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The Question
Shall the Fremont Municipal Code be amended to increase the Transient Occupancy
Tax (commonly called the “hotel tax”), which is charged only to persons
who occupy hotel or motel rooms in the City for 30 days or less, from the
current 8% to 10%, in order to help maintain basic City services such as
public safety, and street and park maintenance?
The Situation
External forces largely determine the City of Fremont’s revenues. State
of California revenue policies and regional, national and international
economic forces impact us. Both State policies and economic challenges
have led to unpredictability in City revenue. Revenue growth has not kept
up with community growth and has not been sufficient to provide fundamental
City services at the levels the community desires. Public safety and park
and street maintenance services will consume more than 85% of the City’s
General Fund revenues in FY 2008-09 and none will be funded at optimal
levels. Fremont has very few locally controlled revenue sources such as
the TOT (Transient Occupancy Tax), which is funded primarily by non-residents.
The TOT is expected to generate $3.2 million (or 2.5%) of the City’s $128.5
million FY 2007-08 General Fund revenues. The City Council adopted a balanced
budget on June 10, 2008 for FY 2008-2009. However, costs will once again
exceed income. For the first time the City is expected to spend its entire
fund balance and use $4.1 million of General Fund reserves (the City’s
savings). |
The Proposal Measure MM proposes that the City
of Fremont increase the TOT from 8% to 10%. A simple majority (50% + 1)
is required to pass a general fund tax measure. All of the TOT revenues
collected by the City are used and shall continue to be used for City General
Fund purposes.
Fiscal Effect
The City Council’s budget priority allocates more than 85% of the City’s
general funds towards public safety and street and park maintenance. Additional
revenue for these services is vital for maintaining the high quality of
life Fremont residents expect and deserve. An increase of 2%, which is
about $2 more a night for a room that costs $100, will help raise about
$800,000 for the City’s general fund. WHAT A YES OR NO VOTE MEANS A YES
votes means that the Transit Occupancy Tax will increase to 10%. A NO vote
means that the Transit Occupancy Tax will remain at 8%.
Supporters Say
A ”Yes” vote on Measure MM will not raise taxes on Fremont residents or
local businesses. Only visitors staying in hotels and motels in Fremont
will pay this tax. A “Yes” vote will generate additional funds for local
services. The TOT is levied on visitors, who use City roads, enjoy our
amenities and are protected by our police and fire services. Fremont has
one of the lowest TOT rates in the Bay Area. Increasing our rate to 10%
puts us at the same level as many neighboring cities. Therefore, we will
remain competitive. It is important for Fremont to have a local revenue
source that cannot be taken away by other levels of government. |
The entire City Council placed Measure MM on
the ballot and it is supported by the local motel and hotel industries.
More than 85% of the City’s general funds are used for public safety and
to maintain over 486 miles of streets and 850 acres of parks. Please
join the Fremont Chamber of Commerce, the League of Women Voters, and representatives
of the Fremont hotel industry in voting “Yes” on Measure MM.
Opponents Say
In 2006, we voted NO for local utility taxes. The City stated they needed
the tax. After it was defeated they found approximately $10,000,000 somewhere.
Measure MM is a referendum on City leadership. Previous tax measures failed
because voters understood there were no guarantees how the money would
be spent. Tax increases should have a 2/3 majority to pass. Saying that
Fremont residents will not pay this tax does not keep it from being a tax
increase. One way or another all taxes are paid by all citizens. Since
when is a tax "competitive"? All taxes are regressive. This tax Increase
will go to the general fund where it will subsidize excessive union contracts
similar to those that bankrupted the City of Vallejo. Increasing taxes
causes employers to move out of California. Please join Waste Watchers
in voting NO on Measure MM.
For More Information
Supporters: www.FremontFirst.com Opponents: Waste Watchers, Inc. 510-794-8797
Disclaimer: (Information on this measure is from the opponents and proponents
of Measure MM). |