A citizens initiative that could bring the Crescent City Harbor enough revenue to pay down a $5.5 million U.S. Department of Agriculture loan will be on the Nov. 6 ballot.
Although the Del Norte County Board of Supervisors on Tuesday unanimously approved placing the initiative on the ballot, County Counsel Elizabeth Cable said her office has been uncomfortable to say whether the tax initiative would require a 2/3rds majority or a 50 percent plus 1 majority to pass. Cable also advised supervisors against approving the proposed tax itself.
“I think that if I were a proponent of the tax I would plan for the 2/3rds (majority) as best I could and I think that’s the best we can do at this point to answer that question,” Cable said.
If approved, the Save the Harbor 2018 initiative would increase the transient occupancy tax visitors staying at motels and hotels in the county pay from 8 percent to 10 percent. It also seeks to place a 2 percent transient occupancy tax on recreational vehicles renting space at parks within the county. The tax would only apply to those staying at parks in the county for less than 30 days.
Revenue generated from the tax would be used to pay off the USDA loan, which paid to rebuild the harbor following the 2006 and 2011 tsunamis, and to fund other repairs at the port.
Until recently, a special tax required a 2/3rds majority vote to pass, Cable said Tuesday. This requirement is now up in the air due to the outcome of a California Supreme Court case involving the City of Upland and a statewide initiative that may also be on the November ballot, she said.
The court case involving Upland made the 2/3rds vote requirement an open legal question, according to Cable.
If approved, the new initiative, the Tax Fairness and Accountability Act of 2018, would make every local tax measure in California subject to a 2/3rds majority vote to pass. According to Cable, if approved the initiative would apply that 2/3rds majority vote to tax measures approved in 2018, including the Save the Harbor 2018 citizens initiative.
Proponents of the Tax Fairness and Accountability Act are still collecting signatures, she said, but “most people think it’s going to be on the November ballot.”
“We’re fearful that if we take a position on the 2/3rds or not 2/3rds that it could mislead voters to then be something different,” Cable said. “There’s going to be litigation around this when taxes are either imposed or they’re not imposed and the litigation comes against the county for making that decision for the 2/3rds or the majority (vote) and so we’ve been pretty uncomfortable about doing that at this point.”
During the board’s discussion, Supervisor Gerry Hemmingsen expressed confusion as to whether a 2/3rds majority vote would be required to pass the Save the Harbor initiative since the revenue it creates is designated for the port.
Cable said the California Supreme Court case changed that.
“The language discussed widely through the legal community is there is at least some indication that threshold might not apply,” she said. “But there’s also this other tax initiative that is coming forward. At the end of the day, whichever way it goes, there’s a real possibility for litigation to ensue so we’re trying to be careful with it.”
Don McArthur, one of the organizers of the Save the Harbor 2018 initiative, said he and other proponents made the effort to gather enough signatures to place it on the ballot because they thought it would require a 50 percent plus 1 majority vote to pass. However, he said, he and other proponents plan to “aim for 2/3rds” when encouraging Del Norte residents to approve the citizens initiative.
If the Save the Harbor initiative is approved, the revenue it creates would go into a special fund that pays down the port’s debt and finances capital improvements at the harbor in perpetuity, McArthur said. He noted that the harbor’s debt service with the USDA has about 38 years remaining on it.
Harbor commissioner Brian Stone noted Save the Harbor 2018 proponents gathered 1,107 signatures, roughly 400 more than the 704 needed to place the initiative on the ballot.
“The community seems to be supporting this,” he said. “The initial surveys done have shown a 64 up to 81 percent range depending upon whether we’re talking about an issue that’s just simply 2 percent TOT on hotels versus 2 percent being added on the RVs. The lower number was for RVs.”
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