Imperial Beach could have highest hotel tax in county but not without voter approval in November

Imperial Beach could have the highest hotel and short-term rental tax in San Diego County by January. City voters must first decide in November whether they want to increase the lodging tax rate.

In the general election this fall, voters in the South County city will be asked if the transient occupancy tax (TOT) for hotels, motels and vacation rentals should be increased from 10 percent to 14 percent.

The “Imperial Beach Quality of Life Measure” would need a simple majority to pass. If approved, the tax would bring in an additional $400,000 annually to the city’s general fund to maintain essential city services. The city expects to generate about $1.3 million in TOT this year at the current rate, said Erika Cortez-Martinez, the city’s assistant city manager.

The city has 196 hotel rooms spread among two large hotels — the Hampton Inn and Pier South Hotel — and the smaller Sandcastle Inn. There are also 101 active short-term rentals.

Council members unanimously agreed Aug. 3 to place the measure on the ballot. They said the extra revenue source will not only help the city fortify its efforts to keep neighborhoods safe and clean but also make the coastal city more competitive.

“I think that it would be foolish of us not to bring Imperial Beach to a competitive level, a comparative level of cities adjacent to us that don’t even have a beachfront,” said Councilmember Paloma Aguirre. “It would just bring us to the modern day and age.”

Imperial Beach’s neighboring cities — Chula Vista, Coronado and National City — also have a 10 percent TOT, as do most cities in San Diego County. Lemon Grove has the lowest rate at 6 percent and Del Mar (12.5 percent) and Solana Beach (13 percent) have the highest. San Diego’s 10.5 percent tax could rise to 13.75 percent depending on the outcome of a legal effort. The rates in California range from 4 percent to 15 percent.

Several residents support the proposed tax hike because it would be paid by visitors, according to a February survey conducted by the city. Of the 300 survey respondents, more than 70 percent said they supported the tax increase because it would help offset the recent loss in tourism revenue related to the pandemic.

Some respondents said that because visitors will be funding the measure, TOT funds should be reinvested in Imperial Beach’s oceanfront communities and its main streets, such as on Seacoast Drive and Palm Avenue, which need better lighting and more parking.

Local hotels also back the measure. Robert Blatt, general manager of Hampton Inn, said in a letter to the city that he’d been assured the additional revenue would support neighborhood improvements, particularly in the vicinity of the hotel.

But one city resident said the tax increase could be counterproductive.

Dante Pamintuan, a Realtor and former president of the Imperial Beach Chamber of Commerce, said visitors who are already paying more for gasoline and food will “stop coming or choose a closer, lower-cost beach town or vacation spot.” He suggested the city lower the TOT to 8 percent and have more community input before proposing any more tax rises.

Mayor Serge Dedina, who called the approval of the measure a “historic vote in the city,” said its passage is ultimately up to the voters and that’s “as good as democracy gets.”

The proposed hotel tax comes after 70 percent of voters passed Measure I in 2020. The measure added a 1-cent sales tax increase earmarked for public safety improvements.