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LWV League of Women Voters of California
Smart Voter
Santa Cruz County, CA November 7, 2000 Election
Measure U
Transient Occupancy Tax Rate Increase for Homeless Shelter and Services
City of Santa Cruz

See Also: Index of all Measures

Information shown below: Official Information | Impartial Analysis | Arguments |

Shall the City of Santa Cruz adopt an ordinance amending Section 3.28.030 of the Municipal Code raising the transient occupancy tax rate from 10% to 12% and dedicating the revenues from the two percent differential to provide additional funding to non-profit homeless service providers for the provision of shelter services, including establishing permanent year-round shelter with appropriate facilities for homeless families and children?

Official Sources of Information
Impartial Analysis from the City Attorney
This ballot measure, if adopted by City voters, would amend the Santa Cruz Municipal Code by raising the transient occupancy tax rate from the current rate of 10 percent to 12 percent. The transient occupancy tax is a tax paid by hotel and motel guests who spend fewer than 30 consecutive days in a hotel or motel in the City. The tax is on the room rent paid. For example, a hotel guest currently pays $10.00 tax per night on a $100.00 hotel room. If the ballot measure is adopted, the hotel guest would pay $12.00 tax per night on a $100.00 hotel room. The ballot measure would further require the City to dedicate the tax revenue received by the City as a result of the tax rate increase to the funding of nonprofit homeless service providers for the provision of shelter services, including the establishment of a permanent year-round shelter with appropriate facilities for homeless families and children. In other words, 2/12 (16.6 percent) of the revenues generated by the transient occupancy tax would be used to underwrite services for homeless persons. 10/12 of the revenue (83.4 percent) would be deposited in the City’s General Fund and General Capital Improvement Fund and used by the City for the provision of municipal services to its residents and for the construction and maintenance of capital improvements. Currently 100 percent of transient occupancy tax revenues, computed at the rate of ten percent, are dedicated to the City’s General Fund and General Capital Improvement Fund. Because the proposed transient occupancy tax rate increase would be imposed for a specific purpose, the underwriting of homeless services, the ballot measure proposes a "special tax" as defined by Article XIIIC of the California Constitution. Accordingly, for the ballot measure to be adopted, it must receive a two-thirds "yes" vote.

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Arguments For Measure U Arguments Against Measure U
Homeless Shelter and Services

The quality of life in Santa Cruz depends on providing a safe environment for children. A Yes vote for Measure U will provide money to protect the most vulnerable children, those whose families are temporarily homeless.

Measure U will increase the Transient Occupancy Tax paid by tourists for rooms in local hotels and motels. The money will let Santa Cruz finally establish a year-round shelter serving the truly needy.

Families become homeless for many different reasons: job loss, high rent, or just plain mistakes by parents in crisis. Whatever the reason, their children are certainly the innocent victims of circumstances beyond their own control.

What can we do? Vote Yes on Measure U to provide a special shelter dedicated to families with children. Instead of mattresses on the floor in a room full of strangers, a family shelter will have the warmth, safety, and privacy a family with young children needs.

Will this really help? Santa Cruz can't solve homelessness on our own. But Measure U will allow our community to be compassionate without being wasteful. Measure U will put money right where it will help most. Services and shelter for families. The opportunity to bounce back and make a healthy future for innocent children. A chance for parents to protect their children with dignity and self-respect.

Will this hurt the local tourist industry? No. The increase in the hotel/motel room tax would increase the cost of a night's stay in Santa Cruz by one or two dollars. In our booming economy this painless increase wouldn't affect anyone's travel plans. Let's ask our visitors to make a small contribution toward breaking the cycle of homelessness in Santa Cruz.

Help families in crisis get back on their feet. Vote Yes on Measure U.

s/ George Ow, Jr., Businessman

s/ Geoffrey Dunn, Author/Activist

s/ Rowland K. Rebele, Consultant/Newspapers

s/ Neal Coonerty, Business Owner

s/ Maynard Manson, Housing Developer

Rebuttal to Arguments For
A SHELTER FACILITY for families with children IS NOT ASSURED if this measure passes. Don't be fooled by seemingly good intentions. Read the measure and you will find:

Measure U mandates spending for homeless SERVICES, NOT for a shelter FACILITY. Funds will go to general homeless services WITH NO GUARANTEE that any of the funds would actually go TO FAMILIES WITH CHILDREN.

Measure U permits REDUCED general fund SPENDING on existing homeless services.

The city council could LEGALLY REDUCE OR ELIMINATE current spending for HOMELESS SERVICES in order to fund one of its pet projects.

A 12% TAX WILL HURT SMALL BUSINESSES AND THOUSANDS OF EMPLOYEES who make up the hospitality industry.

The city council hastily placed this measure on the ballot without conducting even one economic impact study. Moreover, the council ignored research by the American Economic Group that confirmed increases in TOT could actually reduce city revenues and thus some services for its residents. This measure makes Santa Cruz non-competitive for valued overnight visitors. The nearby cities of MONTEREY AND SAN JOSE with expensive convention centers and airport facilities DO NOT TAX THEIR OVERNIGHT VISITORS 12%.



s/ Ted Burke, Local Restaurateur,Commissioner, California Travel and Tourism Commission

s/ Robert Barandas, Non-Profit Marketing Director,Seabright Resident

s/ Matt Twisselman, President, Beach Area Business Association; Owner, Twisselman Enterprises

s/ Michael Schmidt, Member, Santa Cruz Homeless Working Group

s/ Karen Darling, Bed and Breakfast Innkeeper,Vice President, Santa Cruz Lodging Association

VOTE NO on MEASURE U --- We are an intelligent and compassionate community. However, this 20% Tax increase was drafted without a guaranteed shelter or even a planned specific use. First suggested to fund livable wages for city employees, not this eleventh-hour proposal will fail like Westside MetroBase and ill-conceived "Sleeping Zones" in the Natural Bridges and Harvey West Neighborhoods.

DON’T KILL THE GOLDEN GOOSE --- Tourism and the Hospitality Industry are the largest private-sector employers and major revenue generators for our community. More importantly, they are also one of the largest employers of women and minorities. This year alone, Transient Occupancy Tax contributed nearly $3,500,000 to the City of Santa Cruz. An unwarranted Tax increase could threaten the ability to provide basic services for everyone.


Santa Cruz City Council: The council should kill its plan to increase the hotel tax.

"There are so many problems with this proposal that the council should apply the brakes on its careening ride to fiscal irresponsibility.

The council has misread the public will and is not serving its constituency….it wants to raise the hotel tax from 10 percent to 12 percent, a 20 percent increase (not 2 percent, as the council falsely claims.)

The hotel tax proposal is being rushed through the city process… That’s no way for a responsible body to act. Democracy just can’t be rushed."

Santa Cruz Sentinel, 7/25/2000.

WE DESERVE BETTER --- We deserve a council that listens to the local community. According to the recent City of Santa Cruz survey, our two most pressing problems are: Traffic and Affordable Housing. The council should address these top priority matters first. Let’s bring people together to solve our problems --- not pit them against one another. Please help send a message that we deserve better government.


s/ Lorette Wood, Former Mayor of Santa Cruz, Director, Goodwill Industries

s/ Bob Munsey, Owner, Crow's Nest Restaurant; Past President, Santa Cruz Harbor Business Association

s/ Pattie Carta, General Manager, Westcoast Santa Cruz Hotel; Board Member, Santa Cruz County Lodging Association

s/ Bruce Morse, Vice President, Local 270 Laborers' International Union of North America, AFL-CIO, Retiree Council

s/ Alice Ponza, Co-Chair, COLAB Coalition of Labor-Agriculture-Business

Rebuttal to Arguments Against
Don't be misinformed by the special interests opposed to Measure U.

Measure U is a pay-as-you-go approach to providing a service desperately needed by more than 300 Santa Cruz families a year. A recent study by the United Way found that more families are in need than ever before. Most homeless families are not transient but have lived in Santa Cruz for at least five years. And most of them have jobs!

Many California cities currently tax hotel rooms at 12 percent or even higher, and none of them have lost tourist business as a result.

Every penny raised by this tax is guaranteed to be used to fund homeless services, including, but not limited to shelter. An oversight committee, including a member of the tourism industry, will ensure that these dollars are used for these purposes.

The current economic boom has pushed the cost of basic housing beyond what many working people can afford, and many families live only one paycheck away from homelessness. Measure U will raise the average night's stay in Santa Cruz by less than $2.00 but will return dignity, hope and health to families in crisis. We can not ask for a better return.

The opponents are using this issue for their own political gain. Let's get back to the real point: providing a permanent, year-round shelter for homeless families with children. Measure U is something the people of Santa Cruz can do for families in crisis, without playing political games.

Preserve the quality of life in Santa Cruz. Vote Yes on Measure U.

s/ Don Hubbard, Chairman of the Board of Directors, Harvey West Area Association

s/ Chris Johnson-Lyons, Executive Director, Community Action Board of Santa Cruz County, Inc.

s/ Lois R. Muhly, Retired Teacher

s/Jane Weed-Pomerantz, former Mayor of Santa Cruz

s/ Kaitilin Gaffney, Program Director, Center for Marine Conservation

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Created: January 25, 2001 02:34
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