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Tony McFarlane, Administrative Services Director, City of Scotts Valley

Measure N authorizes the City of Scotts Valley (City) to increase the existing Transient Occupancy Tax (TOT) rate from 10% to 11%. Visitors pay this tax when staying at any lodging facility (such as a hotel or motel) for 30 days or less within the City. Therefore, the tax appropriately places the burden of providing additional local support services, like streets and public safety, on the visitors who drive this need. The tax is on the room rent paid. For example, a hotel guest currently pays $10 tax per night on a $100 hotel room. If the ballot measure is adopted, the hotel guest would pay $11 tax per night on a $100 hotel room.

Additional revenue generated by the new TOT rate will help to maintain core City services, such as police, recreation, park maintenance, the repair of streets and roads, and other essential City services. It will also reduce the City’s General Fund structural deficit (projected at $1.2 million for fiscal year 2018/19).

If approved by the voters, the new tax rate would become effective January 1, 2019. The tax increase will generate approximately $230,000 per year in new revenue. The projected revenue is based upon analysis of historic TOT revenues and the anticipated opening of two hotel establishments within the City over the next two years.