Hotel Fairness Initiative qualifies for fall ballot

Aaron Peskin and David Chiu were among those supporting the Hotel Fairness Initiative at a rally last week.
Luke Thomas/Fog City Journal

By Brittany Baguio

The Department of Elections has announced that the Hotel Fairness Initiative was approved for the November ballot. Labor and community groups last week turned in 10,544 signatures, a little more than the required 7,168 signatures needed to put an initiative on the ballot. The Department of Elections did a sample of 500 signatures to check the validity and reported that 478 of the 500 signatures sampled were valid, resulting in a 95.6 percent accuracy rate.

The Hotel Fairness Initiative would increase revenue by imposing a 2 percent hotel tax on San Francisco hotel rooms temporarily for 4 years, with an average surcharge of $3 per hotel room per night, and close loopholes that let some visitors avoid paying the hotel tax. The hotel tax is currently 14 percent. According to the Controller’s Office, if the Hotel Fairness Initiative passes, it is expected to raise $25 million a year in revenue.

The hotel tax is one of five measures proposed to help close the budget deficit, which we discuss in more detail in this week's paper. Mayor Gavin Newsom has also placed a measure of the ballot to also close the loopholes that lets airline employees and those who book hotels online avoid paying hotel taxes, as the Hotel Fairness Initiative would also do, but it includes a provision that would invalidate the hotel tax if his measure gets more votes.

Supporters of the Hotel Fairness Initiative claim that online booking companies and airline companies have been using corporate loopholes that have cost the city about $6 million per year. In total, online booking companies have escaped paying $70 million in hotel taxes through its loophole of taking the hotel tax out of a portion of the money the hotel receives, rather than the total amount the customer pays.

For example, Internet booking companies would charge customers $200 for a room and then pay the hotel $170. Internet booking companies argue that the hotel tax comes from a portion of $170, instead of $200. Similarly, airlines have avoided paying hotel taxes by renting blocks of rooms for its flight crews and claiming that airline companies are protected by the Permanent Resident Exclusion law. This law was originally intended to help the homeless and states that individuals who occupy a room for at least 30 days are tax exempted. However, airlines have been taking advantage of this law by moving different flight crews in and out of their hotel rooms rather than an individual person occupying the room for 30 consecutive days that is implied by the law.

Opponents of the Hotel Fairness Initiative, such as the San Francisco Chamber of Commerce and the Hotel Council, contend that the hotel tax would hurt tourism to San Francisco as well as cause job cuts. In a press release, Steve Falk, President & CEO of the San Francisco Chamber of Commerce said, “This misguided effort will discourage travel to San Francisco, hurt our city’s largest industry, and eliminate many of the union jobs the Labor Council seeks to protect. Raising city revenue at the expense of hotels and hospitality workers is not the answer to the city’s fiscal problems.”

A Hotel Council press release states that “the Hotel Fairness Initiative will lead to 7.3 jobs lost for every million dollars in revenue gained.” If this is true, about 182 jobs could be lost as a result of this initiative, offset by the city being able to save many public sector jobs and services with the revenue. The hotel industry already fluctuates in the number of positions available as a result of the market. According to California Labor Market Info’s latest data, the average amount of hotel jobs lost per month in 2009 was 143 jobs.

Although the Hotel Council and the Chamber of Commerce claim that the initiative would eliminate jobs, one of the biggest supporters of the hotel tax is UNITE HERE LOCAL 2, a union of hotel workers. UNITE HERE representative Ian Lewis emphasized that opponents of the issue are conveniently ignoring the lack of fairness in current hotel booking practices. “Hotel workers live in San Francisco,” Lewis told the Guardian, “We’re taxpayers like everyone else. We are in a severe budget crisis and everyone needs to carry their fair share.”

Community groups, retirees, and hospital workers all volunteered their time to collect signatures supporting the Hotel Fairness Initiative. Community groups such as UNITE HERE collected 1700 signatures, Keep the Arboretum Free collected 1000, and a collection of nonprofit groups collected more than 4000. With the efforts of these community groups, the coalition was able to collect an estimated 15,000 signatures.

Family health advocate for the Tenderloin Housing Clinic, Bobbi Lopez, said she found that those who signed the petition saw the hotel tax as a necessary step in closing the budget deficit, “They understood that the necessity of fighting the cuts, particularly the cuts to MUNI, to parks, and to hospitals,” Lopez told us, “I think that they were getting the idea that in desperate budget times, we need a temporary solution and long term solution and that’s exactly what the Hotel Fairness Initiative is.”

Community groups remain optimistic that this grass roots effort will pass. Brenda Barrows, a health care provider at San Francisco General Hospital, told the Guardian, “My hope is that in November it passes and the city’s financial situation gets better so that people who live in the city don’t have to suffer and also people who work for the city don’t have to suffer.”

Lopez told us she thinks that the initiative will pass if there is an ongoing effort on the issue. “We want to remind folks that this is just the beginning and now we have to embark on a long term campaign,” Lopez told us, “so it's really about sustaining the energy that we had on June 1 when we kicked off and reminding folks that its going to necessitate all the same volunteers to work together and make it reality.”



plan involve these ridiculous buzz words?

I will be voting against it just because of the insulting name. These idiotic name 's seem to have sprouted from the lefts thousands of Lee Atwaters.

What in the world does this tax increase have to do with "fairness?"

This tax increase will be with us long after the four years are up.

Posted by matlock on Jul. 14, 2010 @ 1:08 pm

one little problem with some of the no profits who actively campaigned for this ballot measure...It's illegal under contract with the city of SF

Tenderloin Housing Clinic which receives approximately $100 million in grant funding from the City and County of San Francisco, much of which is given to the City by Federal agencies such as HUD. Each of the contracts for the grants specifically states that violations of the contract include: Failure to Comply with Grant Agreement Provisions Regarding Political Campaigns and Ballot Measures: which is, "no funds appropriated by the City for this Agreement may be expended for organizing, creating, funding, participating in, supporting, or attempting to influence any political campaign for a candidate or for a ballot measure." The contracts with the City allow the City to investigate non-compliance and take appropriate action including but not limited to suspension of any and all grants and return of funding. As you will clearly note, this article, like many others in the past, flagrantly violates the aforementioned clause of their legally binding contracts with the City.

Posted by Guest on Jul. 15, 2010 @ 8:25 am

So what you're saying is, anyone who receives a grant from the government, no matter where else they get their money, has to just shut up and not lobby the government?

Gee. PG&E gets a grant from San Francisco with that clause in it. (They are the recipients of a grant from the board of supervisors to promote energy conservation — an idiocy on the level of Orwellian, but I digress.) I guess that means that they aren't allowed to 'organize, create, fund, participate in, support, or attempt to influence any political campaign...' and so forth?

If the Tenderloin Housing Clinic receives $100 million from the City and County, and $1000 in private charitable donations, then they are allowed to spend any amount up to $1000 (but no more) lobbying the government, in exactly the same way that if PG&E gets $20 million from the city and $20 billion from price-gouging their customers, they are legally allowed to spend any amount up to $20 billion (but no more) lobbying to maintain their monopoly and destroy the nascent green power movement in California.

Any other reading of the rules is simply sophistry and an attempt to shut down political speech that you disagree with.


Posted by Fred Fnord on Sep. 17, 2010 @ 11:59 am

I agree with comment about the absurd name of this proposal. Increasing the tax or fee to visitors prohibits hotels from raising their rates (which have been declining for years). Local 2 has obviously lost touch with what's best for their members - supporting a hotel tax increase WILL be at the cost of hotel jobs.

Hotel revenue represents 23% of the tourist dollar - restaurants, entertainment, transportation, retail fill in the remaining 77% - how is it fair to tax hotels only to steal from the tourists who are now bargain hunting for the best bargain available including the tax hit.

Killing the golden goose (gouging hotels with excessive taxation) has become an unfair practice all over California - an unfair practice that this measure promotes.

Posted by Guest on Jul. 16, 2010 @ 11:05 am

when choosing a convention location groups now must factor a 16% room tax for San Francisco. This at a time when coporate travel is at an historic low. This now makes San Francisco must less competive when groups select a location city. It's a very comptitive business .Smart cites try to lower their rates to attract more convnetions and thus more revenue . San Francisio..not so smart. and what does the Tenderlion cooperative or what ever it's called know about the tourist business

Posted by Guest bornin Kenya on Jul. 17, 2010 @ 11:15 am

When convention/group planners chose a city location from the many choices they have their first goal is ATTENDANCE. If attendence is low , the event is not a success. Attendence is hinged on two important factors , cost and ease of getting there. Having been in this business for 26 years I can tell you actions like this make your city less competative, in the end your revenue increasing measure actually decreases revenue collected as your city is passed by for more affordable locations. San Francisco is a wonderful city but there are many wonderful locations that are actually going after the tourist business, not trying to drive it way. Tourism is your cleanest industry, why try to harm it. You may not like the 3rd party websites ,expedia , travelocity etc. but they are the biggest game in town. you need them much more than they need you. If they unplugged S.F. in protest of a tax despute, who loses?
In the end it's service workers who suffer when politics drives business away..ask the unemployed and laid off in Las Vegas.

Posted by Guest bornin Kenya on Jul. 17, 2010 @ 11:32 am

Tourists come to SF to experience the beauty and culture that is created by the people who live here. The hotel corporations and visitors should pay their fair share that will go to services and programs that serve the working class PEOPLE of San Francisco. This initiative is a good example of working class/ poor people standing up to corporate interests, that as usual put profits over people. An additional $3.00 isn't too much of an increase. If hotel corporations are worried about visitors being discouraged because of price increases, maybe that should just lower their profit margin. YOU'RE ALREADY RICH!

Posted by Guest on Jul. 21, 2010 @ 2:06 pm

Tourists come to SF to experience the beauty and culture that is created by the people who live here. The hotel corporations and visitors should pay their fair share that will go to services and programs that serve the working class PEOPLE of San Francisco. This initiative is a good example of working class/ poor people standing up to corporate interests, that as usual put profits over people. An additional $3.00 isn't too much of an increase. If hotel corporations are worried about visitors being discouraged because of price increases, maybe that should just lower their profit margin. YOU'RE ALREADY RICH!

Posted by Guest on Jul. 21, 2010 @ 2:02 pm

this is a job killer, Peskin and his puppet Chui will damage tourism in San Francisco for years to come if this passes. We will end up with the highest hotel tax in the country at 17.5%. Visitors might visit San Francisco but a lot will stay outside the City to avoid getting gouged. There are already complaints about how high the TOT is at 15.5%. This Supervisors are either clueless are just pandor to thier vocal minority.

Posted by Guest on Jul. 24, 2010 @ 11:20 am

Let's see the study. Let's see any kind of evidence that this is the straw that will break the camel's back, that after another 2% hike people will just get disgusted and stop coming in enough numbers that it won't just be completely lost in all the other statistical noise. Nobody has any. All we have is hotel owners, who are making enormous profits in the middle of the worst economy seen in almost a hundred years, screaming. And people like you, who have bought all of the Teabagger 'overtaxed' lines hook, line, and sinker.

I swear, it's Pavlovian. People hear the word 'taxes' and they shriek 'NOOOOO!'

Do you drool every time your doorbell rings, too?


Posted by Fred Fnord on Sep. 17, 2010 @ 12:04 pm

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