Politics & Government

Should Foster City Increase the Hotel Room Tax Rate?

A letter from Foster City Mayor Linda Koelling on how the additional annual revenue from passing Measure P, which raises the hotel room tax rate to 9.5 percent from 8, could benefit the City and prevent future spending cuts.

By Foster City Mayor Linda Koelling

The winds of change are truly upon us. Everywhere you turn, political rhetoric is gloom and doom - and, in some cases, it may well be.

Aren’t you glad you live in Foster City? This well planned, well maintained community continues to be on a steady, financial path for the future. The council, along with City staff, have correctly ridden the wave of economic uncertainty for several years now, and steered a steady course of continued financial stability. This has not been an easy task, but we have reacted quickly to attack the deficit and moved responsibly, carefully outlining budget policies to eradicate this structural deficit without using our reserves by a set date. We’ve created a good balance of cutting expenses and creating revenue opportunities.

The City Council felt that one of the opportunities for additional revenue will be able to come from our two hotels, the Crowne Plaza and the Marriott Courtyard. Each year, the city receives revenue from a room tax that guests pay when they stay at these hotels. Currently, the room tax is 8 percent, a rate which was put into effect by Foster City in 1981. Fifteen of the cities in San Mateo County have hotel tax rates at 10 percent or more, and eight of those 15 cities - such as San Mateo, Burlingame and San Bruno - have hotel tax rates of 12 pecent.

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Foster City's [proposed hotel room tax rate increase to] 9.5 percent  will still be the lowest in all of San Mateo County, still giving our hotels the edge. Since this increase does not adversely affect the residents of Foster City, the council voted to place Measure P on the November Ballot.

Services like police, fire, street and streetlight maintenance, and parks and recreation serve not only our residents and local businesses, but also those who stay in our hotels. While the costs of providing those services have risen, the hotel tax has remained at 8 percent since first adopted in 1981.

The proposed increase, which requires voter approval of Measure P, will raise approximately $250,000 per year in much-needed additional new revenue. We have carefully chipped away at the city’s structural deficit as the city has eliminated 10 percent of its workforce, trimmed $2 million in spending, and negotiated reduced pension benefits with its police officers and firefighters. Going forward, our very capacity to create new resources and opportunities must be, first and foremost, to provide an efficient economy and provide revenues for essential services so we are not facing deeper cuts in those services.

I want to emphasize that Measure P, as it will show on the voter ballot in November, applies only to those staying at hotels or motels in our city. It has NO impact on Foster City homeowners or renters. Voting YES ON MEASURE P means these visitors will pay their fair share of the costs for the police, fire, and other essential services they rely upon.

We live in difficult economic times, and the governing policies we have set forth are in place to protect our city, maintain its vitality and preserve its environment for the future. I am gratified to know that the Foster City Chamber of Commerce and both hotels in Foster City, the Crowne Plaza and the Marriott Courtyard, all understand and support raising the Transient Occupancy Tax, or hotel tax rate, to 9.5 percent! They understand that we are all in this together and it takes a team effort to get over the tough times. They understand what Measure P will mean for Foster City.

Yes, we live in a great community, and I am honored to be serving at this time.

I appreciate your comments on this and other issues. E-mail lkoelling@fostercity.org.

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