Peninsula cities pushing for increase in hotel taxes 

Two Peninsula cities hope to cash in on the rising number of visitors to the county by boosting the tax they charge hotel guests.

If voters pass ballot measures in November, each by a simple majority, Redwood City’s transit occupancy tax would rise from 10 to 12 percent, and Foster City’s from 8 to 9.5 percent.

Foster City remains the only municipality in San Mateo County that charges a hotel tax of less than 10 percent.

The county gets about 2 million visitors every year, and that figure is on the rise.

San Francisco International Airport reported a 4 percent increase in air traffic in 2010, adding 1.6 million travelers, according to spokesman Mike McCarron. Even more visitors are expected in 2012 for the U.S. Open and America’s Cup.

Area hotels have seen a 10 percent increase in occupancy and an 8 percent increase in room rates from a year ago, said Anne LeClair, president of the San Mateo County Convention and Visitors Bureau.

Since 2008, eight of the county’s 20 cities have increased their hotel tax while more-substantial revenue streams, such as property taxes, have fallen.

Foster City’s hotel tax has not changed since 1981. Both hotels and the Foster City Chamber of Commerce say they support the increase.

Hotel taxes are the city’s third-largest revenue source, and increasing the rate would raise an additional $250,000 annually, said City Manager Jim Hardy. The additional tax would help pay for police, fire services, parks, street upkeep and maintenance of the lagoon and levee.

In Redwood City, the hotel tax hike was proposed by the City Council with the aim of reducing a
$2.6 million structural deficit brought on by increases in employee costs and operating expenses, said city spokesman Malcolm Smith.

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