The recession has hit Costa Mesa two-fold, Puckett said. The city’s two biggest revenue generators comprising 70% of the city’s general fund, property and sales taxes, have both fallen off significantly, he said.
Council members Tuesday explored the options residents should be presented with in November.
City officials said the city can bring its Transient Occupancy Tax, also known as a hotel tax, closer to the county average at 10.5%. Costa Mesa’s hotel tax is 6%, the lowest in the county and is still below the average when you add the additional 2% the city charges for tourism and promotion efforts. Each percentage point increase equals about $1 million in the city’s coffers, Puckett said.
City leaders presented a similar proposal in 2000, only to see it defeated when less than the required two-thirds majority of residents supported it. A majority of residents, 54%, voted for the tax increase.
City Manager Allan Roeder heeded the council to act on the issue Tuesday.
“Eventually we may have to look at some general tax increase if we’re looking to provide the highest level of service at the lowest possible cost,” he said. “If not now, at some point in time.”
Puckett also presented the idea of increasing business license taxes, but that proposal received less discussion as council members acknowledged it would generate less revenue.
What some anticipated would be a pretty heavy discussion about Costa Mesa’s legal options regarding Time Warner Inc., quickly ended with a sputter when council members told the Time Warner Cable representative they were not interested in hearing her presentation.
