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April 12, 2016 — April Regular Elections
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City of El Segundo
Measure B - Majority Approval Required

To learn more about measures, follow the links for each tab in this section. For most screenreaders, you can hit Return or Enter to enter a tab and read the content within.

Shall the hotel tax measure which increases transient occupancy taxes on lodging from 8% to 12% (indefinitely increasing annual general fund revenues by an estimated $3,200,000.00) for all City services be adopted?

What is this proposal?

Measure Details — Official information about this measure

YES vote means

A “yes” vote on Measure B favors the Measure.

NO vote means

A “no” vote on Measure B opposes the Measure.

Impartial analysis / Proposal

City Attorney

Measure B would adopt an ordinance amending the City’s transient occupancy tax (“TOT”) otherwise known as the “Hotel Tax” (this Analysis refers to it as the “Measure”). If approved, the Measure would increase the TOT from 8% to 12%. The TOT requires each person, or “transient,” to pay a tax to the City when occupying space in any hotel, all as defi ned in the El Segundo Municipal Code. Hotel operators collect the TOT from transients on the City’s behalf. TOT revenue collected by the operator is then remitted to the City. Hotel operators do not pay TOT; this tax is only paid by persons staying at a hotel. Currently, the City charges an 8% TOT; Measure B would increase this percentage to 12%. As a result, public documents estimate that the City would receive an additional $3.2 million per year. The City can legally use such revenue for its general governmental purposes. To be adopted, the Measure must be approved by a simple majority of the voters in the city of El Segundo.

Published Arguments — Arguments for and against the ballot measure

Arguments FOR

VOTE YES on Measure B! Why? Measure B adjusts El Segundo’s Transient Occupancy Tax (TOT or ‘hotel tax’) to market rate while retaining the City’s competitive edge. It provides revenue to fund capital improvements, infrastructure, increase services and necessary personnel. Measure B funds may also be used to promote economic development and El Segundo tourism. Your YES vote generates an estimated $3,200,000 in annual revenue for El Segundo’s General Fund. This revenue comes from hotel visitors who benefi t from City services without taking money out of El Segundo residents’ pockets. All TOT revenue goes directly to the City of El Segundo. Best of all, the State and Los Angeles County can NOT take this revenue. El Segundo’s TOT has been 8% since 1996 (20 years). The average TOT rate (including tourism assessments) of cities adjacent to LAX or Long Beach airport is 12.9%. City of Los Angeles – Century Boulevard 15.5% Long Beach 15 % Santa Monica 14% Inglewood 14% Hermosa Beach 12% Redondo Beach 12% Hawthorne 12% El Segundo 8% The proposed 12% TOT rate remains lower than the average of El Segundo’s surrounding areas. A YES vote on Measure B increases General Fund revenue for important infrastructure improvements and services throughout the City of El Segundo. Please vote YES on Measure B.

— City Clerk

Arguments AGAINST

VOTE NO on Measure B, the BAIT-AND-SWITCH Tax Hike. The City lured hotels with a Business Attraction Program and a lower competitive Hotel Transient Occupancy Tax (TOT). Measure B is a whopping 50% INCREASE in the TOT, from 8% to 12%. The TOT is IN ADDITION to the existing property tax, business license tax, and Utility Users Tax (UUT) on hotels for electricity, water, gas, and all “communication services”. Measure B is PERMANENT! There is NO SUNSET CLAUSE (expiration date), even though new development should provide millions in new City revenue, in addition to millions more from Chevron. There is NO GUARANTEE any new tax money will go to infrastructure! Even if some of the new taxes are used for infrastructure, where will the rest be spent by future City Councils – on even HIGHER SALARIES, BENEFITS, AND PENSIONS? There is NOTHING in Measure B to control discretionary spending. TWO WRONGS DON’T MAKE A RIGHT. It’s not right to charge high taxes just because “other cities are doing it”! ALL TAXES COMBINED are MUCH TOO HIGH! Residents already voted down residential trash fees, the Measure O tax hike, and the Measure A resident and business tax increases that were excessive, but City Councils keeps coming back for more money. The City Council majority can change every two years. Any future majority can reverse cost savings from a previous majority and lock-in the City to irresponsible cost increases for many years, expecting to raise taxes and fees on businesses and residents. VOTE NO on Measure B to tell future City Councils they must be responsible with taxpayers’ money. City Hall should be open on Fridays. VOTE NO on Measure B to tell Businesses that El Segundo is Stable and OPEN FOR BUSINESS. Visit regularly for more information.

— City Clerk

Replies to Arguments FOR

VOTE “NO” on Measure B. Don’t be fooled by misused economic terms and cherrypicked data! Taxes are not at “market rate” when politicians unilaterally impose them and use government’s police power to forcibly collect them. Measure B will DESTROY El Segundo’s competitive edge and longtime reputation as a business-friendly city. Hotel room rates and TOT revenue have increased signifi cantly since 1996 (20 years). Annual TOT revenue is UP $1.5 MILLION (38%) since FY 2009-10 WITHOUT RAISING TAXES (see The proposed 12% TOT will place El Segundo at 24% above the 9.69% average for 483 California cities and counties. TAX PERCENTAGE RATES should not keep increasing to pay for excessive increases to already unsustainable government employee salaries and pensions that far exceed the private sector. One City employee got a 23% raise and was paid nearly $600,000 total in his last year! (See PublicSafetyProject. org.) Measure B is TAXATION WITHOUT REPRESENTATION because it taxes hotel guests who can’t vote on it. The City Attorney said a resolution on how to spend the money IS NOT BINDING, and only language in the ballot measure can be binding. City Council chose the NONBINDING route! The hotel industry doesn’t need hotel tax hikes to “promote tourism”. City Council raised Chevron’s taxes by more than $8.5 MILLION average per year for 15 years in 2013. Development of the 142 acre Raytheon property will provide El Segundo with $5 MILLION in fees plus an estimated $2.6 MILLION annual tax revenue increase. VOTE “NO” on Measure B!

— City Clerk

Replies to Arguments AGAINST

VOTE YES on Measure B. THIS City Council has been committed to improving the City’s fi nancial health. The plan of action included: controlling spending, cutting back on expenses, increasing the City’s reserve and ‘emergency/disaster’ funds, collecting fees to sustain services and reducing the number of employees by 25% over recent years. THIS City Council does not spend money it doesn’t have, but the time has come to stop deferring much-needed projects to keep our residents and visitors safe. For too many years, City Councils deferred important infrastructure projects including sidewalks, streets, buildings (Joslyn Center, Recreation Park Club House, Plunge, and City Hall just to name a few), along with strategic infrastructure for business attraction and economic development. In addition, the City is responsible for more than $106,500,000* in unfunded CalPERS liability (employee retirement and benefi ts). Measure B increases City revenues by taxing transient visitors. Residents and businesses will NOT pay the TOT unless they stay in El Segundo hotels, motels and lodging. Los Angeles County awarded the 2015 Most Business Friendly City EDDY Award to El Segundo. City Council and City Employees are committed to retaining the City’s Business Friendliness and providing world-class infrastructure to our businesses and residents. Your support of Measure B will provide revenue required to perform repairs and improvements and increase reduced levels of service. Let’s make this about what’s right for our City. Please VOTE YES on Measure B! *Fiscal Year 2014

— City Clerk
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