Expenses might increase for the recovering hotel industry if voters approve a plan to hike the city’s hotel tax for the first time in almost three decades.
This week, a divided City Council voted 3-2 to move forward with a measure on the November ballot that would raise the transit occupancy tax from 8 to 10 percent.
The city has two hotels — the Crown Plaza and Courtyard by Marriott — and Mayor Linda Koelling said officials need to find new ways to generate income, and the hotel tax has not changed since it was established in 1982.
The increase from 8 percent — which city officials say is the lowest such rate on the Peninsula — to 10 percent would bring in an extra $300,000 for Foster City, which currently receives about $1.3 million per year from the tax.
“With the unknowns coming down from the state, it’s time that we put it on the ballot and see what the voters of Foster City say,” Koelling said.
Also, Koelling said officials are looking to make cuts in the face of a $5 million deficit in the current year’s $27.7 million budget.
But Councilman Rick Wykoff — who, along with Charlie Bronitski, voted against advancing the tax — said the city has not cut enough to justify presenting voters with the tax. He sees it as “taxation without representation” since it mostly affects out-of-town visitors.
“I’m really not a big believer in taxing unless you have some reason to present it to the taxpayers,” Wykoff said. “I feel there are areas in our budget that could be eliminated before there is a need for that tax.”
While the council expressed support for the plan, it still needs to hold a public hearing and formally submit ballot language to the elections office before mid-August. The measure would need approval from a simple majority of voters.