Wednesday, 22 March 2017

Leroy-RadanovichIt may seem strange for an ex-County Supervisor to urge voters to reject the increase of the TOT (Tourist Occupancy Tax presently at 10%) which will be on the ballot this coming November 4th but I have a bit of a unique perspective about this tax and the businesses that it will effect. 

As the Tourism Director of Mariposa County from July 2006 until August 2008, I clearly understand the value of tourism to life in Mariposa County.  Today almost half, or more, of the budget that the Board of Supervisors has to spend comes from the proceeds of this tax.  On the surface that seems wonderful as that means that a large part of the revenue that the County spends on all classes of service is paid for by visitors to our county and not county residents, property owners, business owners or even the State of California.   Good deal, wouldn’t you say?  Well, maybe not.

There are fundamental facts that you should know.  First Mariposa County, by location of our boundaries, collects most of the Bed Tax paid by visitors to Yosemite National Park.  That is because the facilities located in El Portal, Yosemite National Park, Wawona, Yosemite West, Fish Camp and Mariposa are the primary sources of lodging for tourists in the Yosemite region.   This becomes a windfall for the County.

I have been involved with TOT since the beginning.  During the early 1960’s as a Chamber of Commerce officer, we proposed and supported the imposition of TOT.  It took special legislation and the agreement of the Board of Supervisors.  The TOT was being used in San Francisco County, for example, to improve facilities to attract more tourists to strengthen the economic position of business in the city.  We had a different problem because Mariposa County, outside of Yosemite, was way behind the curve in terms of economic development.

A few small motels existed along the river in El Portal and mostly pre-war (WWII) units were here in Mariposa.  Visitors frequently had to back-track to Merced or other valley towns in order to find lodging during the summer.  A lot of business was lost outside the county.  Believe it or not we set up a Tourist Information function in our Drug Store. Daily, with the co-operation of Yosemite Park and Curry Company, we would call around looking for lodging vacancies for the tourists.  It got to be a chore interfering somewhat with our business but we did it.  Back then we did not have a professional full time Chamber of Commerce nor a Visitors Center.

Soon visitation to Yosemite began growing.  And the Bed Tax that we had asked for began to grow and became significant.  The facts are that very little of that revenue was used to help the industry grow but was used to keep property taxes as low as possible.  But in 1978 Prop. 13 changed all that and with a virtual freeze on property taxes  (increases less than 2% a year), governments of all sizes and types had to search elsewhere to find the revenue to continue the growth of government services.   Mariposa County was fortunate because it had the TOT to fall back on and some growth caused by a small real estate boom. 

By 1985 it became apparent that additional revenues were needed because of the demands of new legislation and state government expanding services in many areas.  Our decision was to attempt to grow the tourist industry which was and is our largest profit based business.  Government does not produce a profit in itself but does spend plenty of money, but we don’t tax it.  So, for the first time Mariposa County began using a bit of its revenue to help develop the tourist industry.  A full time professional Chamber of Commerce and a Visitor’s Center was developed with General Fund money, although we all knew but couldn’t say, the source was the Bed Tax (TOT) that we were collecting. 

As time went on the Tourism Bureau was developed out of that effort.  In 2007 it became independent from the Chamber of Commerce and County Government as a private non-profit and began hiring professionals in the industry to strengthen and increase visitation, both inside and outside the Park.  Not only was visitation to the county growing but many new units were being added to the inventory of lodging units, all adding to the revenue Mariposa County received.  Following the growth of the lodging industry came new stores, restaurants, and other visitor directed businesses, all paying taxes to the county.  So it was not just the Bed Tax that the county was collecting from tourism but it was substantial property and sales tax.   At the same time, Mariposa County Government began spending money on many new and improved activities such as Fire Departments, the Library, higher salaries which guaranteed larger retirement benefits, health care benefits, new buildings of all classes, and debt, which we had never had.  These new or expanded services were asked for by a changing demographic needing political recognition.  Not all of this governmental growth was the desire of the BOS. Much was a reflection of the demands of State and Federal Government to extend greater control over local government to implement political and social programs supposedly to improve the quality of life.  Boards of Supervisors from the 1980’s found it difficult to deflect many of these demands and sometimes reluctantly funded them from an ever decreasing taxing base.  Were it not for the growth of the TOT, Mariposa County could not have responded.  The inability to keep up with demand created a liability debt that faces this and future Boards.

Today the TOT provides Mariposa County with at least half of the revenue it needs to function, and yet we are in debt up to our collective ears.  92% of the Bed tax (TOT) goes to the General Fund with approximately 8% used to promote the business that provides all these good and wonderful benefits.   And now the Board of Supervisors wants more, basically created by uncontrolled spending.  First by raising the Bed Tax by $1.4 million annually and then by taking away the relatively small amount it invests in this industry.  Not that they won’t invest some because they are looking at taking less than $500,000 (one year’s contribution to the Tourism Bureau which will be canceled) to buy three years for the Visitors Center from the Chamber of Commerce, apparently only in Mariposa.  Ask for the statistics in terms of the percentage of visitors that actually use the services of the Visitor’s Center.  Fortunately the Tourism Bureau (private non-profit separate from the Chamber of Commerce) has another funding source but it still that would mean 1/3 less to spend on promotion in an expanding business environment which greatly benefits County Government.  County Government has suggested that the private BID (Business Improvement District) increases its private fees by 1%.  If the industry is forced to do that to sustain the effort then a proposal should be placed on a ballot to rescind the Bed Tax since its only purpose then is to swell the county coffers, no longer being used to develop business or improve the visitor experience.  Mariposa County Government should then be forced to live within its means from the taxes collected from its citizens and business, not the tourist.

The purpose for the Bed Tax is supposedly directed towards improvement of the visitor experience and services which we can share with them.  Of course loss of the Bed Tax revenue would probably break the county but fair is fair.  The TOT (Bed tax) has benefited Mariposa County a great deal over the years with little investment by Mariposa County in the industry chosen to provide the vehicle for the tax.  Not only has the county received the TOT but also property tax from many millions in investment stimulated by the tourist industry.  The jobs that the lodging industry has provided and the local services in all trades are daily source of revenue for the county.  If anything, the county should be investing more, not less, in the visitor experience just as San Francisco has done to lead the way.

 Why not raise the tax?  First of all it places Mariposa County lodging business of all classes at a competitive disadvantage with our neighbors.  They would love to see us in this position. I recommend reviewing Gary Francisco’s letter covering the many other problems that would be created.  But most of all, in my mind, any increase in revenue to the BOS will further exacerbate the lack of ability to govern.  Any increase in county revenue will not occur in the spirit of Prop 13.  Any increase in revenue will not reverse the poor decisions of the past such as the Solid Waste Composter that does not work, the Field of Dreams property which has not nor can it be properly developed, a Social Services Building which ultimately the county is responsible for, excessive fees for just about everything, repairs for our historic Court House and on and on.  Is it not interesting that the employees of the county that were involved in all of these mistakes are no longer with us but instead given nice checks to resign and leave the County.  There is a culture among professional government employees that looks for and finds growth in their industry that benefits only the government industry and not the taxpayer.  I have always felt that Government is supposed to provide the population services which it cannot provide for themselves.   A direct correlation between the services provided and the cost of those services.  I do not take the current board members personally responsible for all these problems but they contribute little to solve them.  They need our help.

VOTE NO ON RAISING THE BED TAX (TOT) MEASURE K November 4, 2014.
 
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