Viewpoint - July 28, 2010

Letter: Hotel occupancy tax could backfire

It's a sign of the times. Last week the Menlo Park City Council voted to raise the hotel occupancy tax in our city from 10 percent to 12 percent, with the logic that if Palo Alto charges that much, we should. (Redwood City charges 10 percent). This tax is the city's favorite as it's not shared with the state or county like other major taxes.

Of course this is passed on to the hotel guest, who is not a Menlo Park resident, so what's the problem? According to the manager of the new Rosewood Hotel, it will reduce his volume because currently there's an advantage to booking premium rooms in Menlo Park compared with Palo Alto (and interestingly, this market also competes with San Francisco as a destination).

In other words, we may be squeezing the golden goose too hard and may actually reduce the tax receipts. Put this in the same category as deferring library hours and deferring road, parks and systems maintenance — which we have done repeatedly: not good.

In spite of the city's largest income sources (our share of real estate taxes) being up $8 million in the last nine years — more than the entire drop in sales taxes — we are still falling behind because of personnel costs. We won't get our basic city services back to 100 percent until we tame those expenses, and we need leadership that will do it.

Henry Riggs, Callie Lane, Menlo Park


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