LWV League of Women Voters of California
Smart Voter
San Joaquin County, CA March 5, 2002 Election
Measure N
Transient Occupancy Tax
City of Tracy

4,742 / 68.3% Yes votes ...... 2,203 / 31.7% No votes

See Also: Index of all Measures

Information shown below: Impartial Analysis | Arguments |

Shall the City's transient occupancy tax, imposed on transients and used by the City's General Fund to fund a variety of activities, including: police and fire services, tourism promotion, planned cultural arts center activities, and parks and recreation youth and senior activities, be set at 10% of the amount of rent charged by the hotel operation?

Impartial Analysis from City Attorney
The City of Tracy currently collects a transient occupancy tax, also known as a "bed tax," from transients (those occupying hotel rooms within the City of Tracy for fewer than 30 days). The transient occupancy tax is currently charged in the amount of 10% of the cost of the hotel room. The transient pays the tax to the hotel and the hotel remits the tax to the City of Tracy. The City of Tracy deposits transient occupancy tax revenue into its General Fund, which supports a number of City services, including police and fire protection and youth and senior recreation activities. A complete description of the transient occupancy tax is located at sections 8.08.140 and following of the Tracy Municipal Code, which is available on the City's website at "http://www.ci.tracy.ca.us."

In December of 1990, the transient occupancy tax was increased from 6% to 10% of the hotel room charge by City Council-adopted ordinance. Because transient occupancy tax revenue is deposited into the City of Tracy's General Fund, the tax is considered to be a general tax. At the time of the tax increase in 1990, voter approval was not required for general tax increases. Proposition 218 required that any general tax imposed, extended or increased from January 1, 1995, through November 6, 1996, receive voter approval. Given the language of Proposition 218, it was determined that general tax increases adopted before January 1, 1995, did not require voter approval. However, since that time, court decisions have created uncertainty as to whether a general tax increased over ten years ago now requires voter approval. Because transient occupancy tax revenue supports a variety of essential City services, the City of Tracy has deemed it prudent to place the tax on the ballot for voter approval. City staff estimates that a reduction in the transient occupancy tax would result in a loss of approximately $300,000 a year to the City's General Fund. This is approximately two percent of the City of Tracy's annual General Fund tax revenue. By putting the transient occupancy tax on the ballot, the Tracy City Council seeks voter ratification of this general tax in the amount of 10% of the hotel room charge. If ratified, the City's current transient occupancy tax in the amount of 10% of the hotel room charge will remain in place. No change to the City of Tracy's Municipal Code implementing the current transient occupancy tax will be necessary.

Adoption of the proposed measure (Measure "N') will continue collection of the City's existing transient occupancy tax at the rate of 10% of hotel room charges.

The above statement is an impartial analysis of Measure "N." If you desire a copy of the measure, please call the Tracy City Clerk at 209-831-4113 and a copy will be mailed at no cost to you.

 
Suggest a link related to Measure N
Links to sources outside of Smart Voter are provided for information only and do not imply endorsement.

Arguments For Measure N
This ballot measure is not a tax increase. The measure requests voters to ratify the existing Transient Occupancy Tax (TOT) of 10% for the City of Tracy. The TOT is a "bed tax" paid by visitors to Tracy when they rent a hotel room. Most cities in California have a TOT and a rate of 10% is most common.

One hundred percent of the revenue from the TOT in Tracy goes into the General Fund and is used to support Police and Fire operations, and recreation programs for youth and seniors. If Measure N were not approved, the City would lose about $300,000 per year in revenue. This is the equivalent of the cost to employ 4 police officers or to pay for the operations of the library and all senior programs for a year.

Unlike many other cities, Tracy does not tax its citizens or business owners a "Utilities Users Tax". Tracy does not have a "Gross Receipts" or "Mill Tax" on business activity. Many cities supplement their General Fund with these taxes. Since Tracy does not have these taxes, it is very important to continue the TOT to help pay for public safety and recreation programs in our community.

Whenever Tracyites travel on business or pleasure, we pay a "bed tax" in the communities we are visiting. These communities use the tax we pay as visitors for the benefit of their own citizens. If Tracy did not have an equivalent "bed tax", then we would pay this tax wherever we travel, but our city would not receive any like benefit. To be fair to our citizens, Tracy needs to maintain its TOT for those visiting our city, just as we pay when visiting other places.

We ask you to join us in voting "Yes" on Measure N.

Submitted by:

/s/ Ray McCray, City Treasurer
/s/ Kathy Mast, Registered Nurse, Eaton Medical Plaza
/s/Judy Griffith, 2001 President, Tracy Chamber of Commerce, Uniglobe West Valley Travel
/s/John Day, President, Downtown Tracy Business Improvement Area

(No arguments against Measure N were submitted)


San Joaquin Home Page || Statewide Links || About Smart Voter || Feedback
Created: April 19, 2002 10:59 PDT
Smart Voter <http://www.smartvoter.org/>
Copyright © League of Women Voters of California Education Fund   http://ca.lwv.org
The League of Women Voters neither supports nor opposes candidates for public office or political parties.