Sonoma County could tap new tourism taxes for roads, parks, fire services

The nearly $5 million Sonoma County expects to receive in the coming fiscal year from a voter-approved tax increase on overnight hotel stays would be used to help offset the strain visitors place on roads and emergency responders, among other services, under a plan being considered by county supervisors.

If ultimately approved, the proposal would dedicate 20 percent of the new tax money - which translates into an anticipated $1 million over the next year - each to county roads, fire services and regional parks. Additional shares of the money would be set aside for affordable housing, code enforcement, event facility improvements and a new “tourism impact fund.”

The money would come from the 3 percent bed-tax increase generated by Measure L, which voters overwhelmingly backed in November to raise more revenue to address the impacts of tourism. The ballot measure increased from 9 percent to ?12 percent the tax levied on overnight stays at hotels, inns, vacation rentals and campgrounds in the unincorporated parts of the county.

The Board of Supervisors publicly discussed use of the new tax money for the first time Tuesday, wading into a larger debate over how much of the preexisting bed-tax money the county spends on marketing itself through the Sonoma County Tourism Bureau. Another plan under consideration by the board would reduce the tourism bureau’s share of bed-tax revenue by roughly $1 million next fiscal year.

“Tourism goes far beyond advertising,” said Supervisor Shirlee Zane, the board chairwoman. “It goes into the state of our roads. It goes into our parks and open spaces that people come here to enjoy. It absolutely affects the public safety and the housing of the hospitality industry, which has been stretched to its limit … Tourism is a wonderful issue here in Sonoma County, and we need to support it, but we also need to mitigate the impacts of it as well on our permanent residents.”

Zane is one of two supervisors that have been meeting this year to evaluate the county bed taxes in light of the passage of Measure L. She and Supervisor Lynda Hopkins have been studying the taxes and have developed a series of recommendations, including the plan for new revenue expected next fiscal year, as well as a proposal to reduce funding for the tourism bureau.

After extensive feedback from the public, the other three supervisors signaled support for many of the recommendations, but concerns were raised as well. Supervisor Susan Gorin said she wanted to see more bed-tax money put toward housing, and Supervisor David Rabbitt indicated he wanted to take a broader look at all the money the county was spending on the areas the new tax revenue would support.

The board is set to return to the issue again sometime in the coming months.

The proposed reduction for the tourism bureau was met with staunch opposition from tourism industry executives who warned of dire consequences if the county cuts back on marketing itself as a destination for visitors. Tim Zahner, the interim CEO of the tourism bureau, said the lower funding would hamper his agency’s ability to promote the county and lamented that the bureau was not consulted before the reduction was proposed.

“The current proposal, as written, did not incorporate input or data from stakeholders, and appears incomplete,” Zahner said. “The negatives on this outweigh the proposed benefits.”

Steve Jung, general manager of the DoubleTree hotel in Rohnert Park, cautioned supervisors that they could unintentionally hurt their bed-tax revenue if they stop marketing the county as aggressively to potential visitors.

“Tourists have a choice. They don’t have to come to Sonoma County. There are a lot of other choices to make,” Jung said. “Reducing our investment in bringing tourists to Sonoma County will result in a loss of demand.”

The tourism bureau currently receives 2 percent of the baseline 9 percent bed tax in place before Measure L, a funding arrangement that has amounted to around $3 million for the bureau in recent years. Zane and Hopkins’ proposal would lower the bureau’s bed-tax funding to $2 million.

Most of the bureau’s more than $8 million budget comes not from bed taxes but from a ?2 percent assessment on room revenues of more than $350,000 that’s levied on businesses in the unincorporated areas and most cities in the county.

The bureau also has almost ?$4 million in reserves, which Zahner said was in keeping with industry best practices.

Hopkins, however, took issue with claims that a shift of tourism dollars would harm the agency.

“This is not your usual nonprofit,” she said, urging the bureau to “prove to our tourist-impacted communities” - such those along the Russian River and Sonoma Coast, much of which fall in her district - that it is receptive to their needs. “You actually have a steady source of taxpayer funds.”

You can reach Staff Writer J.D. Morris at 707-521-5337 or jd.morris@pressdemocrat.com. On Twitter @thejdmorris.