The Manteca City Council needs to raise taxes — now.
Before anyone starts to send their blood pressure sky high by simply reading such a sentiment, this would be a tax Manteca residents would not pay unless they so choose to do so by booking a room at the Great Wolf Resort that could open sometime in 2020.
The tax is added onto the cost of a hotel room.
Manteca currently charges 9 percent. A measure needs to go on the November 2018 ballot to take that tax up to 12 percent.
A tax of 12 cents on every dollar spent for lodging would add $1,366,000 a year to the city’s general fund starting in 2020, the first year an indoor water park is expected to be up and running.
Based on 63 percent of every general fund dollar going to public safety, this would mean the city would be able to hire at least six police officers or six firefighters — or a combination thereof — and have $478,000 a year to go toward other pressing municipal needs.
The city currently is collecting $1 million a year from existing hotel rooms. Great Wolf is projected to generate $4.1million a year in room taxes.
The deal approved for Great Wolf includes a provision allowing for an increase to 12 percent of the current  9 cents on the dollar in room tax if the city so chooses during the first 10 years of the sharing of room tax revenues generated by the resort. After that for the 11th through 25th and final year of the deal the city can charge the average room tax for the region that is likely not to be much higher than 12 cents on the dollar.
Since it is in the terms of the deal Great Wolf hammered out with the city, it is clear their business model and financial package assumed a 12 percent room tax.
Under the terms governing the distribution of Great Wolf generated room taxes for 25 years, 100 percent of any increase in the room tax goes to the city.
The city has a limited window for placing tax initiatives before voters. Proposition 218 requires local tax proposals to be placed on the ballots at scheduled local elections. That means the next opportunity is this November. After that, the next window is November 2020.
If the increase is approved this November, the tax hike would be effective in April 2019. If the council waits until November 2020, that means the tax wouldn’t go into effect until April 2021. By then Great Wolf will likely have been open for more than a year. Between a Great Wolf and existing hotels that would — as Mayor Steve DeBrum might say — leave $1.7 million on the table, $333,000 from a year of taxes on other hotels and almost $1.4 million in additional taxes for one year of Great Wolf’s operation.
Having a 12 percent room tax in place when Great Wolf opens means over a 30-year period in dollars not adjusted for inflation the city would receive $40.9 million top of the $99.1 million projected. That doesn’t count $10 million in additional revenue based on existing hotel rooms over three decades.
Given Great Wolf has basically signed off on the idea, there is no excuse not to move forward now with a vote for a room tax increase.
The later the council waits the more money the city loses.
A 12 percent room tax won’t kill the visitors’ trade. Twice a year I spend 10 days over the course of two weeks in Inyo County at lodging in Death Valley and along the Eastern Sierra. The 12 percent room tax Inyo County already charges comes to $288 out of my pocket each year. If they increased it another 3 cents per $100 I spend booking rooms it would cost me an average of $5.22 per night $52.22 a year. That isn’t going to make me think twice. I’m going.
Manteca leaders need to maximize taxes that don’t hurt city residents and to make sure there is money to meet the needs of a growing city.
As for concerns that 63 percent of any new general fund revenue won’t end up being spent on police and fire that was preordained in Measure M ballot language voters approved in 2008 when they embraced the half cent public safety sales tax. It mandated the general fund had to continue to spend 63 percent of all revenues on public safety to address fears the city would simply shift police and fire costs to the Measure M tax and not add additional police and firefighters.
Given that the city now has staffing for a fifth fire station, the bulk of the funds could go to new police positions. It means Manteca could have six more officers on the streets above and beyond new positions that traditional revenue sources would fund. Given the lag time in implementing a room tax hike and collecting it, if the council opts to move in the next few months to place it on the ballot this November and voters approved it the city would be in a position to use the new money to hire police officers by June of 2020. Wait much longer and the earliest such a jump in police personnel could happen would be June of 2022.
The bottom line: If the council acts quickly to raise the tax, the Great Wolf deal will be the platinum example of a win-win public-private partnership in the 209.