ANAHEIM : City Hotel Tax Hike to Fund Improvements

Anaheim will increase its hotel room tax from 10% to 11% starting next summer to pay for public improvements in areas around Disneyland and Anaheim Stadium.

“It’s one more thing to help our tourist areas,” said Ken Stone, the city’s program development and audit manager.

The City Council voted 5-0 Tuesday night in favor of the increase, which is expected to generate about $2.5 million annually starting in the fiscal year that begins July 1, 1990. This year, the tax poured nearly $30 million into city coffers, making it the largest single contributor to Anaheim’s general fund.

The city could borrow against the $2.5 million in new revenue to finance $24 million in public improvement projects, according to a staff report by Ron Rothschild, administrative services director.

Anaheim’s hotel owners, who were told about the tax hike by city officials, did not oppose it. They welcomed the street improvements planned for the area, said Assistant City Manager Jim Ruth.

New tax revenue also will help pay for street and sewer improvements for the $85-million sports arena proposed for 17 acres northeast of Anaheim Stadium.

And the tax increase may also help underwrite the city’s investment in the 21,000-seat arena, scheduled to break ground early next year. As part of the yet-to-be-approved contract under which the arena will be built, Anaheim will subsidize the arena up to $1.5 million a year for the first 10 years of operation if the arena operates in the red, Ruth said.