NEWPORT BEACH : Charter Boat Tax Wins Initial OK

The city is taking to the waves in its search for increased revenue, with final City Council approval pending on a charter boat tax.

The tax measure won preliminary approval Monday on a 4-3 vote. It provides that charters operating from Newport Harbor collect an extra 50 cents per passenger on fares from $26 to $50, and an extra $1 on fares of $51 or more. Sportfishing and whale-watching charters would be exempted.

Operators from outside the harbor, who often come in for special events like the Christmas Boat Parade, would have to pay surcharges of $50 for cruises of up to 50 passengers and $100 for those of more than 50. The money would go into the city’s general fund.

The tax would apply only to passengers whose tickets cost at least $26.

Charter boat owners don’t want the tax, but after months of study and negotiation with city officials, most have accepted the revised ordinance.

“No one is on board saying, ‘Gee, give me another tax.’ But most have agreed that this is the least offensive alternative,” said Richard Luehrs, president of the Newport Harbor Area Chamber of Commerce.

City Manager Kevin J. Murphy said Newport Beach is the only harbor city south of San Francisco that does not levy such a tax, which is expected to add $150,000 a year to city coffers.

“No one wants to pay this tax,” he conceded at the council meeting.

City officials believe one-day visitors to the city often don’t spend enough money here to support the wear and tear they generate on city facilities.

Murphy said the 364,000 passengers on harbor charters each year should shoulder some of the burden for street and harbor maintenance and other city services.

The tax would force recreational visitors to shoulder some of a tax burden that has traditionally rested on residents.

Council members Phil Sansone, John W. Hedges and Evelyn R. Hart voted against the tax.

City revenue manager Glen Everroad pointed out in staff reports that the city’s hotels generate $5.6 million and restaurants $2.4 million in annual tax revenue, while the 88 marine charter businesses kicked in only $30,000 in combined sales, property and business taxes last year.

Bob Black, owner-operator of the Catalina Flyer, opposes the timing of the tax because of the tourism business climate.

“It’s not just me; it’s my customers. With the way the economy has been around here for the last couple of years, I think putting a tax on people who are trying to enjoy themselves is not a good idea,” Black said. “They need to let us get back on our feet.”

“One of my competitors from Long Beach just dropped their prices dramatically. Now I have to worry about my customers going up there,” Black said. “People are shopping for price. If I have to raise my prices when my competition is lowering their prices, that is a factor.”

The tax would take effect 30 days after final approval, which is expected Aug. 22.