Hotel, cup taxes to become ballot measures in Santa Cruz County – Santa Cruz Sentinel

SANTA CRUZ — On June 7, Santa Cruz County voters will be deciding on whether they support a hotel tax inrease and a new single-use cup tax.

Through unanimous votes from the Board of Supervisors on Tuesday, the future measures will be on ballots so long as the Auditor-Controller-Treasurer-Tax Collector and County Counsel meet the requirements of submitting an independent analysis as a piece of resolutions calling for each election .

Together, the taxes could raise an additional $2.4 million a year for the county.

Ensuring intentionality

The county’s transient occupancy tax, currently lower than other local jurisdictions, collects funds in unincorporated county that help to protect county resources — including its infrastructure. Staff shared that as of January, a forecast has shown an increased gap in the coming fiscal year but slightly smaller future budget gaps after the FY 2025-26.

Federal Emergency Management Agency funding delays, specifically, have hurt the county’s revenue and left it in a position of department reductions and other negative impacts to sustain reserves — unless more revenue is raised. The coronavirus crisis, the CZU Complex fire and past limited funding to fulfill much-needed updates only make the fiscal mountain steeper, staff alludes in its report.

Board Chair Manu Koenig, the 1st District supervisor, was in favor of contributing toward the general fund but expressed a desire to set aside at least some of the proposed 12% tax on traditional lodging establishment stays and 14% tax on vacation rental stays toward giving residents “a fair shake.”

“I have received complaints that the Citizen Connect App is not up to date with the most recently approved vacation rentals,” Koenig said as an example of grievances of his constituents who live near one or more vacation rentals. “(I fear) that funds will get sucked into meeting the basic needs of the county budget … We need to address concerns around vacation rental regulations and neighborhood impacts.”

Supervisor Ryan Coonerty commented that the financial deficits discussed is just one example of the uncertainties Santa Cruz County has come to experience in the last two years.

“The reality is our world is becoming much more complex and while the county is looking at resilience from an infrastructure point of view, it’s also frankly important we are resilient from a financial point of view to be able to respond to emerging needs that will be occurring on a much more regular basis,” he said. “Building in some of these taxes can provide that resilience in our budget … is important.”

Taxing toxins

If voters allowed the county to turn its single-cup charge enacted earlier this year into a tax, from which half of each fee would be given to the county and the other half to the vendor, the county would have hundreds of thousands of dollars to invest in waste reduction and environmental programs. An excess of trash is a huge issue in Santa Cruz County, with the landfill to reach capacity within the next eight years, explained Assistant County Administrative Officer Nicole Coburn and her colleagues.

“We would be using this to fund programs such as protecting clean drinking water sources,” Coburn gave as just one example, offering others such as cleaning and maintaining local beaches. “All funding would remain local to Santa Cruz County and we would be reporting on these funds as part of our annual auditing process.”

Supervisor Zach Friend, who has supported the delay of such a tax in the past because of the safety and economical pressures of the COVID-19 pandemic, thanked staff for dealing with his “dogmatic” attitude. Being able to split the responsibility of administering the cost between the county and businesses rather than, say, leaving it to a small business, creates a new revenue stream for those businesses and taxes materials that have been damaging the county’s natural resources.

“As I’ve said previously, I think that most people that pay the single use fees believe that the money does go back to local jurisdictions for programs exactly like this and I think would be surprised to learn that that’s not the case,” Friend said. “There’s no question that Public Works and others could use additional funding in regards to wildfire resilience, pollution control (and) syringe services. These are all things that do not have a dedicated funding stream.”

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