Efforts terminated to raise Tourist Occupancy Tax by 2% in South Lake Tahoe

SOUTH LAKE TAHOE, Calif. - South Lake Tahoe City Council voted 4-1 on Tuesday to terminate efforts to create a ballot measure to raise the Tourist Occupancy Tax (TOT) by another two percent. A vote to prepare the measure for the ballot would have needed to get started to make it to the November ballot.

Revenues generated would go into the General Fund with the instructions they'd be used toward roads, police, fire, and housing.

Many residents spoke about the proposed tax increase on lodging properties. An increase would put South Lake Tahoe among the top ten percent highest TOT in the country. On November 8, 2016, residents within the City of South Lake Tahoe voted to support recreation by passing Measure P, which increased the TOT by an additional two percent. Lodging in the tourist zone now pays 14 percent per night TOT, and the rest of town 12 percent.

Many expressed their feelings that South Lake Tahoe is at the tipping point for any extra taxes put on the backs of a tourist given that the current economy is feeling the effects of rising prices, lower tourist dollars to spend, and an increase in day trips. among others.

The South Lake Tahoe lodging industry spokesperson Jerry Bindel said visitors would most likely choose other areas in the Lake Tahoe Basin to stay as their room rates would be less with a lower tax. He said a rise in the TOT would be "risky" as the new recreation center bond repayment is based on revenues from the last two percent TOT increase. If trips go down, the TOT goes down, and repayment would have to come from the general fund.

The lodging industry and chambers of commerce were both behind Measure P because of the benefits it provided the community with the new recreation and swim center. It would have been highly unlikely the same support would be there this time around.

"We can get together and come up with affordable housing solutions without taxing second homeowners or visitors," said Bindel.

Before the next time a discussion on an increase to the TOT comes before the Council, it was suggested the city do an economic study to get to understand the effects.

"The local economy is a delicate balance with fuel, food costs, utilities, and insurance," said Sharon Kerrigan of the South Tahoe Association of Realtors. "Don't kill the goose that lays the golden egg."

Local good governance advocate David Jenkins said he wants to see the city government and community to be successful economically, but raising a TOT in this economy is not the best move.

"Need reports that show the impact and have the materials needed before getting this on the ballot," said Jenkins. "Have all the information of possible impacts available. I want our community to be prosperous."

Job and business growth are both possible without raising taxes, he said.

"We want affordable housing for working locals and seniors in need and there are options for funding that do not require tax increases. We can produce reasonable options if allowed to do so," said Jenkins.

"This is not the right time," said Councilmember Cristi Creegan. Councilmember Tamara Wallace agreed, saying it would have a detrimental impact on the community.

"We need to move forward together as a community," said Mayor Pro Tem John Friedrich. "It is important to have consensus on Council and community to figure out the best way forward."

"We are at a very volatile time," said Mayor Cocy Bass. "I think it's a great time to take a pause and look at what we have and areas to find revenue."

Councilmember Scott Robbins was the lone dissent.