Measure C Asks San Diego Voters To Approve New Hotel Tax
San Diego’s tourism industry is hoping to convince city voters to approve a tax hike to raise money for a major convention center expansion, homelessness and road repairs.
The Yes on Measure C kickoff event happened across the street from the San Diego Convention Center last December with cheers and applause.
Tourism officials, politicians and union workers hailed the potential economic windfall of a new hotel tourist tax that could raise billions.
The money would go for convention center expansion, homeless programs and street repairs.
“I’ve been involved in a lot of campaigns and ballot measures,” said San Diego Mayor Kevin Faulconer. “I have never seen a more diverse and stronger coalition that cuts across all portions of San Diego because we need this funding source. We need a permanent source of funding for homeless services. We need to expand our convention center and the dollars this will mean for road improvement. These are the issues San Diegans care about.”
Faulconer has long pushed for a convention center expansion, but several attempts to make it happen in recent years have failed.
Just getting this measure on the ballot stumbled two years ago when a petition drive failed to collect enough valid signatures. Faulconer said the city deserves this chance.
“It’s the first time it is actually going to be on the ballot. And I think that’s why you’re seeing so much enthusiasm,” Faulconer said.
Measure C asks voters to boost the city’s hotel room tax from 1.25% to 3.25% depending on how close a hotel is to the convention center.
“Which is a tax that visitors pay when they come to stay in San Diego and they stay in one of our hotels,” said Carol Kim, a member of the convention center board and the Building and Construction Trades Council.
Kim said the tax hike could raise more than $6 billion over the next four decades.
“We’re telling voters upfront,” Kim said. “We’re saying, 'we’re not just going to raise this tax and let anybody do what they want with it.' We’re going to raise this tax and spend it specifically on three things. Three specific buckets: The convention center expansion, homelessness, streets, and roads.”
But that plan doesn’t sit well with everyone.
Community advocate Donna Frye wants city residents to remember they are voting on a new tax and voters are getting only limited input on where the money will go.
“If you had a billion dollars in new tax revenue, do you think the best use of that would be to expand a convention center? Or do you think that it should be used for other purposes?” Frye said.
The bulk of the money raised by the hotel tax, 59%, will pay for the convention center expansion and then the operation of the facility.
Frye called that a huge, ongoing tax subsidy.
“What they’ve done is they’ve tried to combine it, the hotel guys have tried to combine it with homelessness and roads,” Frye said. “And make it sound like it’s really for homeless people when there is no guarantee, there is absolutely nothing in the measure that says any housing will be built for the homeless.”
The measure does not outline how any of the money raised for homelessness will be spent, instead, it relies on the city council to decide whether it will fund services or housing or some combination of the two.
San Diego Tax Fighters founder Richard Rider shares discomfort with the measure.
San Diego already has too many taxes on the books, he argues. And Rider is not a fan of bundling issues together.
“Levy a tax. Let the voters decide on that tax based on what it is being used for,” Rider said. “You want to have a separate tax for the homeless? OK. Put a separate tax for the homeless on the ballot. Don’t try to fool people into thinking this will pay for everything. It won’t.”
The tax will create billions in new revenue for the city, but Rider worries city officials are playing a shell game.
By creating dedicated revenue streams for the convention center, homelessness and road repair, the city frees up general fund money.
“We spend a tremendous and ever-increasing amount of our money on pensions, so when we spend more money on the homeless here, it frees up money for what government’s No. 1 priority is, which is paying for the pensions and retiree health care,” said Rider.
Because Measure C is a dedicated tax increase, the ballot measure needs a two-thirds majority vote to pass.