Newport Beach : Hotel Bed Tax Hike Gets Preliminary Approval

At the request of the Newport Harbor Chamber of Commerce, the City Council has given preliminary approval to a hike in the city’s hotel bed tax from 8% to 9%, beginning July 1.

Also known as the transient occupancy tax, it is an additional tax levied on hotel visitors based on the room rate. For example, if a room costs $100 a night, $8 is now added to the rate.

The chamber asked the council for the 1% increase in hopes of being able to use the estimated $385,000 the tax would generate to promote the Newport Beach hotel industry. Newport Beach, with 19 hotels and motels, collected $2.8 million in fiscal 1985 and expects to collect $3.1 million for the year ending June 30, 1986, according to city Finance Director George Pappas. Pappas added that beach rentals rented out for 30 days or less are also subject to the tax.

A final vote on the bed tax is expected April 14. If the measure passes, the monies will go to the general fund. But City Manger Robert Wynn cautioned that the council would have to take another vote to enter into a formal contract with the chamber’s convention and visitor’s bureau for its legal use of the funds.

The issue might get muddied, Wynn added, as other city groups ask for part of the additional hotel tax funds.

On Monday night, a representative from the Newport Beach Arts Commission appeared before the council asking that a quarter of the 1% increase be awarded to the commission to purchase art for public places throughout the city.

In other actions, the council entered into a one-year agreement with American Trolley Lines to operate three bus-like trolleys throughout some of the busier areas of Newport Beach.

The trolleys will begin operating June 1 along the Coast Highway, the Balboa Peninsula and Newport Center.

The vehicles will be in use from 10 a.m. to 10 p.m. every day of the week except for Thanksgiving, Christmas and New Year’s Day. Cost for a ride: 50 cents.