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‘J’ TAKES ROOM TAX TO 12%
Visitors would help pay for more Manteca police, other services
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Among those working to pass Measure J are, from left, Cecily Ballungay, Laurin Sephos, and Richard Silverman. - photo by DENNIS WYATT

Stay in a room at virtually any California hotel and you’ll pay a room tax.

Most jurisdictions collect between 10 and 15 percent in room taxes to fund their day-to-day services such as police, fire, street maintenance, park upkeep, and such.

Manteca has been charging the same rate of 9 percent since 1991.

On Nov. 6, Manteca voters are being asked to bump up the room tax for the first time in 27 years from the current 9 percent to 12 percent. That means the tax paid on a $100 room for a one night stay would increase $3.

With existing hotels that will increase the city’s room tax receipts for the first full year by $450,000. Based on how general fund money is distributed with 62 percent going to public safety that could allow the city to either hire two more police officers, two more firefighters or a combination without relying on increasing property or sales tax rates.

“It’ll move Manteca forward,” noted Cecily Ballungay who is working to help secure passage of Measure J.

And that’s the exact message that the “Yes on J” signs popping up around town are conveying: “Moving Manteca Forward.”

By passing the tax on Nov. 6, it will be in place when the 500-room Great Wolf Resort opens in mid-2020.  That means based on historic 70 percent occupancy figures for its resorts Great Wolf expects to collect $4,237,000 in annual room taxes at the existing 9 percent rate.

Based on the 25-year period the city has agreed to share room tax with Great Wolf, the first $2 million a year would go to Great Wolf to help offset the $180 million plus in development costs. The remaining room tax would be shared with the city receiving 25 percent and Great Wolf receiving 75 percent for the first 10 years. Then for the next 15 years the split is 50-50 before the city receives all of the room tax in the 26th year and thereafter.

That 25 percent split for the first 10 years brings the city’s annual share to $529,625.

None of the increase of the room tax going from 9 percent to 12 percent would be shared with Great Wolf.  Based on the $4,237,000 annual room tax collection projection at 9 percent, jumping the tax rate to 12 percent would bring an additional $1,412,333 to the city’s general fund. Using the 62 percent general fund share for public safety mandated by voters when they approved the half cent public safety tax so the city couldn’t backfill general funding of police and fire with the special tax receipts, that means the 3 percent increase on Great Wolf rooms would generate $847,500 for public safety. If that was all spent on hiring entry level police officers the city would be able to fund just shy of 7 more police officers from taxes collected on overnight stays by Great Wolf guests.

Manteca Chamber of Commerce President Laurin Sephos noted that represents money that not only helps cover the costs the city incurs serving tourists but it also generates money to provide services for residents.

The tax requires 50 percent of the votes cast plus one to pass.

The only time Manteca residents would have to pay the tax hike that translates into $3 for every $100 of a room’s cost is when they rent a hotel room in Manteca.

At 12 percent it matches or is lower than the majority of room taxes of other cities that have heavy tourism or resort trade. The 12 percent rate is what Sacramento, Fresno, Bakersfield, and Elk Grove charge. 

The city has already agreed in negotiations with Great Wolf not to raise the room tax beyond 12 percent for the first 10 years of their operations in Manteca.  <!-- /* Font Definitions */ @font-face {font-family:Calibri; panose-1:2 15 5 2 2 2 4 3 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-536870145 1073786111 1 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:""; margin-top:0in; margin-right:0in; margin-bottom:10.0pt; margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Calibri; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Calibri; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} .MsoPapDefault {mso-style-type:export-only; margin-bottom:10.0pt; line-height:115%;} @page WordSection1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.WordSection1 {page:WordSection1;} -->

The development agreement has a clause that prohibits the city from the following:

Section 2.03 (d): Increase City’s TOT/TID Rate applicable to the Lodge Project above 12 percent for 10 years following the issuance of a certificate of occupancy for the Lodge Project;

(e) Commencing in the 11th year following issuance of a certificate of occupancy for the Lodge Project and until expiration or termination of this Agreement, increase City’s TOT/TID Rate applicable to the Lodge Project above the average TOT/TID Rate of those jurisdictions listed in Exhibit F, as shown in the most recent annual report issued by the California Office of Tourism or another reputable source; or

(f) Impose a tax or assessment that applies to only the Subject Property and/or the Lodge Project, and does not apply to any other property or business in the City of Manteca.

 

Measure J backers note that it is virtually a painless way for Manteca residents to obtain more city services.


To contact Dennis Wyatt, email dwyatt@mantecabulletin.com