Cash strapped San Jose eyes hotel tax measure - San Jose Spotlight

"The City Council is set to review a proposed ballot measure Tuesday that would increase the city's so-called transient occupancy tax, levied on hotel guests, from 10% to 12% - a level that still falls below most other major cities. City officials estimate the hike would raise an additional $10 million in tax revenue each year. If advanced by councilmembers, it will go before voters during the June 2 primary election."

"Officials said the proposed tax increase stems from a broader effort to find new sources of revenue for San Jose, which has suffered regular deficits in recent years. "Over the past quarter-century, the San Jose community has struggled to reconcile its relatively low levels of revenue per capita with the day-to-day service level demands of a major city," Assistant City Manager Lee Wilcox wrote in a memo laying out the proposal."

"If the proposal makes it onto the June ballot, it will need a simple majority to pass. It would then take effect Oct. 1. San Jose's recently launched budget talks have added even more urgency to the hotel tax discussion. As city leaders work out a budget for the coming fiscal year, beginning July 1, San Jose faces a projected deficit of up to $65 million. The shortfall has raised the possibility of significant service cuts and employee layoffs."

San Jose leaders are considering a ballot measure to increase the transient occupancy tax on hotel guests from 10% to 12%. City officials estimate the 2% increase would generate about $10 million annually and be deposited into the general fund. Revenue could be used for public safety, homeless encampment management, park maintenance, and other city services. The City Council will review the proposal before possible placement on the June 2 primary ballot; the measure would require a simple majority and would take effect October 1 if approved. Filing deadline for June measures with the county registrar is March 6. The proposal responds to a projected fiscal-year deficit of up to $65 million that may force service cuts and layoffs.

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