Representatives of Humboldt County’s hospitality industry are taking a hard stand against a county-backed ballot initiative that would raise the local transient occupancy tax (TOT) rate to 12 percent. Members of the Humboldt Lodging Alliance (HLA) called the ballot measure “misleading” and said the county’s failure to include industry in initial conversations was “outrageous.”
Measure J, the Humboldt County Hotel Tax Update Measure, seeks to increase the TOT rate in the county’s unincorporated areas from 10 percent to 12 percent while also making the tax applicable to overnight RV parks and private campgrounds.
If passed, the total TOT would generate nearly $3.1 million annually to fund general county services, such as emergency response, children’s mental health, county road repairs, emergency communications systems, job training, as well as theater and public arts.
The matter was brought forth by the County Administrative Office and presented to the Board of Supervisors during the board’s March 8 meeting. The board voted 4-1, with Second District Supervisor Michelle Bushnell dissenting, to place the measure on the June ballot. The item initially appeared on the agenda’s consent calendar but was pulled for discussion by Bushnell who said she had received many emails and phone calls from representatives of the hospitality industry who felt “blindsided” by the proposal.
Members of the HLA convened via Zoom on Wednesday morning to discuss and determine how the organization would respond to the ballot measure.
Before diving in, board president Chris Ambrosini noted that members of the CAO’s office, county economic development director Scott Adair and Supervisor Bushnell had met with several members of the HLA at the Benbow Historic Inn on April 8 to discuss the history of the ballot initiative and explain the county’s process.
“This began in January of 2021 when there was a presentation to the Board of Supervisors about the funding which is being used to market the county,” Adair explained during Wednesday’s meeting. “There was a presentation also made in 2021 by the Humboldt County Visitors Bureau with some comparisons to what other counties and communities are spending on their marketing efforts. As a result, at that January 2021 meeting, the board directed staff to go and perform an analysis of [TOT] and to return to the board with recommendations.”
Months later, the county hired a third party to conduct randomized polling of Humboldt County voters asking whether or not the TOT should be amended.
“That company…balanced the number of registered voters that were picked randomly…so that there was equal representation across the districts,” Adair said. “…There seemed to be broad support for amending or changing the TOT, so on March 1 of this year, the board directed staff to prepare what would be a potential ballot measure for a modification of TOT to go on a future ballot for voter consideration.”
Adair acknowledged that the county had fallen short in its communications with the HLA and said there was “quite a bit of discussion [at the April 8 meeting] about how the county could have done better communicating with hoteliers and with other community stakeholders.”
During that meeting, County Administrative Officer Elishia Hayes suggested the county move forward with a workgroup comprised of HLA members, county representatives and community stakeholders to determine how future TOT revenue would be spent.
“Supervisor Bushnell also agreed to put this before the board on April 26,” Adair said. “So I’m giving everyone notification right now that on April 26 this is intended to go to the Board of Supervisors for discussion and review. …[We] also gave guidance to HLA that they could prepare and remit a formal letter concerning this item and the ballot measure in general, and direct that to the clerk of the board in advance of the April 26 meeting.”
Turning to discussion from HLA members, Ambrosini called the wording of the ballot measure “very misleading” and said it suggested the 2% TOT increase would bring in an additional $3 million in funds rather than a total of $3 million.
“There’s really only going to be about $800,000 or something they’re predicting [it will bring in] which I think is really misleading to the public,” he said. “They’re putting in the full amount because the county is already collecting the 10% which is $2 million. The total that they’re showing is very misleading and almost, I don’t know, not ethical to have the correct amount not showing.”
Jeffrey Durham, owner of the Redwood Riverwalk in Fortuna, also criticized the wording of the ballot measure, asserting that “nobody in their right mind is going to say no to mental health and safety issues.”
“Bravo to the county counsel who wrote that ballot measure, he should be employed by every single municipality in California to write ballot measures to raise people’s taxes,” he continued, criticizing county administrators for failing to communicate with the HLA about the ballot measure. “…Now you’re asking us to come to the table. …I love the idea of everybody coming together, but Jesus Christ, wouldn’t it have been nice to happen 14 months ago?”
Mike Caldwell, owner of the Inn of the Lost Coast in Shelter Cove, underscored that the ballot measure will be presented to all Humboldt County voters but noted that it would only impact unincorporated areas of the county.
“In the cities, citizens are voting on this and it’s not affecting their businesses or their areas,” he said. “It’s all on the unincorporated county which represents about half of the TOT that’s generated through both the incorporated and the unincorporated side. …I’ll be the first one to say that if there’s a plan out there that benefits the entire county – the incorporated side [and] unincorporated side – I’ll be the first one as a hotelier to step up and support [it]. This is just outrageous.”
John Porter, a managing partner of the Benbow Inn, echoed Caldwell’s concern. “The fact that everybody in the county – including incorporated areas – gets to vote on this, I mean, it’s the biggest taxation without representation example that you can put your hands on. People are voting on it and it has no effect on them whatsoever. Those of us that have hotels in the [unincorporated] areas are going to be at a disadvantage.”
Speaking to Adair, Ambrosini reiterated that the HLA board was “blindsided” by the March 8 agenda item and did not have time to convene for an emergency meeting to discuss the matter.
“If the county would have come to HLA…with a specific earmark [as to] where the funds are gonna go, we might have gone for the two-thirds vote and we may have said, ‘Gosh, increase it 3%’ or we may have come up with a different alternative where it didn’t even [need to be] put on the ballot. We could have come up with other ways to help fund whatever they needed funded.”
Adair, once again, acknowledged fault and said the county’s process “could have been better.”
“Even for myself, even though [my team wasn’t] necessarily the drafters of this ballot measure, we could have done a better job to communicate and involve you,” he said. “…Hopefully there’s more opportunity for this to get out into the public and for the community to have dialogue and discussion on this and be aware of the issues that were part of the intent behind the April 8 stakeholder meeting.”
Lowell Daniels, owner of the Victorian Inn & Redwood Suites in Ferndale, thanked Adair for trying to build a bridge between the county and the HLA. “I think you’re being as honest as you can be….I think you were in the dark as much as us on some of these items. …I believe that you are not aware, but that doesn’t excuse the county. I just feel it’s a travesty and [the measure] is probably going to pass – Who’s going to vote against it the way it’s written? – but it’s dishonest.”
Adair apologized several times throughout the discussion and admitted that he was torn between “not throwing my coworkers or staff members under the bus but also trying to be as transparent as I can.”
“Our agency did not know until very late in the process, or maybe we didn’t realize that the increase was also going to be part of the ballot measure,” he said. “We knew that that discussion was occurring but thought that perhaps they would be two separate measures and not combined.”
Even still, Durham emphasized that the measure is already moving forward and will likely receive voter approval. “It’s already been done. …It won’t be and it cannot be changed by law. It was already approved.”
But the measure hasn’t been approved just yet. Ambrosini noted that there is still time to reach out to local media outlets and launch a public information campaign before the June 7 Primary Election. The board unanimously agreed to do just that.
The matter will be discussed at the next Board of Supervisors meeting on Tuesday, April 26.