County supervisors yesterday unanimously agreed to place four tax measures on the June ballot, three of which were described by tourism and rental car officials as unfairly singling out industries already heavily taxed.
The Board of Supervisors, with Supervisor Rose Jacobs Gibson absent, approved the three previously introduced tax measures — vehicle rentals, transient occupancy and parking — as part of its consent agenda without any further discussion. Later in the same meeting, the board also agreed to put a $65 tax renewal proposal for fire and police services in the Highlands neighborhood on the ballot.
But while the renewal proposal received no public opposition — the tax has been in place since 1982 and consistently re-upped every four years since to enhance the area’s level of public safety service — the three new taxes were not as easy a sell even though proponents say the increases are really aimed at tourists rather than residents.
A tax on vehicle rentals in the unincorporated areas will be "extraordinarily detrimental to our business,” said Dan Harvey, general manager with the Hertz Corporation.
William Withington, representing both Enterprise Rent-A-Car and Alamo, said the tax will create "immediate harm” and asked the board to pull the item from the consent agenda and table it for a later discussion.
The board declined.
An increase in the transient occupancy tax would put the county on par with neighboring jurisdictions. The county currently charges 10 percent and a change to 12 percent would generate an extra $200,000 yearly based on current receipts of approximately $1 million, according to the County Manager’s Office.
The county doesn’t currently tax parking facilities but several cities like Millbrae and South San Francisco do. Of the approximately $80.9 million in gross receipts created by SFO, nearly $63 million falls in the unincorporated area. Assuming the figures stay roughly the same, a business license tax of 8 percent would generate approximately $4.9 million annually.
A 2.5 percent business license tax on the operators of vehicle rental businesses would bring in approximately $7.75 million in general fund revenue annually based on the $310 million in receipts generated in 2010.
Both Harvey and Withington said the industry is already heavily taxed, ticking off 10 percent to the county of San Francisco for $30 million annually, $16 million in rent, a $20 transaction fee for the AirTran at San Francisco International Airport, a 2.85 percent state tourism fee and three separate taxes already directed specifically to San Mateo County.
"We are already paying our fair share,” Withington said.
The speakers acknowledged the county’s desire to bolster its finances but said the funds collected will do nothing to improve the rental experience for customers or for employees, many of whom call the county home.
Jon Bauesteros of the San Francisco Travel Association said the proposed hotel occupancy tax coupled with the rental vehicle tax will have a "devastating impact on our economy” and spur tourists to look elsewhere. He also said 35 new travelers equals one job in the region.
Federal law prohibits the county from exclusively taxing airport-related business so the taxes, if approved, will apply to all commercial operators in the unincorporated area, including restaurants with valet parking and hotels that charge separately for parking.
The county tried similar taxes in 2008 but both failed with just more than 52 percent voters opposed. After the election, county supervisors blamed a lack of active campaigning.
But yesterday’s speakers said the defeat is a sign the supervisors should not try again.
"The voters have already spoken,” Withington said.
The county will spend $280,000 to place the three measures on the ballot — $200,000 for the first and $40,000 for each additional.
The county will also pay to put the fire and police tax before June 5 in the service area commonly known as the Highlands. Currently, the county contracts with Cal Fire to protect all the unincorporated areas like the Highlands but voters there also pay $65 per parcel to increase the level of service. The tax was set at $65 in 1996 and generates about $92,000 annually.
Michelle Durand can be reached by email: email@example.com or by phone: (650) 344-5200 ext. 102.