WORD FROM A FRIEND
What’s on the June Ballot?
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this proposal would increase the TOT rate from 11% to 14%, generating approximately $700,000 in the first year and adding $1.9 million to the base for 2023-24. The additional By Zach Friend revenue would be treated as part of Santa Cruz County the General Fund Supervisor resources used to fund mandated Transient Occupancy Tax programs and critical services that are not fully funded, such A Transient Occupancy as public safety, parks and Tax (TOT) is imposed by most public health operations. cities and counties on hotels, motels, inns and similar lodging Single-Use Cup Funding establishments on persons staying overnight for 30 days or less. The county currently imposes a single-use cup fee of 25 cents. This Typically, the lodging provider fee stays with the business that collects the tax from the guests collects it—none of the funding and turns the funds over to is provided to the county for the county or city. The county environmental or other programs. currently imposes an 11% TOT, The purpose of this ballot item which was approved by voters as is to propose splitting the fee a general tax. Together with local so that half would stay with the cities, TOT has been levied locally businesses and half would go for more than two decades. to the county. This would not The last increase to the TOT create a new or additional fee, was passed by voters in 2012. At but is simply asking voters if the time, it increased the TOT they support having 12.5 cents of in the unincorporated area from the 25 cent charge return to the 9.5% to 11%, a figure arrived at county for general environmental after discussion with the Santa purposes—including clean-water Cruz County Hospitality and protection, waste reduction, Lodging Association and the Cities wildfire prevention, trash and litter of Santa Cruz and Capitola. clean up, maintenance of parks Similar outreach was conducted and public areas, environmental this year to consider an increase in education, and other general the TOT. If approved by voters— services. The rest of the funding and with a start date of January would ensure the business receives 1, 2023—this proposal would adequate funding to more than increase the county’s TOT rate for cover implementation costs hotels, motels, and inns from 11% associated with the program. to 12%, generating approximately $160,000 in the first year and add Property Tax Revenue $440,000 to the base for 2023We often receive questions 24. Nearly all of these funds are about property taxes and how paid for by those visiting our much of your property tax dollar community from out of the area. stays locally. While this issue For vacation rental properties,
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MARCH 2, 2022 | APTOS LIFE
his June, voters will have an opportunity to weigh in on a handful of funding measures for the unincorporated county (including Aptos). Here is an overview of the proposals, their purpose and estimated revenues it would provide to the county.
SPLIT DECISION Voters will decide in June whether the tax on single-use cups should be divided between the county and local businesses. isn’t on the June ballot, it helps provide context about the need for seeking TOT and other local revenue streams. Due to a Prop. 13 formula, the County of Santa Cruz retains some of the lowest property taxes revenues of any county in the state. Only 13% of your property tax dollars end up back with county government to fund our local services. On average, this equates to $463 of property tax dollars per resident. By comparison, Santa Clara County (under the Prop. 13 formula) retains $10,831 of property tax dollars per resident; San Mateo County, about $4,500; and Napa County, about $4,000. Approximately 50% of residents live in the unincorporated county (compared to about 4.5% or so in Santa Clara County).
As you can imagine, we hear questions about why roads or services seem better in x or y county, and one of the simplest answers has to do with how much of your property tax money stays with County government. If the Prop. 13 formula were to change at some point in the future, unincorporated residents could see significant improvements to services and infrastructure without increased taxes by simply having more of your local property tax dollars stay with local County government. As Prop. 13 was approved by voters as a state constitutional amendment, any changes to the formulation and distribution cannot occur at the local level. As always, I’d love to hear your questions or feedback on this or any other county issue. Feel free to call me at 454-2200.
