City Council to place hotel tax increase on March 3 ballot

The Long Beach City Council agreed Tuesday night to take steps to place a ballot question before Long Beach voters in March that could raise the tax rates charged to hotel guests in the city.

A proposed permanent 1% transient occupancy tax (TOT) increase could generate about $2.8 million annually, according to city officials—money that they say is desperately needed for infrastructure investment at the Long Beach Convention Center and struggling arts organizations.

The city’s TOT tax is currently 12% and applies to all hotel, motels and short term rental units like Airbnb, something the city has recently begun regulating. The estimated revenue would be split by the convention center and by arts groups throughout the city, according to proposed ballot language.

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Repairs at the building—set to house the California Democratic Party Convention this weekend—are estimated at over $50 million. According to acting City Manager Tom Modica, those are “bare bones’ investments which could range from lighting to air conditioning to replacing seats inside the Long Beach Arena.

The convention center, officials say, will play a large role in the city’s ability to host events during the 2028 Summer Olympics.

If the tax were to be approved by voters, it would raise hotel tax rates by about $1.80 to $2.00 per night. The impact of the tax would not be directly felt by Long Beach residents unless they stay in a hotel, motel or short-term rental unit within the city.

“Even though that’s a small amount to the individual paying that tax, it actually does add up because we do have a lot of people staying in our hotels,” Modica said.

Modica stressed that even with a potential increase, the city would still remain competitive with surrounding cities’ hotel rates; stays in Long Beach, he said, are about $100 less per night than other areas.

Several members of the arts community pushed for the council to place the question on the March 3 ballot, stating that the return on investment would far outweigh the small impact shouldered by hotel guests.

“The funding would be transformative for all of us,” said Kelly Lucera, president of the Long Beach Symphony. “Instead of panicking on a day-to-day basis about making payroll, we’d be able to take that time and energy and resources and further invest it into this great community by providing more free programs for all demographics in our community.”

Lucera said that while she ran a budget of about $3.2 million last year, the symphony struggled to stay in the black. She said at the end of the year it finished with a $9,000 surplus due in large par to the city’s “Percent for the Arts” program, an initiative pushed by Mayor Robert Garcia in 2016 that assesses a 1% fee to capital improvement projects with that money helping to fund local art programs.

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Mayor Robert Garcia called the opportunity to boost revenue for these two areas of the city a potentially transformational way that the city could support the tourism economy of Long Beach, particularly the struggling arts sector.

“For our art institutions to  succeed there has to be public investment,” Garcia said. “The truth is we shouldn’t look at the arts as a private enterprise, and arts should not be expected to turn a profit to succeed or to maintain themselves. The arts are what we call a public good and all programs and folks that work toward the public good know that there has to be government and public investment for those organizations to succeed.”

The ballot language is expected to come back before the City Council in the next few weeks for final approval as the Dec. 6 deadline to submit paperwork to the county quickly approaches.

The measure would need a simple majority to pass.

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Jason Ruiz covers City Hall and politics for the Long Beach Post.