Things to consider about Measure B
Hotel taxes for unincorporated areas of Santa Cruz County are now higher than Carmel’s at 10% and the same as the City of Santa Cruz’s at 11%. If raised to 12%, Santa Cruz County’s tax rate would be equal to those in Capitola, Watsonville and Monterey.
Santa Cruz County’s hotel tax is now on par with many nearby counties and cities. Measure B would raise it to 12%. (County of Santa Cruz)
Some Santa Cruz County residents pay to stay at vacation rentals in the county, so they would pay a higher tax.
If the measure is adopted, the tax would be paid by visitors of hotels, motels, inns and vacation rentals in unincorporated areas of Santa Cruz County.
If the tax rate for hotels, motels, and inns were raised to 12% from 11% on Jan. 1, county leaders estimate that it would add about $160,000 in revenue in the first year and add $440,000 to prior hotel tax revenue for the county’s fiscal year 2023-24, according to a county staff report. The fiscal year starts July 1.
For vacation rental properties, the tax would rise to 14% from 11% and generate about $700,000 in the first year and add $1.9 million to the prior vacation-rental tax base for the county’s fiscal year 2023-24, according to a county staff report.
Proponents of Measure B have said that all the money from the tax hike will stay in Santa Cruz County and by law, none can be taken from the state.
Opponents of Measure B argue the money taken from the tax hike are not directed toward specific services. That is accurate. The text of Measure B does not specify what the money will be used for. The county resolution on Measure B states that the money will be used for “general purposes in order to continue funding essential public services including wildfire prevention, emergency response/recovery, street repair, public/mental health services, homelessness programs, and affordable housing.”
The county’s tax on hotel and vacation-rental visitors rose in 2021 after a dip during COVID-19 restrictions in 2020. The taxes are a top source of revenue for the county’s general purposes, county leaders have said. (County of Santa Cruz)
County leaders have separated taxes on hotel stays and stays in vacation rentals because:
- There are more rules and laws related to vacation rentals in unincorporated areas of Santa Cruz County compared with hotels.
- There are more impacts on residential neighborhoods especially in areas “not typically subject to the impacts of commercial endeavors,” according to a county staff report.
- There are development impact fees and permit costs on hotels and not vacation rental properties. Vacation rentals are usually private homes.
More information on Measure B
Santa Cruz Local stories on Measure B