June ballot to include single-use cup fee and hotel tax hike

The Santa Cruz County Board of Supervisors on Tuesday approved two items for the June ballot that, if approved by voters, will increase taxes on hotels and vacation rentals and change how fees on single-use disposable cups are used.

Supervisors also signaled support for a property tax assessment increase for property owners in the unincorporated county that funds solid waste infrastructure.

County Budget Director Marc Pimentel says the increases are necessary as the county reviews years of projected spending exceeding revenue for the next five years.

Transitional occupancy tax

The county last approved a Transitional Occupancy Tax (TOT) increase in 2012, when more than 72 percent of voters approved of its increase from 9.5 to 11 percent.

Pimentel said the proposed increase to 12% for hotels and 14% for vacation rentals is needed to fill a budget shortfall of $301 million for unfunded projects, as well as $29 million from the recent storm response and approximately $44 million for homeless service programs.

Revenues collected also fund forest fire prevention and response, street repairs and public health services.

Pimentel says the larger number offered for vacation rentals gives the county greater regulatory oversight and offsets the lower impact fees paid by landlords.

If approved, the increase would bring in about $2.3 million a year.

Pimentel said tourists are unlikely to be deterred by the higher tax rate when traveling to Santa Cruz County.

“We are a very attractive region,” he says.

Changes to stumpage fees

Supervisors also approved for the June ballot a change to the 25-cent charge levied on single-use disposable cups at businesses in unincorporated parts of the county.

Approved in 2019, the quarterly surcharge aimed to reduce the amount of waste entering fast-filling landfills. Originally slated to come into effect in 2020, supervisors postponed the fee until July 1 this year to ease the burden on businesses struggling with the Covid-19 downturn.

The fees were originally to be paid entirely to the companies. But if the county’s initiative is approved by voters, the costs would be split evenly between the county and the companies, with about $700,000 a year for the county.

These revenues would fund areas such as water quality, public health, marine life, in addition to public education and other general services.

County Public Works Assistant Director Kent Edler said efforts to reduce waste are critical, with the Buena Vista landfill expected to be full within eight years.

“We strive to do everything we can to reduce waste and extend the life of the landfill,” Adler said.

Property tax assessment

In another action, supervisors approved a property tax assessment increase in the unincorporated county that helps fund waste management services at the Buena Vista landfill.

The last valuation of $56.94 was approved in 1982 and has remained unchanged ever since. If approved by supervisors when they last review April 6, the assessment will increase to $110 per year.

Edler says a survey of two focus groups — a total of 30 people — indicated the increase would be reasonable.

The increase would be decided by a “protest vote” of Proposition 218, meaning that if the owners object, the item would be defeated.

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