Chamber rejects Rodoni tax increase

04/12/2018

The West Marin Chamber of Commerce will lobby against Supervisor Dennis Rodoni’s proposed transient occupancy tax hike, following a heated meeting of the chamber last week. The vote to oppose the proposal—supported by 29 of the 36 members who participated—reflected the belief that short-term rental operators and their customers are being unfairly blamed for a community-wide problem.

Though some chamber members spoke in support of the tax increase, which would generate funds for affordable housing and emergency services, the chamber’s president, Frank Borodic, said the group had to step up if it wanted to protect its interests.

“We need to get more powerful as a chamber,” he said. “The meek do not inherit the earth. We’ve stuck our foot in the door and now we have to figure out how to open that door.”

Currently, a 10 percent transient occupancy tax, or T.O.T., is charged to occupants of hotels and other short-term vacation rentals. In January, Supervisor Rodoni proposed raising the tax by 5 percent in West Marin, with the additional revenue earmarked solely for the area.

Though he originally proposed to allocate three-fifths of the increase to affordable housing and the remaining amount to emergency services, he has settled on an equal split of the revenues.

The supervisor first heard the chamber’s opposition shortly after he presented his plans. At the time, he gave the chamber 60 days to come up with an alternative plan that could raise the same funds, which would total more than $1 million. The chamber never answered that proposition.

On Thursday, Mr. Borodic said that doing so would have meant that the chamber had accepted the proposal to raise the T.O.T. in the first place.

Supervisor Rodoni this week brushed aside the vote, describing the group as mostly “the old Point Reyes and Inverness business community primarily.” Still, he expressed some disappointment.

“This was a gentle way to allow operators of short-term rentals to participate in improving much of what they are blamed for and to help bring some resources back to the community,” he said. “We focused on the T.O.T. in an attempt to find a mechanism that wasn’t overly restrictive of short-term rentals, but also could see them as being part of the solution.”

A draft of the ballot measure, which will likely come before voters in November, lists possible uses of the funds. These include loans or grants to rehabilitate properties acquired by affordable housing organizations and down payment assistance for buyers willing to commit to affordable housing deed restrictions, as well as funding for additional emergency personnel staffing and equipment.  

In their opposition to the proposal, members of the chamber have generally argued that overnight guests in the area are not the main contributors to the visitor problems in West Marin—including strain on public restrooms, parking problems and traffic congestion. They also point to the fact that though day-trippers account for 97 percent of visitors, overnighters spend more money at local businesses.

Numerous members at last Thursday’s meeting spoke in favor of raising a different tax: the sales tax. The rate in unincorporated Marin, at 8.25 percent, is lower than in all the other cities in the county by at least a quarter percent. Fairfax, Larkspur and San Rafael are the highest, at 9 percent. Members supported a quarter-percent increase.  

Melanie Stone, the longtime owner of Zuma, said raising the sales tax would have less of an impact on tourism. She also criticized Supervisor Rodoni for not representing her interests. “He’s supposed to be our advocate,” she said.

Supervisor Rodoni has said that raising the sales tax would be problematic for a variety of reasons. Most of the revenue—about two-thirds—generated by the tax goes to the state. “Additionally, I don’t want to also tax the people that live here,” he said.

The T.O.T. presents a unique opportunity for West Marin, Supervisor Rodoni has argued. Last year, West Marin generated 80 percent of the $3.4 million the tax generated for Marin’s general fund, reflecting the prosperous industry. The T.O.T. hike would be reserved for use only in West Marin and would generate an estimated $1.2 million annually. (The other 10 percent would remain earmarked for the general fund.)

Chamber members voiced a number of other misgivings about the supervisor’s vision for the extra funds.

“What about all that money in the general fund? Where does it all go? We’ve let them tread all over us,” said Susan Nelson, owner of Lingonberry Farm in Point Reyes Station.

Hal Russek, the Marconi Center’s general manager, said that any investor in a large project always asks, “’How much do you need?’ We need to hold Rodoni responsible for coming up with hard numbers—how much do you need and for what specific projects?” 

He also said the estimated revenue from the T.O.T. increase was made with the assumption that it would not significantly reduce tourism.

In response to that concern, Supervisor Rodoni said the Marin Economic Forum is crunching numbers to model possible economic impacts and will likely have some data by the summer.

Supervisor Rodoni has also pointed to other counties and cities along California’s coast, where taxes for short-term rental operators are comparable to his proposed 15 percent. In Los Angeles, visitors pay 14 percent T.O.T.; in San Diego, they pay 15.75 percent. In San Francisco it’s 15.07 percent, though some parts of the city pay an additional 1.25 percent to a business improvement district, or B.I.D., which is typically formed by property owners and businesses to fund additional services such as marketing, street cleaning and security.

The eastern half of unincorporated Marin has a 2 percent B.I.D. that goes to the Marin Convention and Visitor Bureau. In 2003, when the district was first established, West Marin B&B operators and residents opted out on the basis that it would promote increased tourism. 

One of the seven members who voted to support the proposed tax hike last Thursday, Ken Eichstaedt, who works as the general manager for the Inverness Public Utility District and manages a small B&B in Olema with his wife, Amanda, braved the opposition.

“We really need this,” he said of the T.O.T. increase. “We can’t hire new firefighters and water operators without access to affordable housing. The problems facing us are about public safety, and we are all going to suffer if we don’t face that.”

Mr. Eichstaedt sits on a working group formed in January by Supervisor Rodoni’s staff to discuss the T.O.T. proposal. The group includes county representatives, Bolinas Fire Chief Anita Tyrrell-Brown, two short-term housing representatives and housing advocates from Point Reyes Station, Inverness, Bolinas, Stinson Beach and Muir Beach.

“The influx of visitation has grown exponentially, which brings a lot of spending dollars, but emergency services don’t see any of the financial benefit and we do get called more to serve,” Ms. Tyrrell-Brown said this week.

Fire departments in West Marin rely heavily on volunteers, many of whom live or work out of the area, Ms. Tyrrell-Brown said. With the need for 24-hour staffing, that makes things difficult.

Funds generated by the tax increase might help the Bolinas fire district add an  additional employee, and a county first responder team that serves the southern half of West Marin would shift from a seasonal posting to year-round operation. Mr. Eichstaedt said that in Inverness, he would like to see additional funds go toward housing stipends for water operators and volunteer firefighters.

Mr. Russek, the general manager of Marconi, explained how he felt the chamber’s vote would be perceived. “We aren’t against more funds for affordable housing or emergency services, which I’m sure is assumed,” he said. “That’s like saying war is bad and peace is good—everyone can agree. But there are different ways of accomplishing those goals.”

Mr. Borodic said that the chamber’s next steps were to meet with the Marin Convention Business Bureau and Marin’s supervisors to make its position clear.