Pros and ConsFremont Measure MM Transient Occupancy Tax
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).