Hotel tax increase resolution approved

The Morro Bay City Council is moving ahead with plans to restore about $160,000 a year for tourism promotion.

On Monday, the council approved a resolution to increase an added tax on hotel rooms to 3 percent from 2 percent.

The levy had been 3 percent until July 1, when an earlier assessment expired and it dropped to 2 percent.

The money goes to the city’s business improvement district and is earmarked for advertising to bring overnight tourists to the coastal town.

This type of change does not require voter approval because it is legally considered a fee or assessment.

On top of the levy to pay for tourism promotion, the city collects a 10 percent hotel bed tax that is used to help finance city government.

The 3 percent assessment was originally intended to last for one year to get the program started. But the success of the program prompted the council to keep it at 3 percent, Mayor Janice Peters said.

“They have done an excellent job on advertising,” she said. “We’ve stayed steady in a very down time.”

Since the year began, the council has considered several proposals to let the business improvement district’s assessment stay at 2 percent but increase the city’s motel tax by 1 or 2 percentage points instead.

However, some hoteliers resisted, and the proposals were dropped.

Monday’s approval of the resolution sets in motion a series of public hearings at which business owners subjected to the levy can protest the increase.

If the protests amount to more than half of the overall value of the assessments, the increase would be shelved for at least a year.

If approved, the increase would take effect Nov. 1 and would have to be renewed every year, Peters said.

Meetings to hear potential protests of the increase are scheduled for Aug. 9 and Sept. 13.

Reach David Sneed at 781-7930.