Council reviews transient-occupancy tax uses and asks staff for strategic plan

The Sacramento City Council received an informational briefing and extensive discussion Tuesday on the city’s transient-occupancy tax (TOT), its current uses after Measure N (2022), revenue trends since the pandemic, and the constraints those factors place on future bonding and projects funded by TOT. No final policy change was adopted; instead councilmembers offered multiple directions for staff to return with a prioritized plan.

Megan Van Voorhis, director of Convention and Cultural Services, summarized the code and history: the uniform TOT is codified in Sacramento City Code §3.28, is a voter-approved tax on short-term rent for stays under 30 days, and currently totals 12 percent. Van Voorhis said the tax is split into a 2 percent general-tax component (general fund) and a 10 percent special-use community center fund, noting that the special-use component remains restricted to visitor-serving and tourism-supporting activities even after Measure N’s 2022 changes. “The uniform transient occupancy tax is section 3.28 of the city code,” Van Voorhis said.

Measure N broadened allowable expenditures for the community center fund to include certain economic-development projects, visitor-serving facilities that promote tourism and economic development, and theater and arts venues that the city possesses or controls. Van Voorhis said staff interpret some…