At its July 5 meeting, the City Council voted to increase Alameda’s Transient Occupancy Tax (TOT), also called Hotel Tax, from 10% to 14%. The change is subject to voter approval. The approval vote will now place a measure amending Alameda Municipal Code Chapter 3-61.3 (Tax Imposed), increasing the TOT, on the Nov. 8 General Election ballot.

The motion passed 3-1 with Mayor Marilyn Ezzy Ashcraft, Vice Mayor Malia Vella and Councilmember Tony Daysog voting in the affirmative, and Councilmember Trish Herrera Spencer voting against the resolution. Before discussion on the item, Councilmember John Knox White recused himself due to personal reasons.

Discussion began with a presentation from Alameda Special Counsel Michael Roush describing the measure and its effects. City Financial Director Margaret O’Brien was also present to answer questions from the council.

The presentation highlighted the staff recommended plan to increase the TOT from 10% to 14% would be imposed upon guests at hotels, motels and short-term rentals, such as Airbnb guests. Roush stated that the rate had been 10% since September 1990, and the change would bring an estimated increase of $700,000 to $900,000 annually to the city’s General Fund. The city has received just under $2 million a year on average over the last four fiscal years, according to Roush. This includes the fiscal year 2020-2021 when the city received only $1.2 million in TOT revenue, according to O’Brien. She added that the TOT has increased to pre-COVID 19 levels in the 2021-2022 fiscal year.

Roush mentioned that neighboring cities had tax rates of 14% (Oakland and San Leandro) and 12% (Berkeley and Emeryville).

Two members of the public spoke at the meeting. One supported the plan saying hotel taxes were a good way to increase the city’s General Fund, while the other mentioned that the hospitality industry had been severely impacted by the pandemic, and an increase in the TOT might be too much for the recovering economy. The Alameda Chamber and Economic Alliance also opposed the potential TOT increase. Stating in a letter to the City Council that it would negatively affect tourism expansion and encouraged the council to seek input from the local community Alameda hoteliers.

During council discussion, Spencer stated that she was against implementing the increase as she felt it was not “the right time to take this to the hospitality industry” since past revenues had significantly reduced during the pandemic and the industry “still has to make up for it.”

Vella felt the economy had almost fully recovered and based on the average revenues in the past years, believed that the “hotel industry has done really well in Alameda.” She also pointed out that the other cities near Alameda had a hotel tax of 14%, and Alameda should follow suit. Similarly, Ashcraft was supportive of the plan, as she emphasized that the tourists and lodgers would pay for the benefits received in the city’s essential services. She stated that there was “no justification” for the TOT to be lower in comparison to other cities and increasing it would “benefit residents.” Daysog was also supportive of the staff recommended plan, stating that having a lower hotel tax than neighboring cities does not give Alameda any advantage and the city was “leaving money on the table.”

Vella and Daysog will serve on the council sub-committee to draft an argument in favor of the ordinance ahead of its presentation on the ballot. Spencer will draft an argument in opposition to the plan, and both sub-committees will also present rebuttals.

Before the election, the city will conduct outreach to voters in the form of mailers and web content. The extra funds from an increase in the TOT will help further finance city services such as maintaining 9-1-1 emergency response times, supporting fire/paramedic/police departments, repairing potholes and deteriorating streets, and maintaining clean and safe parks and beaches.

To reach Nandini Sharma, contact editor@alamedasun.com.