Palmdale Vote Will Decide on Bed Tax Hike

Residents in Palmdale will vote May 19 on increasing the tax paid by visitors staying at hotels within the city. Raising the transient occupancy tax to 10 percent from 7 percent would put Palmdale on par with nearby Santa Clarita but more than neighboring Lancaster, which has a hotel tax of 7 percent. If approved by voters, the new rate would go into effect June 1 and the city would bring in an additional $1 million to its general fund, city officials said. On a $100 hotel room a guest would pay $3 more. Although hotel rooms in Palmdale will now cost more than in Lancaster, there is no concern that guests will gravitate to the other city for the lower cost. ? think Palmdale has the amenities that would attract people,?said city spokesman John Mlynar. ?he cost is not going to be so dramatic that it will scare people away.? The recession has been particularly hard hitting in the Antelope Valley, with a high number of foreclosures and job losses in the retail and service industry sectors. As consumers spend less that means less sales tax revenue for the city. In the fourth quarter of 2008, the city received nearly $4 million in sales tax receipts, an 11.5 percent or $520,000 drop from the fourth quarter of 2007. The city is looking at a budget deficit of $3 million to $4 million for the fiscal year starting July 1 and if the hotel tax passes it would reduce that amount, Mlynar said. Had it not been for the poor economy the city would not have taken the step of increasing the hotel tax. But with its general fund ?which pays for police protection and other city services ?taking a big hit other revenue sources needed to be found. Increasing the hotel tax is often a popular way for a city to go as it is out-of-towners who pay. Many of the major chains have hotels in Palmdale, including Holiday Inn, Days Inn, Best Western, Super 8, Staybridge Suites and Residence Inn by Marriott. A Hilton Garden Inn opened last year, and the seven-story Embassy Suites is under construction and expected to open late this year or early 2010. Filling rooms has not been difficult even in a poor economy, with occupancy rates as high as 90 percent at times. One week in June, for instance, is booked solid in both Palmdale and Lancaster hotels for a soccer tournament at the Lancaster National Soccer Center. Palmdale hosts softball tournaments that bring in visitors and a jazz and wine festival in the fall. Weekday guests tend to do work at the aerospace companies at Plant 42 or at the military installations in the northern Antelope Valley. The city has provided information in a brochure and its website on the tax measure for those going to the polls. Typically turnout is low in elections lacking national or state races although the May 19 ballot does include a number of state propositions, a measure that will repeal term limits for the mayor and city council, and three candidates vying to fill a vacant council seat. The hotel measure has received the backing of the Antelope Valley Press and two law enforcement organizations.