Hotel and hospitality operators are suggesting, through the Convention & Visitors Bureau, to increase the city's bed tax to support Long Beach's major arts groups and deal with infrastructure needs at the Convention Center.
And Mayor Robert Garcia has said he is ready and willing to support the increase put it on the March ballot.
A letter was sent last week to the mayor and City Council from the CVB, signed by managers of four major hotels and leaders of 10 arts organization promoting a 1 percent increase in the Transient Occupancy Tax (TOT), also known as a bed tax. The tax is levied on hotel room rentals, and currently is 12 percent at most Long Beach hotels.
That money is used for a number of things, including the majority of the CVB's budget. TOT revenue also goes to the city's general fund, and has been used as an incentive for developers to build hotels.
"A 1 percent TOT increase would amount to approximately a $1.80-$2.00 increase per hotel room per night," the letter says. "This is not a tax on Long Beach residents or our hotels, but a small revenue increase that would be paid for by visitors, convention attendees and those booking hotel rooms in Long Beach. Increasing our TOT by 1 percent would still put the City’s TOT at an amount less than our nearest competitor."
According to their websites, Anaheim's bed tax is 15 percent, while Los Angeles's is 14 percent. The letter also says that Long Beach hotel rooms rent for an average $100 less than those in Los Angeles.
"Long Beach is a convention city, and the convention center needs some serious work on the back end," said Imran Ahmed, chair of the CVB board and general manager of the Long Beach Marriott. "And the arts are very important to any city… Arts are our heritage in this city."
The proposal, expected to go to the City Council on Nov. 12, would raise the citywide TOT to 13 percent, if the residents agree. As a tax, it must be approved by voters; the action asked of the council will be to put it on the March primary ballot.
"I'm very supportive of this," Garcia said this week. "I will take it before the council, and support it on the ballot."
The city currently uses some TOT to support the arts with a $600,000 grant to the Arts Council for Long Beach, which in turn gives that money out in grants to artists and arts groups. This additional tax revenue would be split 50-50, with half going to Convention Center infrastructure needs and the other half spread among the major arts organizations in the city. At the current level of hotel room sales, the 1 percent would raise more than $2.8 million a year.
City officials and arts groups have eyed the TOT before to provide public support to the arts. In 2004, a 1 percent TOT increase was one option offered by a task force created to explore revenue sources for the arts when the city faced a budget deficit. It made it to a review panel of City Council members before being dropped for fear it wouldn't pass in the anti-tax atmosphere of the time.
The March ballot currently has a proposal to extend the city's Measure A sales tax increase indefinitely.
Supporters of the TOT proposal point to the fact tourists and convention attendees would pay this tax, and say they are confident the increase can pass.
"My logic behind my support is very simple," said Mooyon Kim, general manager of the Holiday Inn. "It's something we can afford … and in the long run, it is an investment in the city… It will give us more to offer visitors and at the same time improve the quality of life in our city. It's as simple as that."
Harry Saltzgaver can be reached at firstname.lastname@example.org.