🎯 STRisker: Bulletin - San Jose, CA
From 10% to 12%: San Jose’s Hotel Tax Proposal
San Jose Considers Hotel Tax Hike to Close Budget Gap
San Jose leaders are weighing a proposal to raise the city’s hotel tax as they confront yet another major budget shortfall. The City Council is set to review a ballot measure that would increase the transient occupancy tax from 10% to 12%.
Officials estimate the hike would generate an additional $10 million annually for the city’s general fund.
That money could be used for a wide range of services, from public safety to park maintenance to homeless encampment management.
Assistant City Manager Lee Wilcox explains the rationale in a memo: “Over the past quarter-century, the San Jose community has struggled to reconcile its relatively low levels of revenue per capita with the day-to-day service level demands of a major city.”
The proposal comes as San Jose faces a projected $65 million deficit for the upcoming fiscal year. Without new revenue, city leaders warn of significant service cuts and potential layoffs. Jean Cohen of the South Bay Labor Council says the hotel tax increase is “one of many tools” needed to keep the city functioning.
If advanced by councilmembers, the measure will go before voters in the June 2 primary election. It requires only a simple majority to pass and would take effect October 1.
Business groups are cautious. San Jose Chamber of Commerce CEO Leah Toeniskoetter says higher hotel taxes could hurt tourism. “Taxes to hotels make a room more expensive and really impacts our tourism industry,” she says. The chamber has not yet taken a formal position.
City officials argue the increase is modest. Even at 12%, San Jose’s hotel tax would remain below nearby competitors. San Francisco and Oakland both levy 14%.
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Councilmembers Pamela Campos, David Cohen, Peter Ortiz, and Domingo Candelas have also asked staff to update them on efforts to modify the city’s business tax. They warn that continued cuts risk “erosion of core City services, loss of essential staff, and elimination of programs valued by our community.”
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