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Council advances tax package: cannabis and hotel/parking proposals split, multiple parts remitted to budget committee
Summary
Council debated and took votes on a multi-part revenue package (Item 17) including transient occupancy tax (TOT) options tied to the Olympics, a proposal to tax illicit cannabis shops, parking/occupancy measures and short-term rental changes. Several subparts were approved, one major amendment failed, and multiple pieces were remitted to the Budget & Finance Committee for drafting and ballot language.
Council members spent extended floor time on Item 17, a multi-part proposal to raise or modify several local revenue sources including transient occupancy tax (TOT) increases tied to the Olympics, a narrow effort to tax illicit cannabis shops, parking/occupancy revenues and changes targeting short‑term rentals.
Committee chairs and the Chief Executive Office presented estimates and options. The CEO summarized projected shortfalls and a menu of ballot options; staff noted one scenario could generate up to approximately $70,000,000 from pursuing unpaid revenue from illicit cannabis operations, while TOT options included a temporary 4% increase during the Olympics with a later reduction or a tiered 2%–1% path. Councilmembers expressed concerns about equity, enforcement and the effect on hotels and neighborhoods.
Council actions included a bifurcation vote to separate subparts; 17B (one amendment relating to a specific revenue choice) failed on a 3–11 vote. Other subparts passed: 17A passed 13–1; the larger item 17 with amendments passed 12–2 after revisions. A cannabis-focused modification was approved 13–1. Several pieces — including parking/TOT detail and the short‑term rental impacts (recommendation #5) — were remitted to the Budget & Finance Committee for further study and for the City Attorney to prepare ballot language if Council pursues placement on the June ballot.
Why it matters: The package is a major city budget and ballot decision: revenues under consideration are intended to close structural shortfalls and fund services and infrastructure. The Council’s split votes and remittals indicate further committee work and possible ballot choices before voter approval would be sought.
What’s next: The City Attorney was instructed to draft ordinance options for Council consideration; certain elements will return to the Budget & Finance Committee for more technical analysis and enforcement planning.
