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Council votes to raise hotel tax in November

Turlock voters will consider raising the tax on hotel stays in November, but they will not be asked about a cannabis tax.

The Turlock City Council voted Tuesday to put a transient occupancy tax increase on the ballot, but not a cannabis tax.

Currently, the TOT is 9 percent, and voters will opt for a vague rate of “not more than 14 percent.” This wording gives the council – and future councils – the ability to raise or lower the rate by resolution, rather than by vote. Raising the rate above 14 percent would again require voter approval.

The last action on TOT was taken in November 1991, when the rate was increased from 5 to 9 percent, according to a city report.

Tuesday’s vote (4-1) – Mayor Amy Bublak voted against – authorizes city staff to make all necessary preparations and request the Stanislaus County Board of Supervisors to allow the county election official to place the proposed tax increase on the ballot.

“As mayor, I do not support additional taxes on our city because I believe in promoting economic growth and using existing resources efficiently,” Bublak said. “By creating a favorable environment for businesses and ensuring that current revenues are wisely managed, we can achieve our goals without placing further financial burdens on our citizens.”

The city estimates that annual revenue could increase by $1.1 million.

“We meet with the hoteliers quarterly – we call it the Hotel Council Meeting – and they have not opposed the 14 percent increase,” said Anthony Sims, the city’s economic development director. “We have told them that. There is no opposition.”

Darshan Bhatt, manager of the Travelodge by Wyndham, 201 W. Greenwood Ave., disputed Sims’ claim.

“Honestly, no one has contacted us,” Bhatt said. “And increasing the TOT would make things increasingly difficult for us.”

Darren Phillips, GM of the Days Inn by Wyndham, 195 N. Tully Rd., said he has attended regular meetings with the city.

“We used to meet monthly, now it’s quarterly,” Phillips said. “We’ve discussed (the TOT) at previous meetings. The mayor even mentioned that there’s some sort of clause that if it hurts us, the amount could be reduced. I honestly don’t see a big problem with that.”

Messages to five other Turlock hotels went unanswered, while a sixth hotel declined to comment.

Previously, at its meeting on Tuesday, the council voted 3-2 against putting a proposal for a cannabis tax to a vote.

Turlock’s cannabis program, which launched in 2019 as a five-year pilot program with four retail licenses, required dispensaries to enter into development agreements with the city. Under the DAs, stores must pay a monthly performance fee equal to 5.25 percent of gross sales or $45,000, whichever is greater.

To date, cannabis sales have brought in nearly $5 million in revenue for the city. Firehouse, Perfect Union, Natural Healing Center and the yet-to-open Evergreen Market hold the city’s four cannabis retail licenses.

The council voted in May to accept the recommendations of the Ad Hoc Cannabis Committee – which included council members Cassandra Abram (Chair) and Kevin Bixel – to end the pilot program status and put a tax proposal to a vote.

Abram and Bixel voted for the ballot initiative on Tuesday, while Bublak, Pam Franco and Rebecka Monez voted against it.

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