Voters in Coachella will decide whether or not the city will be able to increase how much it collects in transient occupancy taxes (TOT) this Election Day.
“At the rate that our city is growing and evolving, it seems like a viable source of revenue since we don’t have a hotel in our city, but we do have short-term rentals,” Risseth Lora, public information officer for the city, said in an interview with The Riverside Record. “It just makes sense to utilize that as a revenue source.”
The city currently imposes a 9% transient occupancy tax rate, the lowest in the Coachella Valley, but will be able to increase that up to 13% if two-thirds of voters support the measure, according to information available on the city’s website.
“When we’re considering the rate, we can’t make Coachella uncompetitive,” Mayor Steven Hernandez said at a July 10 study session about the tax rate, noting that the other cities have a foundation of tourism that Coachella does not.
An increase of 13% is estimated to bring in an additional $350,000 to the general fund and would be used to fund local public services such as police, fire and parks and recreation with limited impact to the city’s residents since the tax only applies to short-term stays in the city of 30 days or less.
“Our rate has not gone up since 1984,” Lora said. “So it’s about time to kind of analyze and reassess where we stand, to the benefit of our community, because the funding will help with much-needed services.”
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The measure, if passed, would also update the city’s municipal code to clarify that the tax applies to the full fee paid by the guest of the hotel or short-term rental, regardless of whether that payment is made directly to the hotel operator or through a third-party booking service. It also includes other technical updates to address things like block reservations, claiming an exemption to the tax and how to calculate days of taxable occupancy.
According to Lora, increasing the city’s TOT became a topic of discussion due to all of the “big plans” that the city has including new development and upgrades to existing parks and public spaces.
“We just feel that Coachella is in a position where we should be comparable with what our neighboring cities are doing in order to help our community thrive,” she said. “It just seems like a fair position for the city to take in order to continue focusing on the betterment of our community and our space to make it more beautiful for our residents and for visitors.”
“Since Measure Y would generate additional funding toward our general fund, that seems like a no-brainer to bring our rate threshold up to be comparable with that of the other cities in the Coachella Valley,” she said.
Those who have not yet cast their vote have three options to do so. They can drop off their signed vote-by-mail ballot at a secure ballot drop box, vote in person at a vote center, or mail their signed vote-by-mail ballot through the United States Postal Service.
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