City of South Lake Tahoe to get a pulse from community on possible tax increases

SOUTH LAKE TAHOE, Calif. - The City Council voted 4-1 Tuesday night to hire a polling firm to get an accurate pulse on the South Lake Tahoe community on possible tax increases through transient occupancy tax (TOT) and a real estate transfer tax via the initiation of becoming a charter city.

The vote is only to get opinions from the public and isn't approving any tax increases. Funds raised through any increase would go to housing, transit, and snow removal equipment though having a specific benefit area would have to pass by a two-thirds vote on the ballot, while funds going to the general fund only need to pass by 50 percent plus one.

Speakers at the meeting were overwhelmingly in favor of no tax increases through transfer taxes and TOT.

Jerry Bindel of the South Lake Tahoe Lodging Association was a big proponent of the last two percent TOT increase in 2016 through Measure P. He said South Lake Tahoe would be in danger of pricing itself out of a viable holiday market for people as the TOT would be higher than other destinations like San Diego, Napa, North Lake Tahoe, Truckee, Carmel, Los Angeles, Douglas County, San Francisco. Bindel said local businesses and lodging properties would resist, and their association is already looking into other funding options that wouldn't require tax increases.

"Not the way to achieve what we want," said Bindel of a two percent increase. "It is not the time to experiment with a 16 percent occupancy tax."

The current TOT is 14 percent in the tourism core, and 12 percent in the rest of the city.

"Taxing shouldn’t always be the first choice," said David Jinkens. "I'm disappointed [you're] not looking at alternative funding sources."

Besides the TOT, the Council discussed South Lake Tahoe moving from a general law city to a charter city. Councilmembers Cody Bass and Scott Robbins formed a committee to evaluate a charter city, but they had only met twice before Tuesday's meeting.

"We are concerned that changing to a charter city is rushed," said local Realtor Shannon Witt. "We need a transparent analysis, a stakeholders groups, and a detailed and thorough process."

Before any tax goes to the voters the City said there will be several public meetings and educational materials so they understand what is before them.

David Peterson said he believed any transfer tax would discourage downsizing, though he was in support of a snow removal tax. Property owners in the City have paid the same $20 on their property taxes since its inception in 1989, and it does not go as far in 2023.

Councilwoman Tamara Wallace is not in favor of any new taxes in order to give taxpayers a break. In the last five ballots, the City has had five tax increase proposals with three passing.

"Based on what we see at the store, and public comment, the economy is pretty harsh right now," said Wallace. "I think we need to give the voters a break. I am all for housing, for transit, but we need to bypass this general election."

She said they need to find other ways to raise funds instead of taxes.

Another proposal that was discussed was a vacancy tax, one that taxes owners of vacant homes in order to either raise money for affordable housing or urge second homeowners to rent to locals.