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Sacramento council directs staff to craft priorities plan and reserve policy for hotel tax dollars
Summary
After a staff presentation and extensive public comment from hoteliers, labor and cultural and sports groups, the Sacramento City Council voted to direct staff to develop a two‑, five‑ and ten‑year priorities plan and a cash reserve policy for the Transient Occupancy Tax (T.O.T.).
The Sacramento City Council on Tuesday directed city staff to prepare a formal priorities plan and reserve policy for the city’s Transient Occupancy Tax, the hotel tax that supports conventions, cultural venues and tourism programs.
Meghan, the city’s Director of Cultural Services, told the council the current T.O.T. rate is 12 percent and that Measure N, approved by voters in 2022, broadened eligible uses beyond the convention center to include theaters, arts, sports facilities and other visitor‑serving projects. “The current rate is 12 percent,” Meghan said during the presentation, outlining how revenue has recovered after the pandemic and warning that a significant share of revenues is already committed to debt service and facility operations.
The council heard from business and community stakeholders for more than an hour. Mike, president and CEO of Visit Sacramento, said Measure N was “a turning point” and urged a strategic, data‑driven approach to spending that maximizes the city’s ability to attract conventions and other events. Hotel representatives emphasized that targeted investments can grow overnight stays and local jobs; the Sacramento Hotel Association said earlier investments, including a $50 million private contribution for a convention ballroom, produced measurable returns.
At the same time, youth‑sports advocates and cultural leaders urged the council to consider investments that expand field capacity and cultural destinations. Alberta Regalto of Sacramento Unite Soccer asked the council to evaluate a large multi‑field complex at Granite Regional Park, saying such facilities can generate sustained hotel nights for tournaments. Labor union UNITE HERE Local 49 pressed for transparent public processes for any subsidies to private projects and for community input on each proposed project.
Vice Mayor Talamantes and Council Member Vang, who both helped shape Measure N’s expansion, said the council should adopt short‑, medium‑ and long‑term guiding tracks and require performance reporting and equity considerations across neighborhoods. Council members also discussed setting bond capacity thresholds and safeguards so the city does not overextend on long‑term debt.
A motion to direct staff to produce the priorities plan and a cash reserve policy — and to return to the council with recommendations informed by industry, stakeholders and the city treasurer — was offered, seconded and passed by the council without recorded opposition. The motion instructs staff to return with policies that would include reserve targets and an annual review of ranked projects and performance measures.
Next steps: staff will develop the draft priorities plan and reserve policy, consult with industry and community advisors, and present recommended policies and reporting intervals to the council for review. The council indicated it wants a framework that balances downtown convention and visitor demand with equitable investments across other neighborhoods.
Notes: The motion passed by voice vote with the chair announcing “aye” and hearing no recorded noes or abstentions. The council did not set a specific return date; staff said they will bring back an initial pair of policies (a reserve policy and a priorities plan) and then follow with further recommendations and annual updates.
