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Eureka council votes to put 2% hotel tax increase on November ballot after split proposal fails
Summary
The Eureka City Council voted 3‑2 to place a proposed 2% transient‑occupancy tax increase on the ballot, despite hotel industry opposition and a failed effort to split the raise into two 1% increments over two years; staff estimates the measure would raise about $700,000 annually.
The Eureka City Council voted on July 7 to place a proposed 2 percentage‑point increase in the city’s transient occupancy tax (TOT) before voters, raising the city portion from 10% to 12% if approved. City Manager Miles Slattery and finance staff told the council the increase — payable only by guests of hotels and short‑term rentals — is projected to generate approximately $700,000 a year and would be placed on the ballot with independent audits and oversight by the city’s finance advisory committee.
Slattery noted a data correction after contacting county staff: earlier packet figures misstated the county’s post‑increase revenues due to different accrual accounting; when adjusted for consistent accruals the county’s revenue increase was smaller than originally reported. Slattery also provided a decade of city TOT figures to illustrate trends.
Several hotel owners and the Eureka Lodging Alliance urged council to reject the measure, arguing higher lodging taxes make Eureka less competitive with neighboring cities and that marketing and event development would better increase overnight stays. Chris Ambrosini, managing partner at the Best Western Plus Humboldt Bay Inn, said raising the tax “may see an overall decrease in TOT revenue” if price‑sensitive visitors shift to nearby jurisdictions.
Councilmember Ben Fernandez proposed amending the measure to split the increase into two 1% increments phased in over two years to give hoteliers time to adapt and to allow further review; that substitute motion failed to secure a second. The substantive ballot measure advanced on a 3‑2 vote, with Fernandez and Councilmember Contreras Deloach recorded as opposing.
If voters approve the measure, staff said the city would adopt the implementing ordinance after the election and earmark funds for services affected by tourism — for example, roadway maintenance, public safety and parks — while leaving allocation decisions to future councils.
