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San Diego hoteliers could potentially raise hotel-room taxes by an estimated $2 billion over the next four decades to boost tourism promotion and expand the Convention Center. Mayoral candidate Bob Filner isn’t happy about it.
Filner takes every chance he gets to denigrate the deals, which have the strong support of his opponent, Carl DeMaio. Filner argues that the public should vote on tax increases, rather than just hotel owners.
At a debate Wednesday, however, Filner went a step further. He said multiple times that the city should redirect the money generated by one of the fee increases, a 2 percent surcharge on visitors’ hotel bills.
“I would put half of that into public safety and not give it all to hotel advertising,” Filner said.
But Filner’s idea will not work — at least not without a lot more details.
Hoteliers are in the process of voting to renew this surcharge, which is set to expire at the end of the year. It’s expected to raise $30 million annually to market the city and promote tourist-targeted events, such as college football bowl games and the Rock ‘n’ Roll Marathon.
The hotel industry and the city spent more than a year trying to figure out how to make this surcharge legal without a public vote. Key to those efforts is a direct connection between the surcharge and a benefit to the hoteliers. So even though the surcharge appears as a line item on guests’ hotel bills, it’s the hotel owners’ legal obligation. Hotel owners would then receive the benefit of more people staying in their hotel rooms as a direct result of greater spending on tourism promotion.
This link between the surcharge and the benefit, supporters say, makes the charge a “fee” not a “tax.” Even this methodology looks ripe for a legal challenge on the grounds that it would be considered a tax increase without a public vote.
These legal restrictions mean that Filner can’t redirect the money from the 2 percent surcharge to the city’s police or fire services.
“I don’t think it would ever meet the test of the connection,” said city Independent Budget Analyst Andrea Tevlin.
City Attorney Jan Goldsmith said it might be possible for a small amount of money from the surcharge to pay for security at a hotel. But that’s it.
“I don’t see how you’d be able to do that,” Goldsmith said of redirecting the money to public safety. “Because then it essentially becomes a tax, which the [surcharge] is not promoted as a tax.”
Filner might be able to use some money from the surcharge to ease other burdens on the city’s day-to-day budget. That could help public safety services indirectly. The original surcharge, which began in 2008, was sold as a way to relieve the day-to-day budget of marketing expenses. Filner could try to find other things the city budget funds that could be considered marketing and try to shift those payments to the hotel-room surcharge.
But it’s on him to explain how he’d do that. I asked Filner’s campaign spokeswoman on Wednesday how Filner plans to make his idea happen, but haven’t gotten an answer yet. I’ll update this post if I do.
Liam Dillon is a news reporter for Voice of San Diego. He covers San Diego City Hall, the 2012 mayor’s race and big building projects. What should he write about next?
Please contact him directly at firstname.lastname@example.org or 619.550.5663.
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