Councilman Faulconer’s Call for Public Hearings on Tourism Tax Questioned

by on February 15, 2013 · 6 comments

in Civil Rights

Kevin Faulconer Fox-News-screenshot.

Councilmember Kevin Faulconer. (Screen-capture from Fox News via SDRostra.) Faulconer is no longer the City Council President.

Editor:  Ocean Beach’s councilmember, Kevin Faulconer, has just come out and made a call for public hearings on the tax on tourism, setting up a potential show-down with newly-elected Mayor Bob Filner.  But this is a fallacious move on his part as the tax may be declared illegal by a court. 

It appears to be more partisan gamesmanship – Faulconer is a Republican whereas Filner is a Democrat -, and not in the interests of the City or our District. Hey Kevin ! On behalf of OBceans – who voted for Filner by huge margins – back off and reconsider all this, dude. 

Here, below, Doug Porter over at San Diego Free Press questions Faulconer’s call in today’s column, The Starting Line:

City Councilman Kevin Falconer called for public hearings yesterday to placate the City’s hotel industry, which is growing increasingly panicky over Mayor Bob Filner’s refusal to release funding generated by a hotel room surcharge of 2 percent to finance the Tourism Authority.

“Jobs”, “Police”, “Potholes” whined Falconer, desperate for a buzzword that would play well in the evening’s TV newscasts.

From this morning’s UT-San Diego:

“Every day that goes by San Diego is losing potential tourism tax revenue that we can use to fill potholes and hire more police officers,” Faulconer said in an interview. “Shutting off those funds will hurt one of our most important industries and cost us jobs. I want to ensure that all of the council and the public know the cost of the mayor’s inaction. There’s no excuse for this inaction.”

No excuse, Kevin? Really?

How about the probability that the two per cent tax funding this program will be declared illegal?

City Attorney Jan Goldsmith’s novel interpretations of the law have already failed the citizens of San Diego twice recently (Balboa Park & the Pension Reform mess). Is it really such a good idea to expose the City’s budget to the damage that could be caused by having to refund all the taxes collected?

There are already lawsuits making their way through the courts challenging the legality of the hotel surcharge, which was imposed using a questionable loophole to avoid voter input as required by law. Again, from this morning’s paper:

Attorney Cory Briggs, who is handling one of the lawsuits on behalf of San Diegans for Open Government, has written a letter to Filner urging him not to sign the agreement.

He argues that if he were to prevail in the lawsuit and the marketing district revenues had already been spent, the city would have to repay the hoteliers out of the general fund.

“By signing the contract now and allowing (the marketing district) to begin spending money before a judge has ruled in the lawsuits is an outrageous gamble with taxpayer resources,” Briggs said.

The long tradition of vested interests in San Diego being able to run roughshod over legal niceties appears to be coming to an end thanks to Mayor Filner.

It can’t be easy. And I’ll wager that before the year is out these interests will seriously attempt to find a way to make recalling the Mayor an issue.

Me, I’m hoping for the Trifecta. I see the courts throwing this whole tax deal out.

If the hoteliers really need this money, let them collect voluntary contributions amongst themselves. This whole business of ‘dedicated’ taxes has turned into a boondoggle that benefits the few at the expense of the many.

{ 6 comments… read them below or add one }

avatar smartguy February 15, 2013 at 3:32 pm

Frank, let me be frank:

“If the hoteliers really need this money, let them collect voluntary contributions amongst themselves. This whole business of ‘dedicated’ taxes has turned into a boondoggle that benefits the few at the expense of the many.”

This is their “assessment” already separate from the TOT tax. The hotel stays collect both an assessment and a tax. The tax goes to the city, the assessment goes to the TMD. Who is taxed? Visitors staying at a hotel. Also, there’s 74 of these TMDs set up all through California. Want to shut down San Francisco, Los Angeles, and recently Santa Monica?

Might as well throw California into a deeper hole than it’s in.

My 2 cents, because half my relatives work in tourism.


avatar doug porter February 16, 2013 at 11:37 am

this not an assessment. If you don’t collect it you’re evading taxes, subject to criminal and civil penalties. If you don’t collect an assessment, you might get sued for breach of contract or kicked out of whatever group made the agreement.

California voters passed an initiative requiring voters to chime in on any tax increases. San Diego voters rejected this basic deal twice. This 2% is clearly an attempt to do an end run around the law (a law that I don’t think was wise, BTW)

I spent most of my professional career in the hospitality business, and I do know how TMD’s work. Nobody’s saying that the TMD is illegal; just the means used to finance it.

This whole deal is typical of the insider mentality that’s been pervasive in San Diego. And I don’t think Mayor Filner should give in to these attempts at blackmail vis-a-vis “let us break the law or we’ll fire these employees”.


avatar La Playa Heritage February 18, 2013 at 5:26 am

San Diego is special when the 5-year temporary (2008-2012) TMD showed other California cities how to increases taxes without a public vote.

Instead of just temporary 5-year TMD created by San Diego, prior to 2010 Propositons 26 that does not allow new taxes or EXTENTION to existing taxes, other cities’ hoteliers created long term deals for themselves.


avatar OB Dude February 15, 2013 at 6:38 pm

I suspect these actions have something to do with securing employment once his term ends on the Council. Time will tell…..let’s wait and see where Faulconer ends up.


avatar Frank Gormlie February 16, 2013 at 11:22 am

At the very end of the business day on Friday, Feb 15, Matt Awbrey of Faulconer’s office called to reassure us that his boss’ call is not “partisan”. I told him that we would welcome a rebuttal by Mr. Faulconer himself or someone from his staff if they wished.


avatar La Playa Heritage February 18, 2013 at 5:36 am

The new Santa Monica TMD is not a tax, it is an assessment. Only hotels that volunteer to join the TMD self-assess and self-govern. In San Diego all hoteliers and private condos that allow stays less than 30 days are subject to the tax.

““The programs and services provided with the district funds will be designed specifically to drive room night sales at assessed lodging businesses,” a report issued to the CVB by Civitas stated. “Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from district-funded activities, be featured in advertising campaigns, and benefit from other district-funded services. Non-assessed lodging businesses will not receive these and any other district-funded services.”


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