We reluctantly recommend voters support the city of Palo Alto's proposal to raise about $2.5 million a year in new city revenue by increasing the transient-occupancy tax from 14 to 15.5 percent. If it passes with the required simple majority vote, it would be the third increase in the last 11 years and will make Palo Alto's hotel tax the highest in the state.
Raising the cost of an already expensive hotel room by a few dollars is an easy sell to voters. It won't cost residents a dime but will benefit them by providing funds for the city's general fund.
Although there are no restrictions on how the money is used, the commitment being made by the city is that it will be spent on priority infrastructure projects, including the long-sought new public-safety building, renovations to old fire stations and a new parking garage serving the California Avenue area. There is a bit of false marketing of this measure in the official ballot description, which incorrectly implies that the city's 911 system is vulnerable without these new funds and doesn't even mention the public-safety building. Earlier polling showed citing the 911 system and omitting the word "infrastructure" would attract the most voter support — hardly the proper way to craft ballot language.
City staff and the council didn't do their best work on this proposal, and we would have preferred a more honest description and the use of other funding sources with a greater nexus to the infrastructure projects to be funded, such as a business tax or bond measure. But further delay in addressing the accumulated capital projects will only make these necessary projects more expensive.