The Hidden Costs of Ballot Measure J

The debate over competing Hotel Tax Clarification Ballot Measures J and K focus almost entirely on their impact on tourists and the nuances of hotel tax code, while failing to consider how they will affect many of San Francisco’s poorest residents.  The City Controller estimates that both measures will generate approximately 12 million dollars in annual revenue for city coffers (J purportedly raises 38 million annually, but The Controller indicates that the amount will be closer to 12 million after “clarifications”).  It is important, therefore, to evaluate the two measures based on other criteria.

On the surface,  Ballot Measure J looks like a fair way to generate much-needed revenue for San Francisco services under duress.  Upon closer examination, passing the Hotel Tax Clarification and Temporary Increase will have a direct negative impact on a vast segment of The City’s most vulnerable residents.  If  Ballot Measure J passes on November 2nd,  hotel tax rates in San Francisco will increase from 14%  to 16 % for three years.  Since the 12 million dollar increase in revenue for the City will result from a rate increase that applies only to “non-residents”,  this is an easy sell for those who support Measure J.  After all, how could anyone argue with charging the approximately 5 million visitors staying in our hotels a few more dollars a night?  Conventional wisdom tells us that those who can afford to vacation in San Francisco for a week can certainly absorb what might amount to the cost of taking the entire family for a ride on a cable car.  Here’s the problem: thousands of San Francisco residents living well below the poverty line depend on Tenderloin, South of Market and Mission hotels for shelter.  Most of these establishments are in marginal neighborhoods with tiny, “shared bath” rooms few tourist even consider an option.  Despite the often horrendous conditions of these hotels, they are hardly low-cost.  The average price for one of these rooms is about $55 a night.  Now calculate the tax.  This translates to about $9 a night, or $63 a week on a room which is already costing approximately $385 a week – or $256 a month to an already unbelievable $1540 a month!   Measure J excludes “permanent residents” from the tax increase, but acquiring this status requires one live in a room for at least 28 days – something the management of these hotels seldom allow without a credit check and, or deposit.  If the patrons of these establishments could pass a credit check or supply a deposit, they would rent more reasonably priced, appropriately maintained housing.

It is also worth considering that the San Francisco Chamber of Commerce estimates the tax increase could cost The City about 2,000 jobs from the local hotel industry and $75 million in tourist revenue annually.  Alternately, The City Controller estimates Measure K will generate the same 12 million dollars by closing a loophole which allows on-line travel agencies to pay taxes on a discounted room rate while charging customers full price.  Passage of Measure K will void Measure J while creating the same revenue – without loss of jobs, tourist revenue or placing undo financial burden The City’s poorest residents.

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    • Markus
    • September 9th, 2011

    Since when do legislators care about the poor. Some will they do when they want your vote, however, those who sleep in hotels, I would assume, generally don’t vote so, unfortunately, the point is moot.

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