Arcadia : Hotel Bed Tax Goes to 10%

Rejecting impassioned pleas from the city’s hotel managers, the City Council on Tuesday voted 3 to 2 to increase the tax on hotel room bills.

Council members voted to increase the hotel bed tax from 8% to 10%. Robert Margett and Robert Harbicht dissented.

“No one is going to convince me raising a tax will benefit a business,” Margett said. “It’s the Bill Clinton approach to things.”

Councilman George Fasching countered that, given the city’s projected $2.1-million budget shortfall, he preferred to raise the hotel bed tax rather than water rates or utility taxes.

Fasching said that in his business experience, competition with surrounding cities’ hotels was not based on the bed tax rate but on a competitive room rate.

Margett replied that Fasching knew little about competition since the only competitor to Fasching’s Car Wash is still in the planning stage.

City hotel managers told the City Council that vacancy rates were up and would rise more if they lose their advantage over Pasadena, which has a 10.94% bed tax.

Hoteliers said that being just a couple of dollars cheaper than Pasadena hotels can make the difference in accounts of businesses that book 200 to 300 rooms a time.

City officials say the tax increase will raise $140,000.