April 21, 2012 - Pomona tax plans possible
Paper: Inland Valley Daily Bulletin (Ontario, CA)
Title: Pomona tax plans possible
Date: April 21, 2012
Author: Monica Rodriguez, Staff Writer
POMONA - Depending on how the City Council acts, Pomona voters could find a ballot in their mailbox this summer with two tax measures for them to vote on.
City leaders are exploring increasing the city's Transient Occupancy Tax -- a tax hotel guests pay -- and the Property Transfer tax rate, usually paid by the seller at the time a piece of real estate is sold.
Councilman Steve Atchley said increasing the two taxes could get Pomona voters' approval.
"People will support (the Transient Occupancy Tax) because it's on outsiders," he said.
In addition "most travelers are business travelers and I don't think they pay that close attention to taxes."
An increase to the city's Property Transfer tax rate could also garner voters approval, Atchley said.
While he doesn't like the idea of increasing taxes, "if you had to impose an increase in taxes these are the less objectionable," he said.
The two taxes could provide a way of generating some revenue of for the cash-strapped city's general fund, which is used to pay for services such the library, public safety and parks and recreation.
Proposition 218 requires voter approval to increase any taxes, according to a city staff report.
Because the revenue from both taxes would go into the general fund a simple majority of votes cast would be needed to for the taxes to pass.
The Transient Occupancy Tax, also referred as TOT, is now set at a 10 percent rate and would be increased to 12 percent at all 20 of the hotels in the city, said Paula Chamberlain, the city's finance director.
After 30 days in the same hotel, a guest wouldn't pay the tax, she said.
Some cities with 10 percent TOT rates have raised them to 11 or 12 percent. One city, Anaheim, has a 15 percent TOT "but they have the draw that we don't have," Chamberlain said, referring to Disneyland.
A TOT increase could generate about $288,000 a year for the city, the staff report said.
The city's Property Transfer tax rate is $1.10 per $500 of property value at the time of sale, according to a city staff report.
The tax is generally paid by the seller unless the buyer and seller negotiate who pays it, Chamberlain said.
The median price of a house in Pomona is $209,000, which means a seller currently pays a city Property Transfer Tax of $460, she said.
If voters approve an increase the rate would go to $2.20 per $500 of property value.
With the higher rate the seller of the $209,000 house would pay $920 in transfer taxes, Chamberlain said.
The increase could generate about $1 million for the 2012-2013 fiscal year, the staff report said.
Pomona is currently looking for ways to close a $2.5 million budget gap.
Should both taxes get voter approval they would help generate some revenue but wouldn't address all of its financial needs, Chamberlain said.
Still "every little bit helps," she said.
Mayor Elliott Rothman said Pomona voters just might support an increase to the two taxes.
"It would be taxes they already have," he said.
City Council members have yet to determine if they will place both items on a ballot but if they decide to do so the measure will be placed on a mail-in ballot.
At their April 16 meeting council members expressed an interest in trying out an all-mail ballot election.
They would like to test that voting system but only once and for the two possible tax measures.
City staff are expected to present council members a proposed ordinance at the May 7 Council meeting that if approved would authorize an all-mail ballot election that would take place Aug. 28 and would sunset once the election is completed, said Pomona City Clerk Marie Macias.
At that time the Council would also have to support a resolution declaring a fiscal state of emergency to have a tax measure appear on a non-regularly scheduled election.
California law only allows all-mail ballot election to to take on certain dates in March, May and August of each year, the staff report said.
An all-mail ballot election would cost about $122,288, the staff report said.
The November election with four council seats on four ballot measures would cost about $205,000.
The November ballot is expected to have three measures on it, two related to changes to the city charter.
Each measure costs the city $15,000, Macias said.
Should council members approve moving forward with an all-mail ballot the next step would be to approve calling the election, something that would go to council May 21, Macias said.
Record Number: 20453109
(c) 2012 Inland Valley Daily Bulletin. All rights reserved. Reproduced with the permission of Media NewsGroup, Inc. by NewsBank, Inc.