The Menlo Park City Council, as part of its annual budget approval, has signed off on putting a hotel tax hike on the ballot but has decided to leave the utility users tax alone.

On June 12, the council passed a $68 million budget for the fiscal year starting July 1, but the budget is balanced on the hope that voters will approve an increase in the city's hotel tax in November.

The budget depends on increasing the hotel guest tax rate from 10 percent to 12 percent. According to staff calculations, passing the higher tax would raise more than $560,000 annually for the city, and bring local rates in line with neighboring cities, including Palo Alto and Redwood City. It would also contribute to a $260,000 surplus in next year's budget.

The council voted 5-0 to put the hotel tax on the Nov. 6 ballot. San Mateo County voters failed to pass a similar measure in the June 5 election, with 52.3 percent of voters opposing the tax increase.

The council also decided to leave the utility users tax at 1 percent. At the same time, it supported continued cost-cutting measures by the city that include reducing staff as possible -- the city lost seven fulltime positions this year, according to a staff report -- and taking small steps such as using electronic agendas instead of paper.

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