Geared toward out-of-town guests to Mission Viejo hotels and short-term rentals, Measure Y will appear on November ballot
On the November 5 Presidential General Election ballot, Mission Viejo voters will consider an increase to the Transient Occupancy Tax (TOT) charged to out-of-town guests staying at the City’s hotels and short-term rentals. An increase to the TOT, commonly known as a “hotel tax” or “bed tax,” will only be used to fund the City’s police services, emergency response and infrastructure and would bring the City’s low TOT rate in line with other Orange County cities.
Mission Viejo’s current TOT of 8% is the lowest rate in Orange County, and passage of the measure would increase it to 12%. Potential proceeds from the special tax could only be used for payment of police services, funding of emergency response, and maintaining City infrastructure assets as necessary including streets, sidewalks, storm drains and trails. Over the past four years, the Orange County Sheriff’s Department agreement increased by over $4 million. The measure is estimated to generate an additional $670,000 annually, and expenditures would be reviewed by an independent auditor and the results disclosed during the City’s annual audit process.
The City Council conducted a Public Hearing at its July 9 meeting to place the measure before the voters. That action followed a Community Opinion Survey that essentially reflected the community in favor of making the TOT more in line with other Orange County cities and asking out-of-town guests to pay more of a share of security and maintenance costs for the City of Mission Viejo.
Additional information about the measure is available on the City’s website on the Election Information page.
Comments
This Press Release mimics…
This Press Release mimics the Ballot Statement in Favor of Measure Y. On July 9, 2024, Mayor Kelley recommended that the Chamber of Commerce write the argument in favor of the TOT measure and the Council agreed by consensus.
I wrote the following official Rebuttal:
The OCRegister opposes this tax increase and wrote: "Instead of being an excuse to increase the tax, enjoying the lowest TOT in OC ought to be Mission Viejo's brand."
Why is the Mission Viejo Chamber promoting taxes? Aren’t chambers supposed to advocate for businesses and oppose taxes?
According to the OCRegister, Chapman University Economic Research Director Raymond Sfeier states: higher TOT caused sales to drop at adjacent businesses. And from the study, "Taxing the Travelers," a $5.00 increase caused a decrease in occupancy.
Raising taxes actually harms the very businesses it claims to help.
Visitors have a budget. More taxes mean less spending.
Claiming that raising the TOT in Mission Viejo would make it more competitive with other cities is ludicrous. Raising prices does NOT make ANYTHING more competitive.
So, what’s the real goal for this 50% tax increase? Clearly, raising hotel prices would impair, not increase, visitor spending.
FACT: A $670,000 increase would be a very small percentage, which would NOT support all the promises for enhancement to public safety and infrastructure.
FACT: TOT revenue has a correlation with the health of the economy. There was a significant drop in TOT revenue with the Great Recession.
More recently, a 25% decrease because of COVID. It’s foolhardy to rely on TOT for public safety.
FACT: Having one of the highest tax rates in the County could send visitors to neighboring cities.
Don’t be fooled by the Chamber’s emotional argument. Let's keep Mission Viejo competitive.
A NO vote means more spending in Mission Viejo.
Cathy Schlicht, former Mayor, Mission Viejo