Hotel tax: Menlo Park challenges ballot language

City fights "misleading" rebuttal argument

Ballot review came to a screeching halt in Menlo Park recently when a perusal of the rebuttal to Measure K, the city's proposal to raise the hotel tax from 10 to 12 percent, lighted upon the following sentence:

"Charging hotel taxes at rates higher than those (in) neighboring cities discourages travel and penalizes businesses that cater to travelers, i.e. restaurants, bars, tourist attractions, etc."

Problem: The hotel tax, otherwise known as the transient occupancy tax (TOT), would match that of neighbors Redwood City, East Palo Alto and Palo Alto if increased.

The Libertarian Party of San Mateo County in coordination with the Silicon Valley Taxpayers Association (SVTA) wrote the rebuttal. City Attorney Bill McClure said that after discussing the issue with the authors, the city took the case to court on Aug. 20 to get the language changed to "eliminate what we felt was misleading if not false information. Their agreement to amend the ballot argument did not include an admission that language was misleading."

The sentence was rewritten to read, "Increasing hotel taxes discourages travel and penalizes businesses that cater to travelers, i.e. restaurants, bars, tourist attractions, etc."

"The city appears to be claiming that 'neighbor' means 'adjacent'," said Harland Harrison, who signed the rebuttal. He pointed out that some Peninsula cities – San Carlos, for example – do have a lower hotel tax. "Webster's Dictionary says otherwise, and I think they are just trying to harass and silence us."

Mr. Harrison, who chairs the San Mateo County Libertarian party, said he hadn't seen the change, noting that the association agreed to the stipulation on his behalf. "I do trust SVTA, but I think due process should at least require notifying me before changing the argument printed above my name."

Rebuttal author Mark Hinkle said he's been opposing government-imposed taxes for more than 25 years. "As a Libertarian, my view is that taxation is theft and thus immoral. So, it's my duty to protest any time elected officials put tax increases on the ballot," he explained. "I also write arguments and rebuttals because, frankly if I don't, it's very likely no one else will. Of the five other ballot arguments that I wrote in San Mateo County, only one had another argument against it."

He didn't think the court-ordered change significantly impacted the argument that tax increases are bad business. In Mr. Hinkle's view, tax increases equal depressed economic activity, which means less money for everyone, whereas tax cuts lead to higher revenue.

"Any way you look at it, it's all bad. If Menlo Park wants more revenue, they should reduce the TOT to make Menlo Park hotels more competitive compared to neighboring cities' TOT."

Mr. Hinkle maintains that the original wording of his rebuttal was accurate. "I still maintain that's a true statement. I didn't say Menlo Park charges a TOT higher than neighboring cities. It's a general statement that is true," he commented. "I personally would have fought the deletion, but then I'm not the President of the SVTA, and it's not my budget that's on the line, i.e. loser pays court costs."

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Posted by Hank Lawrence
a resident of Menlo Park: Sharon Heights
on Sep 2, 2012 at 6:19 pm

Menlo Park is a very desirable destination city. We have two types of hotels:

1) Luxury Hotels such as the Stanford Park and the Rosewood, and
2)Hotels that compete on price such as the Mermaid Inn

The Menlo Park Luxury hotels compete against the Four Seasons in East Palo Alto, the Garden Court in Downtown and the Westin Palo Alto.

The Mermaid Inn's competition are the price concious hotels in Redwood City.

By having a lower TOT rate than the surrounding communities makes Menlo Park a more desirable hotel destination than East Palo Alto, Palo Alto and Redwood City. What little is lost on the TOT rate is more than made up by our sustained volume.

We don't want to see our TOT revenues decline because we have unilaterally forfeited our TOT rate advantage.

This is not the time to be greedy. This is the time to be smart. We need to be focused on maximizing TOT revenues not maximizing TOT rates. If we raise the TOT rates we will see a dispoportionate decline in hotel bookings which will result in less TOT revenues. We don't want to give away our competitive TOT rate advantage.

Keeping the TOT at 10% is a win-win for the City of Menlo Park and our local hotels.

Like this comment
Posted by Menlo Voter
a resident of Menlo Park: other
on Sep 2, 2012 at 6:46 pm


I hate to tell you this, but when most people book a hotel room they don't pay any attention to what the hotel taxes are. Maybe you do because [portion deleted. Please don't attack posters], but no one else does. We book our rooms based on location and the base rate. Don't believe me? Go on line and book a room. See when the room taxes show up.

Raise the tax. I will have no effect on booking rates.

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Posted by reasonable
a resident of Menlo Park: other
on Sep 2, 2012 at 8:36 pm

I'm with Menlo Voter, [portion deleted]. I've never seen the tax until I pay the bill. Hank should find a new hobby.

Like this comment
Posted by POGO
a resident of Woodside: other
on Sep 2, 2012 at 8:36 pm

True, MV. People who stay at the Stanford Park and Rosewood pay no attention to tourist taxes on their hotel bills. Or their mini-bar bills, for that matter.

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Posted by Bob
a resident of Menlo Park: Downtown
on Sep 3, 2012 at 9:01 am

I agree that people don't pay attention to the actual amount of the tax until they see the bill.

However, taxes such as these are usually passed on to the customer which mean higher hotel rates. Therefore, a person looking for a hotel might be more inclined to stay in Menlo Park than other cities if the rates were lower.

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Posted by Joanna
a resident of Menlo Park: Downtown
on Sep 3, 2012 at 12:59 pm

How will the city waste (oh, I mean use) the extra money?

More six figure salaries?

Like this comment
Posted by POGO
a resident of Woodside: other
on Sep 3, 2012 at 5:28 pm

If you (more accurately, your company) can afford $400+ a night, I don't think you're really gonna think about (much less sweat) the sales tax.

Like this comment
Posted by Gov't Out of Control
a resident of Menlo Park: other
on Sep 4, 2012 at 1:27 pm

I book hotels online quite a bit. You do see the total including the taxes before you confirm the reservation for online bookings. (Car rentals are different.)

I agree that a person booking a $400 a night hotel for a non-business trip may not be bothered by the extra tax. However, an increase in tax may effect the corporate accounts that have on-going business relationships with hotels.

Like this comment
Posted by Henry Fox
a resident of Menlo Park: The Willows
on Sep 5, 2012 at 12:40 pm

When you book online--which most of us do--you see all fees and taxes as part of the room rate. The decision is based on the bottom line.

What annoys me is that after one month in Menlo Park, our new city manager proposed a TOT increase. Watch out.

Like this comment
Posted by It's Just Not That Difficult
a resident of Menlo Park: The Willows
on Sep 5, 2012 at 10:01 pm

Hank, the TOT rate will not affect bookings. But even if you were to buy the argument that a lower TOT rate gives our hotels a competitive advantage, why should the residents and other businesses provide Menlo Park hotels with a competitive advantage when it means significantly less revenue for the city of Menlo Park? Why don’t we allow the hotels and motels to develop their OWN market advantage, as other businesses have to do?

And Henry, the proposal to raise the TOT was raised at least two years ago. The Council held off because of the uncertain economy, but I agree with Rich Cline – the increase is just a long over-due market correction.

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Posted by James
a resident of Menlo Park: other
on Sep 6, 2012 at 1:20 pm

The discussion about whether the rate should be higher or not misses the point of the article, which is about whether the ballot language is misleading. So back to the point, Webster's ( does _not_ "say otherwise" on "neighboring" -- it has "to adjoin immediately or lie relatively near to" as the definition. I don't think MP's usage is misleading in regard to EPA, PA and RC, which clearly meet the first listed sense in addition to the second, in a way that more distant towns like SC do not.

Like this comment
Posted by Bob
a resident of Menlo Park: Downtown
on Sep 6, 2012 at 8:46 pm

Does the City's budget rely on the passage of this tax to be balanced?

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Posted by POGO
a resident of Woodside: other
on Sep 7, 2012 at 6:10 am

Again, whether it's for business or pleasure, people who stay at a Rosewood Hotel for $400+ a night - not a Holiday Inn or Comfort Inn - don't pay attention to the taxes on their hotel bill.

I just reserved a rental car at the Philadelphia airport from a major on-airport company. The taxes were actually MORE than the car rental.

Sorry, but further commenting on this topic has been closed.

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