Costa Mesa has the lowest hotel tax in the county. Hotels in the city charge their visitors 6%, which goes to the city’s general fund. Finance officials estimate that the city would make $1 million per year for every percentage point the tax was raised, but it would first have to be approved by voters, who have rejected it in the past.
Councilwoman Katrina Foley and, before her, former Councilwoman Linda Dixon have been trying to get the issue on the ballot again for years, saying that the tax increase would not substantially affect hotels and would create needed revenue.
But it takes a majority vote of the council to get it on the ballot, unless proponents can manage to get thousands of verified signatures from residents.
The unions that represent Costa Mesa’s police, fire fighters and city hall staff members also are in favor of raising the hotel tax.
The fire department’s proposed fees, if implemented, would have hardly generated enough money to account for 5% of the city’s projected $19-million deficit, but city employee unions were hoping that the roughly $1 million they earned would save a few more workers from being laid off.
A 1% increase in the hotel tax could raise more money than all of the fees combined.
The fees largely failed as a majority of the council members echoed the concerns of several residents who spoke out against them.
One fee, for instance, would have earned the city an estimated $540,000 by charging residents extra money when city paramedics responded to certain medical emergencies, but it was killed (the second time around) after people said it would discourage seriously injured people from calling 911 and put an extra burden on residents who already pay taxes for those services.
