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A motel tax of 10 percent is not unreasonable
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On Nov. 3 Ceres voters have a chance to raise taxes - but not on themselves.

How they vote on Measure E depends on their feelings on raising the taxes of people who stay at the motels in Ceres.

There are only two places to lodge currently in Ceres - the Howard Johnson Inn and the Microtel Inn & Suites, both of which are located on Herndon Road.

Let's face it, we all pay taxes whenever we stay at a motel, whether it's in Morro Bay or San Francisco or Bishop. We know that when we book a room for $129 that it's not going to be $129 going on the card. There is always tax. Depending on where you stay, the rate can be as high as 15 percent in Anaheim. If you stay at Mammoth Lakes, it'll cost you 12 percent extra.

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 are being asked 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 passes with a simple majority vote. A $77 stay at Microtel now has a $3.85 tax. If Measure E is approved, the tax will come to $7.70.

The last time voters weighed in on the issue was in 2002 when they rejected a proposed increase of the TOT to 8 percent. Only 45 percent of the voters supported the measure while 55 percent were opposed. Why did it fail if most Ceres residents don't pay the tax since they don't usually stay at local motels? Well, that's open to speculation but according to City Manager Toby Wells, the 2002 defeat hinged on motel owners who at first supported the measure and then opposed it and began rallying public opinion against the tax six weeks before the election. Wells suspects that some voters may not have understood that the tax only applies to those staying at motels in Ceres. That could be why Mariposa County voters recently soundly rejected an increase in its TOT from 10 percent to 11.25 percent.

Perhaps voters just don't like tax increases of any sort. Hollister rejected a TOT increase from 8 to 12 percent by a margin of 67.5 percent to 32.5 percent. Needles tried to increase its TOT from 10 to 12 percent and got drubbed 64.1 to 35.9 percent. Fountain Valley voters rejected, by a margin of 60.3 percent to 39.7 percent, an increase in the TOT from 9 to 10 percent. But voters in Indio approved a 10 to 13 percent hike; Palo Alto okayed a 12 to 14 percent hike; Marina gave its blessings to a 10 to 12 percent hike; Capitola passed a 10 to 11 percent increase; and Tustin voters liked jacking up its TOT from 6 to 10 percent.

It doesn't seem like this tax increase is unreasonable and that it desires consideration for a "yes" vote. Why do I say that? Most cities in California have hotel tax rates of between 7 and 10 percent tax, with the exception of Anaheim and Mammoth Lakes as I already mentioned. Modesto and Turlock charges a TOT rate of nine percent. That means Ceres is charging less than what the neighbors have charged.

It's not believed that a 10 percent tax would affect the 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. Remember that Modesto and Turlock already charges nine percent. Nobody is going to shop around and say, "I can save one percent on my motel room if I travel to Modesto or to Turlock." Very few people even know or care they pay a TOT.

Ceres established its TOT in 1964 and hasn't increased the rate since before Watergate.

Ceres could capitalize on guests staying here by increasing the TOT and increasing revenue to the city by about $70,000 per year extra. If it is bumped to 10 percent, Ceres will realize about $140,000 annually for city services. As Wells points out, "it's a revenue source... that doesn't necessarily impact our residents."

Given that the vast majority of general fund dollars goes to public safety, extra funds could help out.

How do you feel? Let Jeff know by emailing him at jeffb@cerescourier.com