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Looking to give the city an injection of new revenue, Mountain View is putting a measure on the November ballot that would increase taxes on local hotels.
The City Council unanimously supported a staff recommendation Tuesday evening to move forward with a ballot initiative that would authorize the city to raise its existing 10% “transient occupancy tax” as high as 15%. If voters sign off, city staff plan to return to the council in November or December with a proposal to boost the tax rate.
The increase could add up to about $5.4 million annually to Mountain View’s coffers, Assistant City Manager Arn Andrews told the council at the June 23 meeting.
The city had previously been exploring the option of asking voters to pass a general obligation bond, but opted instead for the hotel tax measure after reviewing a third round of polling data earlier this month, according to a city staff report.
The report did not provide the polling results and the council discussion was limited Tuesday.
“I know the TOT increase was not the thing that we were contemplating when we first started this journey,” Council member Lucas Ramirez said. He thanked city staff for putting together the hotel tax proposal “in a relatively quick period of time.”
This will be the second time in two years that Mountain View residents have been asked to pass a tax measure to bolster the city’s funding. In 2024, voters approved raising the property transfer tax on commercial and residential buildings that sell for more than $6 million. The increased tax generated $5.1 million in the 2025-2026 fiscal year.
Mountain View’s hotel tax rate lags
Currently, Mountain View has one of the lowest hotel tax rates in the region, according to the staff report. The last time voters increased the city’s hotel tax was in 1991, when they raised it from 8% to 10%.
“Since that time, almost all of our neighboring jurisdictions have updated their TOT’s to rates higher than where we currently are,” Andrews said.
Because the measure would make Mountain View’s hotel tax comparable to neighboring cities, Andrews argued that it would unlikely impact the competitiveness of the city’s hotel industry.
Currently, Mountain View has 19 hotels, totalling approximately 1,780 rooms citywide, according to the staff report. Since the 2023-2024 fiscal year, annual hotel tax revenue has increased from about $8 million to over $11 million.
The tax is assessed based on per-room occupancies in local hotels and motels, according to the staff report. Government employees on official businesses and any stays longer than 30 consecutive days are exempt from the tax.
According to the city, if voters approve the hotel tax measure, the additional revenue would fund projects identified as high priorities by the community. The ballot language specifies that the money would go towards repairing city streets and sidewalks, improving police, fire and emergency response services, supporting affordable housing, adding new parks and “other general government services.”
The city is confusing. Right now, hotels can offer lower prices because of a lower tax rate. But if the price goes up…they expect nothing to happen.
Why not just get ahead of our neighbors and make it 25%?
What’s interesting is they did not release the results of the postcard survey we all go in the mail that would tell us what the priorities will be. So it’s basically a slush fund.
The voice should submit a public records act for the results of that survey.
Lack of transparency is not great when asking to raise taxes. Why the last minute switcharoo? If polling was done or even advise given by consultants, all of that should be shared with the public.
Also looks like this is indeed a slush fund…to be used as City sees fit.