Groups mull increase in 'bed tax'

The organizations that receive a yearly share of Trinity County's transient occupancy tax revenue collected from the patrons of local hotels and resorts have teamed up in an effort aimed at increasing the tax rate from the current 5 percent to 10 percent.

"We'd like to open it up for a dialogue," said Pat Zugg in her dual role as vice president of the Trinity County Chamber of Commerce and president of the Weaverville Chamber. She was joined by the Hayfork Chamber of Commerce treasurer, Charlene Dunaetz of Hayfork, who noted that the tax rate has been at 5 percent since 1965 and even at 10 percent, "we'd still be the lowest in the state."

Also known as a "bed tax," the transient occupancy tax generated just over $190,000 in 2006/07. Trinity County takes 10 percent of the revenue for administration of the fund and though it's a general tax, the board of supervisors traditionally distributes the remainder to various organizations whose activities promote Trinity County tourism. Annual recipients are the three chambers of commerce, the Jake Jackson Museum in Weaverville, Trinity County Arts Council, Trinity County Fair Association and the Humboldt/Trinity Recreation Alliance in Southern Trinity County.

Previous efforts to gain voter approval for an increase in the hotel tax rate have failed. The last ballot measure to raise the rate and declare it a special tax for promoting the county and for law enforcement failed to garner the two-thirds majority of votes required for passage of a special tax. A general tax increase only requires a majority of votes plus one, but that wasn't successful either.

As costs go up and competition for the funds intensifies each year, the various recipients of hotel tax revenue have been discussing possible ways of approaching another attempt to raise the rate to 10 percent. Representatives of the chambers of commerce recently requested that the board of supervisors consider placing a rate increase on the November ballot. Though not scheduled as an action item, the group's proposal was presented to the board as an informational item during its first meeting in July.

After hearing a number of divided viewpoints during that presentation, the group has since decided to hold off on the ballot request for this year and conduct more community discussions about how to proceed for the future.

The proposal presented to the board would seek voter approval to raise the hotel tax rate from 5 to 10 percent and convert it to a special tax to be used solely for promoting the county and for public safety.

It would allocate 10 percent of the revenue to the county as an administrative fee and distribute a locked-in percentage of the remaining funds as follows: 40 percent to the Trinity County Chamber of Commerce; 5 percent to both the Weaverville and Hayfork chambers of commerce; 12 percent to the museum and arts council; 9 percent to the fair; and 3 percent to the Humboldt/ Trinity Recreation Alliance. The Trinity County Fire Chiefs Association would be added to the list and receive 14 percent of the revenue.

The concept drew a mixed reaction from board members.

Supervisor Judy Pflueger said she was glad to see movement toward increasing the rate to at least 10 percent which would still be one of the lowest in the state, but asked for more details about the group's intent and direction for using the money.

"I'm concerned that spreading it so far and thin to so many parties isn't going to accomplish what we all want which is to promote the county as a whole, all working together," she said. Furthermore, she argued that listing the specific recipients is restrictive and doesn't leave the door open for new ones who might have good ideas for promoting the county.

Pat Zugg said she agrees "it would be nice to concentrate it all into one, but I don't think it will pass that way. We've all worked hard to get this passed before and it hasn't. This is the first time I've seen everybody coming on board and the way to do that is to guarantee that everybody will get some of it."

Supervisor Howard Freeman suggested that the effort might be more successful if it starts with circulating petitions to place the item on the ballot rather than asking the board of supervisors to put it there.

"If we do it, it comes across as government putting its hand out which isn't as successful," he said.

Supervisor Jeff Morris thanked the group members for taking the lead in the effort, but said he also is concerned "we're just continuing to split the pie in the same small parts and we don't have the economy of scale to really do something." He added that he is fearful of any proposal that would lock in the percentages "and accountability if someone isn't performing. How do we deal with that?"

From the audience, Gail Goodyear of Weaverville said she is also concerned about the lack of accountability that could result from guaranteeing the recipients a specific annual percentage of the revenue.

She suggested that each recipient should be required to prove eligibility and present an annual plan for the money as well as a full accounting of how the previous year's allocation was spent.

"I'm really concerned about the percentages and locking something in forever and ever," she said.

Howard Freeman shared the same concern, saying "it's not that I don't trust people to try to do the right thing with the money, but all these organizations have had challenges - memberships fall off, but the dollars stay the same and from a voter's perspective, there's no assurance."

Bill McCoy from the Trinity County Historical Society defended the percentage concept, saying the groups are accountable to their members "and if we don't perform, we suffer the consequences. Percentage is a good thing - it lets the voters know what they're voting for and won't create another bureaucracy to administer it aside from the one we already have with the county."

Time is short to circulate petitions for a November ballot measure and Pat Zugg said she feels more discussion is needed with all the entities involved "to decide whether to go for signatures or what and to address the accountability portion. Maybe we need to wait until next year. I don't want to put the effort in just to see it lose again."

Board Chairman Roger Jaegel said he thinks the discussion is very useful "and it's time we did this. We are the lowest in the state - most counties are up around 12 or 13 percent."

"And we're the most beautiful - there's something wrong with that," Morris said.