT would not have an incentive to stay in the closest hotels to Del Mar - hotels in the City of San Diego or Solana Beach.
The passage of Prop H does not create an automatic increase in TOT. The City Council in January 2009 can decide whether the TOT should be increased or not. The council can make its decision based upon the expected decline or increase TOT based upon the state of the economy. If the TOT is increased and it is determined that this increase causes room occupancy to decrease, the City Council can always lower the TOT. Ultimately, what is being voted on is to give the council permission to increase the TOT to 13 percent.
All in all Prop H provides more degrees of freedom for the city of Del Mar and the citizens to continue to provide the services both citizens and tourist expect. So please vote Yes on H.
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