American Canyon voters will be asked in November to approve a 1 percent increase in the hotel tax to help fund workforce housing.
The City Council authorized the plan — which would increase the transient occupancy tax (TOT) from 12 percent to 13 percent — at its July 3 meeting, joining other jurisdictions in the Napa Valley that have approved similar measures for the General Election ballot.
A 1 percent TOT for housing is the brainchild of Visit Napa Valley, which promotes tourism and is funded by the hospitality industry. Some hotels and resorts have struggled to find employees who can afford to work in Napa County.
American Canyon’s tax proposal will be labeled Measure H on the local ballot, according to City Manager Jason Holley. The city goes in alphabetic order when labeling measures, and the last one was Measure G in 2012, which increased the mayor’s term of office from two to four years.
Officials are hoping voters don’t confuse Measure H with the 2016 ballot measure of the same name that authorized a $269 million school bond for the Napa Valley Unified School District.
Because it calls for increasing the TOT — which is levied on those staying at local hotels — Measure H will need two-thirds of American Canyon voters to support it for its passage.
A super-majority of the City Council was necessary to authorize Measure H for the general election. It received unanimous approval, 5-0.
Councilmembers debated the 1 percent TOT plan extensively at its two previous meetings. Initially, most of the council indicated they wanted the added tax revenue to go towards transportation projects to reduce traffic congestion.
But they ultimately decided to direct the funding at housing needs, putting American Canyon in line with Napa, Yountville, St. Helena and Calistoga and their 1 percent TOT proposals for workforce housing.
The Napa County Board of Supervisors on Tuesday also approved a 1 percent TOT plan to support housing for the November election. The county measure will also appear on the American Canyon ballot for voters to decide.
If all of the TOT measures in the Napa Valley are approved, they would raise nearly $5 million annually, Holley told the City Council. American Canyon’s tax would produce about $140,000 each year.
Holley suggested at the council’s June 26 meeting that the city dedicate revenues from its 1 percent TOT increase to housing — not transportation — because most of the local hotel managers said they would only support the plan if the monies went to help ease the housing shortage.
Additionally, by aligning American Canyon’s measure with the others in the valley, “there is a substantial opportunity to partner with Napa County specifically and potentially others in using” the revenues for housing, he said.
One example of such partnering he cited was the Valley View Seniors Homes project, which the Board of Supervisors supported with more than $2 million. Holley added that County Executive Officer Minh Tran has proposed forming a “2x2 committee” composed of supervisors and councilmembers to discuss housing, traffic, land use and other issues that are important to the county and American Canyon.
Holley also argued that money spent on housing could represent a way to help reduce the flow of commuters each day into the county.
“It’s not an either/or” situation of spending this money on housing or traffic, said Holley. When expanding housing availability “proximate to where people work, you are also by default working on transportation issues because you can eliminate some of the commuter effect.”
The council agreed with Holley’s recommendation to direct the TOT funds to housing. This included Councilmember Kenneth Leary, who voted against the idea on June 26, when the council directed staff to craft a TOT resolution.
Leary said then that a 1 percent TOT bump was insufficient to address the Napa Valley housing shortage.
But on July 3 when it came time to vote on a resolution authorizing the tax increase for the ballot, Leary chose to back it.
“I addressed my concerns regarding this tax” at our last meeting, Leary said. “However, I’m not going to stand in the way of this being put on the ballot,” he said before voting “yes.”