Panel OKs 1-Cent Hotel Room Tax Rise : But Allocations for Soviet Arts Festival, Park Face Lift Are Denied

A San Diego City Council committee agreed Wednesday to increase the city’s hotel room tax by another penny on the dollar next June, but refused to allocate revenue from the tax increase to Mayor Maureen O’Connor’s proposed Soviet arts festival or improvements in Balboa Park.

The 5-0 vote by the council’s Rules Committee sent the issue to the nine-member council without a recommendation, and temporarily leaves open the question of whether the city will provide as much as $3 million to finance the festival.

O’Connor remained confident Wednesday that she could gather the five votes needed to commit city revenues to the festival, tentatively scheduled for Oct. 21, 1989.

Jousting Over Plan

“We’re 50% there,” she said after a three-hour hearing during which representatives of the political right jousted with the mayor over her plan to invite Soviet artists to perform here. “Now it’s the allocations (which must be decided). If it was going to be stopped, it was going to be stopped here. And it wasn’t.”

But, if committee members were not willing to quash the festival, which O’Connor has made the centerpiece of a proclaimed “year of the arts,” neither would they commit themselves to spending $3 million in city tax revenue over the next two years without an approved festival budget. Nor would they agree to borrow $45 million to renovate Balboa Park without an explanation from City Manager John Lockwood about how the financing plan would work.

“You need to get these people to sit down and give you a budget, and we have to take a look at it,” said Deputy Mayor Gloria McColl, a staunch ally of O’Connor’s. “It is not laid out.”

Financing Plan Questioned

Councilwoman Abbe Wolfsheimer questioned Lockwood’s financing plan for Balboa Park improvements after private financier Miles Broxton claimed that the money would allow the city to borrow just $23 million. Lockwood strongly denied the claim, and promised to provide more details when the full council takes up the issue.

In June, the council raised the hotel room tax from 7% to 8% effective Aug. 1, and assigned an ad hoc panel to look into an additional 1% increase. If approved by the council, the overall 2% increase would bring the hotel room tax to 9%, still one of the lowest rates of the 15 major cities with which San Diego competes for convention business.

Matching Funds Promised

It would also generate an additional $8.2 million annually in revenue. The committee suggested using $4.1 million to pay off bonds for $45 million in improvements to Balboa Park, spending as much as $3 million over two years on the arts festival, and spending the rest to promote the city and support local arts groups.

O’Connor has promised to match the city’s contribution to the arts festival with private donations that she will raise. McDonald’s restaurant chain magnate Joan Kroc has already donated $1 million, and O’Connor said Wednesday that she is soliciting contributions from Great American First Savings Bank, Pacific Bell and other corporations and foundations.

The arts festival dominated Wednesday’s hearing, with a parade of arts leaders touting its impact on the local economy and benefits to schoolchildren and arts lovers.