Why I Am Opposing Increasing the Hotel Occupancy Tax and Instituting a Cannabis Business Tax

At tonight’s Council meeting, staff was given direction to begin the process of putting two tax measures on this November’s ballot.

The first measure would increase San Carlos’ Transient Occupancy Tax — the tax everyone pays when they stay in a hotel — from 10% to 14%, probably over a period of a few years. This could raise over $1.5 million per year, at least when the economy is doing well. It would be in line with what other, neighboring communities either have set, or are considering setting.

The second measure would create a 10% excise tax on any cannabis-related business in San Carlos (recall that, while we are not allowing retail sales anywhere in the city, we are allowing other kinds of cannabis-related businesses, e.g., distribution, processing, indoor cultivation). While there are no cannabis businesses operating in San Carlos, such a tax might raise $200,000 annually, more if we decide to allow retail sales.

I anticipate opposing both of these measures, should they go to the ballot, for one reason: I do not want to raise taxes without a clear, measurable plan in place for how we will be using the funds generated to improve the quality of life in San Carlos.

I believe that without such a plan the funds will not end up addressing the concerns (e.g., traffic, parking, insufficient athletic space, etc.) that residents tell me they want to see solved. While the staff report suggested some things the money could be used for, they were, IMHO, quite generic (and, in some cases, had been previously rejected by staff when I brought them up in private conversations).

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