Jul. 24, 2009--SOUTH SAN FRANCISCO -- Voters in November will decide whether the city's hotel tax should be increased to help prop up depleted coffers.

"It's going to be extremely important for voters to support this," given the continuing bad economy and a new proposed state budget in which Peninsula cities stand to lose millions of dollars, South San Francisco Mayor Karyl Matsumoto said.

On Wednesday, she and her City Council colleagues unanimously agreed to put a measure on the Nov. 3 ballot to raise the transient-occupancy tax from 9 percent to 10 percent, effective Jan. 1.

The measure needs a simple majority to pass and would generate $600,000 to $800,000 a year, according to a city staff report.

That revenue would go into the city's general fund, which covers day-to-day expenses and showed a $5.1 million decrease for the 2009-10 fiscal year, the report said.

That decline exacerbated by the economic downturn has led to budget cuts involving park maintenance, the school-liaison program and other services, the report said.

The tax increase would provide "an increased revenue stream" while not falling on residents' shoulders, Matsumoto said.

Hotel guests, who primarily are out-of-town visitors on business in the community, pay the tax, the report said. Hotel operators collect the levy and regularly remit the funds to the city.

South San Francisco joins other local cities that will ask their voters to support a hotel-tax

hike in November.

San Mateo, San Bruno, Millbrae, Brisbane and Burlingame seek a bump from 10 percent to 12 percent.

South San Francisco's proposal combined with its conference-center tax of $2.50 per room per night would put the city on a comparable basis with its neighboring communities pending the ballot outcomes, the staff report said.

Mike Patel, manager of the Americana Inn Motel, argued that a higher tax would be a bad idea particularly these days when people are cutting back on travel and lodging expenses.

"Business is very slow right now," he said. "If the tax goes high, it's very hard to get people to rent a room."

Meanwhile, the council also approved raising fees for city services such as planning inspections and recreation programs.

"Most of the fees are consistent with neighboring cities," Matsumoto said. "We're trying to at least break even with costs -- not to make money."

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