The Almanac

Almanac News

August 30, 2012


Hotel tax: Menlo Park challenges ballot language
City fights "misleading" rebuttal argument

by Sandy Brundage
Almanac Staff


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."

This article is also available at the Web site of The Almanac, here.

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