HANFORD - In an abrupt reversal this week, the Hanford City Council killed a proposal that would have raised the hotel tax in Hanford and used the increase to fund downtown revitalization efforts.
The proposal would have raised the 8 percent tax, which is paid by people staying overnight at Hanford motels and hotels, and devoted the increase to projects designed to enhance and improve the downtown area.
It would have required voter approval before going into effect.
Two councilmen at Tuesday's meeting – Justin Mendes and Francisco Ramirez – were in favor of the idea of raising the tax to 10 percent.
If either Vice Mayor Sue Sorensen, Mayor David Ayers or Councilman Martin Devine had sided with Mendes and Ramirez, the proposal would have gone before Hanford voters on Aug. 29 in a special mail-only election.
That didn't happen.
Ayers and Sorensen nixed the idea, saying they were in favor of a sales tax increase instead.
Devine said people who had talked to him said they were opposed to increasing the hotel tax. Devine was uncomfortable with the estimated $68,000 cost to hold the special election in August.
"I don't like it," he said.
On at least two previous occasions, at least three members of the council had expressed support for increasing the hotel tax to help downtown.
The first time was on June 7, 2016, when the council consisted of Mendes, Ramirez, Ayers, Gary Pannett and Russ Curry.
Curry and Pannett were replaced by Sorensen and Devine in December.
The second time was Feb. 7, when all four members of the council who were present – Ayers, Mendes, Ramirez and Devine – gave a thumbs-up to the idea.
The discussions on June 7, 2016, and Feb. 7 didn't involve formal votes. Council members indicated by either verbal consent or body language whether they wanted to move forward.
A breakdown of the names of individual council members and how they voted wasn't immediately available for the June 7, 2016, discussion.
Mendes said in an interview Wednesday that he was surprised at the council's reversal.
"Everybody has been saying downtown revitalization is a priority," Mendes said. "This was supposed to be the method to fund downtown incentives. To throw away that revenue stream, I was caught off guard."
Sorensen said in an interview Wednesday that she didn't think it was "financially worth the expense and the effort" to hold an election.
City Manager Darrel Pyle told the council at Tuesday's meeting that increasing the tax from 8 percent to 12 percent would generate approximately $245,000 a year for the city, assuming the occupancy rate at Hanford hotels and motels would hold steady and not drop once the increase went into effect.
Pyle said that raising the tax to 10 percent would net the city about $120,000 annually.
Sorensen defended the idea of a sales tax increase in Hanford that would go into the city's general fund and could be spent as the council saw fit.
Such a tax would require 50 percent-plus-one approval by voters.
The hotel tax hike, however, because it's considered a special tax devoted to a specific purpose, would have required 66 percent-plus-one voter approval.
Ayers and Devine couldn't be immediately reached Wednesday for comment.
Mendes called Ayers' and Sorensen's idea of a sales tax increase rather than a hotel tax increase the "ultimate irony."
Mendes said the hotel tax increase wouldn't cost Hanford residents because it would be paid by out-of-town travelers.
Frances Perkins, who will manage the Home2 Suites by Hilton once the extended stay hotel opens next to Denny's in Hanford, was glad to see the council reverse course.
At the Feb. 7 meeting, Perkins had spoken against the proposed hike.
Main Street Hanford Executive Director Shelly Talbert, on the other hand, was disappointed at the apparent demise of the hotel tax increase concept.
"I'm hoping that it might be revisited in the near future," she said. "I would have loved to see some increase to the [hotel tax] to help downtown."