Measure Y Pits A Struggling City Against A Struggling Industry

Oct 29, 2020

If passed, Measure Y would increase the hotel tax in the City of Monterey by 2 percent beginning January 1. The measure is popular among neighborhood groups, which would receive 16% of the new tax revenue, but not so popular among city hotels.

The measure, in large part, is an attempt to make up for the revenue lost during the pandemic. Monterey Mayor Clyde Roberson said furloughing city employees was one of the hardest things he's had to vote for in his 26 years on the council.

"We had to do furloughs, about 75 people," Roberson said. "And some of the people who work in the city I taught in elementary school." 

But hotel and motel owners say they are also suffering. The chairman of the Monterey County Hospitality Association, Jeroen Gerrese, said the pandemic cost the county $156 million over the summer.

Not only is revenue down, but so is the number of tourists staying overnight. 

“Occupancy was like in the mid-80s in 2019," Gerrese said. "This year, it scratched the 50 percent mark. So, when you then look at the employment impact, we have 27,000 hospitality workers in Monterey County (and) we lost 46 percent of that. That's heartbreaking.” 

Rather than tax out of work residents, Mayor Roberson and the city council decided to increase a tax paid by visitors for rooms in hotels and motels. 

“We wanted to make sure that tourists pay their fair share and maintain our essential services in the city," Roberson said.

He is talking about services like police, fire, parks and housing, improvements to the library, sidewalks and streets. The mayor said it’s a small increase and compared it to the price of a cup of coffee. 

Currently the hotel/motel tax in the city of Monterey is 10 percent. This ballot measure would raise it to 12 percent," said Roberson. "If you think about it, on a $200 room, this increase would be $4. It’s raising the hotel tax one cappuccino and it's paid completely by tourists in our hotels. Residents do not pay a dime.”

The measure needs two-thirds yes votes by Monterey residents to win. 

The hospitality association chairman, Gerrese, points out that the hotel tax is not the only tax paid by hotel guests and the total tax is an important factor for large groups coming to town. That’s particularly important during the off-season in winter. 

“The group business is a lifesaver for Monterey hospitality," Gerrese said. "So when you then add this up for a group that comes to the to the conference center, that is 200 people that stays (and) has breakfast, lunch and dinner and then add that two percent. That becomes a difference maker. That becomes a difference between us and the other destinations that we compete with.”

Napa, Sonoma and San Luis Obispo are destinations that compete with Monterey.

We asked the two to make their final argument to voters: 

“Monterey is a beautiful place to live, work and visit with outstanding services. To preserve this special quality of life, please vote yes to maintain Monterey’s long-term financial stability," Roberson said. "Your yes vote makes sure that tourists take care of Monterey with us.”

“I don't have to tell you that our hospitality business here in the Peninsula is on life support. So that two percent is kind of the extra challenge that we really didn't need,"Gerrese responded. "And sadly it will only slow down the recovery rate for the city. This is one of those watershed moments whereby people say, what in the world were they thinking?

Measure Y appears on the ballot for voters in the City of Monterey. Those who haven’t already voted have until Tuesday to have their say.