Gilroy council directs staff to pursue a general‑purpose TOT ballot measure with a 13% not‑to‑exceed ceiling

The Gilroy City Council directed staff to pursue a general-purpose transient-occupancy tax (TOT) measure for the November ballot and to structure the measure as a "not-to-exceed" rate with a 13% ceiling.

Staff reminded the council that Gilroy's TOT has remained at 9% since 1983 and that nearby jurisdictions have higher effective guest fees (including local TBID assessments). Finance staff summarized research showing 82% of lodging-related measures on the statewide November 2024 ballots were general-purpose taxes with an average passage rate above 68%.

Councilmembers and stakeholders discussed rate options and outreach. Visit Gilroy and the Chamber of Commerce provided informal input: the Chamber preferred a modest 2% increase aligned with neighbors and recommended earmarking funds for a clear purpose such as public safety, while Visit Gilroy's board was split.

After deliberation, councilmembers voting in favor favored a not-to-exceed ceiling of 13% (which would leave the council able to set an initial post‑pass rate below that ceiling by future resolution). The council also gave staff direction not to pursue a formal public survey at this stage and asked for draft ballot text that follows the clearer, voter-friendly style used by other cities (for example, Menlo Park's wording that specifies the uses and assures funds are not taken by the state).

Staff noted that if placed on the ballot the question must be no more than 75 words, identify who pays the tax (visitors/hotel guests), indicate a rate or ceiling and the permissible uses. If adopted by voters (50%+1 for a general tax), the council will have the flexibility to set the exact rate up to the ceiling and determine allocations by resolution.