Despite peak season for hotels in Santa Barbara, hotel tax revenue projected to fall short of city budget
SANTA BARBARA, Calif.—Janet and David Leathem couldn’t think of a better place to celebrate over 5 decades of love.
But Santa Barbara marks a huge transition from what they’re accustomed to in Portland, Oregon.
“ One of the pros of Portland is the no sales tax. So this is a big change with the tax, you know, coming here to California. But we were aware of that,” said Janet Leathem.
Tourism makes up a huge part of Santa Barbara’s economy— with sales tax and transient occupancy tax accounting for the largest general fund revenue sources.
“We get taxed so heavily at this point. It's just like part of life. It’s part of living,” said Dustin Chao and Tyah Ejan, who are visiting from Los Angeles.
Santa Barbara Finance Director Keith Demartini says it’s been an interesting year financially.
“We saw a lot of pent up demand in the tourism industry from our tax revenues that we saw here in the city of Santa Barbara and sales tax and transient occupancy tax about people coming and visiting and spending money here locally. But that trend has definitely softened and leveled off. It's not growing at the same rate that we saw a couple of years ago, it's definitely softened out,” said Demartini.
The city of Santa Barbara budgeted about $28 million dollars for this year’s transient occupancy tax revenue.
Now, it’s projected to come in around $27 million dollars.
Right now, there's a proposal to increase the hotel tax in unincorporated areas of Santa Barbara County if a poll finds there's enough public support— an increase that some tourists say they don’t mind paying.
“I think if it does go back to the community to keep it safe and to keep locals and people like us who come and visit safe, then I think it's it's worth that bump increase personally for me,” said Dustin Chao, who is visiting from Los Angeles.
The transient occupancy tax is currently accounting for 12 percent of hotel guests’ stay in Santa Barbara.
