This piece is reposted verbatim from the Invest or Die blog from Palo Alto Online, with permission from Steve Levy, Director/Senior Economist at Center for Continuing Study of the California Economy (CCSCE).
The upcoming election will be full of both local and statewide election choices. Most attention in Palo Alto has been focused on the upcoming city council elections. But there is another choice on our local ballot (Measure B) that will directly support the quality of life and public safety in our city now and in the years to come.
Measure B will raise the transient occupancy (hotel) tax from 12% to 14% and provide approximately $31 million (roughly 25%) of the $126 million needed for the next round of infrastructure investments. The other 75% will come in roughly equal parts from 1) monies provided by Stanford as part of the agreement to expand the medical facilities, 2) hotel tax from the five new hotels currently planned and 3) monies in the city's infrastructure reserve, parking fees, city surpluses and other sources.
The latest details on the anticipated projects and funding are from the June 2, 2014 council packet.
The anticipated projects include a new public safety building and upgrades to two 60+ year old existing fire stations, more than $20 million bike lane additions and improvements, parks, and two new garages. The ballot statement in favor of Measure B signed by Ray Bacchetti, Penny Ellson, Sid Espinoza, Larry Klein, and Greg Schmid writes
"Measure B will:
• Ensure that Palo Alto's fire stations and public safety operations are seismically safe and continue operating after a major earthquake
• Provide safe sidewalks, paths and bridges for bikes and pedestrians, including safe routes to school
• Maintain city streets and roads, making dangerous intersections safer for all users
• Reduce neighborhood parking impacts by creating new off-street parking options
• Maintain city parks and recreation facilities"
The ballot arguments for and against Measure B.
I encourage city council candidates to weigh in on how they will vote on Measure B. To my knowledge there is no opposition among current council members or candidates but if I am wrong, please correct the record here.
I will be voting yes on Measure B after spending nearly two years working on the citizen's infrastructure committee and with the knowledge that the city has adopted nearly all of our recommendations and done so unanimously.
These investments mainly serve the residents. They maintain and improve our quality of life by taking care to upgrade and expand our public facilities much as we take care of our homes and possessions. And remember that today fire station personnel spend most of their time providing emergency medical response services, which can be improved with the fire station upgrades. To borrow a phrase current in the council campaign, these investments should be part of every "residentialist's'" campaign.
The ballot argument against Measure B signed by Jon Kiya, Chair of the PA Chamber, Russ Cohen, Director of the Downtown Business and professional Association, Barbara Gross, Manager of the Garden Court hotel and Tony Carrasco, a longtime Palo Alto architect also agrees that these investments are important. They write
"The business community believes that other, better ways can be found to fund the city's infrastructure needs. We stand ready to work with the Council and staff to explore the means by which those needs can be addressed. Increasing the TOT is not the answer."
They raise three arguments—1) the tax increase would cause corporate travel planners to move visitors to hotels in neighboring cities; 2) the ballot measure does not guarantee how the money will be spent and 3) the tax unfairly singles out one group to pay the tax.
I really do not understand the argument that local hotels would lose lots of business and that would, in turn, cause a loss in restaurant and other business in Palo Alto. People choose Palo Alto hotels for two reasons—1) they run good operations (like Barbara Gross at Garden Court) and provide excellent value and 2) the visitors are here for Palo Alto destinations like Stanford, local companies, family and the like.
The additional tax on a room rate of $150 is $3 and twice that ($6) for a room rate of $300 a night. If I am right that the destinations are local, why would a visitor or her corporate travel agent book into a hotel in an adjacent city like Mountain View, which would require more travel time and cost. Why would someone give up a convenient even walkable location to save $6 a night? And deal with traffic in El Camino and additional car rental or taxi costs?
And if the hotel tax is such a big deal (our tax is already at the high end), why are five new hotels about to start in Palo Alto?
The ballot measure does not guarantee that the money will be spent in a particular way on infrastructure but the council, again with unanimous votes most of the time, have been pretty clear. If there are candidates who do not support these investments, perhaps the choices could change so it is important for candidates to state their positions. The reason that the ballot measure does not list a specific set of investments is 1) the exact list could change by the time all the money is available and 2) that phrasing of the ballot measure would increase the required majority to 2/3 from 50%.
The fairness argument is interesting. It presumes as I read the argument that the tax falls on the hotels while I think the tax will fall mainly on the visitors. But there is no doubt that the hotel tax does not fall as much on Palo Alto residents as other choices such as an infrastructure bond or small sales tax increase. I suspect that many residents, having paid even larger hotel taxes while traveling in other places, won't mind having visitors pay a bit more for our infrastructure that they do use.
I would have voted to fund these projects if there had been a bond and I will vote to fund these projects under Measure B because we have been waiting too long to make these investments for ourselves and our city's future.