The Ceres City Council believes that those who stay at Ceres motels should pay a higher room tax and are hoping Ceres voters feel the same way when they go to the polls on Nov. 3.
Voters will be asked for permission to increase the current Transient and Occupancy Tax (TOT) rate of five percent to 10 percent. Because the city is not specifying a certain use for the new taxes - they would go into the general fund - the measure would pass with a simple majority vote.
The last time voters weighed in on the issue was in 2002 when they rejected a proposed increase of the TOT to 8 percent by a margin of 45 percent to 55 percent.
Most cities in California have hotel tax rates of between 7 and 10 percent tax, with the exception of Anaheim which capitalizes on Disneyland visits with a 15 percent rate and Mammoth Lakes which charges 12 percent. Modesto and Turlock charges a TOT rate of nine percent.
The Ceres TOT - which was established in 1964 and last changed in 1971 - generates about $70,000 annually for the city with the number peaking to $91,000 in the 2005-06 fiscal year before the economic downturn put a serious dent in travel and tourism. City Manager Toby Wells said a five percent increase would bring in an extra $70,000.
"Bottom line it's a revenue source... that doesn't necessarily impact our residents," said Wells.
Ceres currently has approximately 110 rooms between the Howard Johnson Inn and the Microtel Inn, both located on Herndon Road. Wells said a 10 percent tax should not affect marketability of rooms in Ceres since motel and hotel rooms in 429 California cities are subject to a TOT and most people expect to pay one.
Wells said the 2002 defeat was likely due to motel owners who at first supported then opposed the measure and began rallying public opposition against the tax about six weeks before the election. Some voters may not have understood that the tax only applies to those staying at motels in Ceres, he said.
City officials want the measure to go on the November ballot to avoid a collision with the 2016 general election where a half-cent sales tax measure for transportation is expected to go before county voters.
Councilman Mike Kline said the city must do a better job of educating the voters that "it's not a tax on them."
Mariposa voters recently soundly rejected an increase in its TOT from 10 percent to 11.25 percent. Wells said successful measures have made an effort to educate citizens that they don't pay the tax unless they stay in the motels.
The city cannot spend money to campaign for the measure but it can educate citizens. The Ceres Chamber of Commerce has pledged to help get out the word by reaching out to our service clubs, the use of the newspaper, social media, You Tube videos and the Chamber website.
Ceres Chamber of Commerce officials have talked to the Jamnadas family, owners of both Ceres motels, and they have indicated that they are not opposed to the increase.
Economic Development Director Steve Hallam said he spoke to the manager of Microtel recently and he indicated he doesn't care if the TOT is increased as long as the city "is doing things to encourage more overnight stays in our city."
