Facing yet another major budget shortfall, San Jose leaders have greenlit a proposal to hike taxes on hotel stays as a means of boosting revenue for city services.
The City Council voted unanimously Tuesday in favor of placing a measure to increase the city’s hotel tax, also known as a transient occupancy tax, on the June 2 primary election ballot. The proposal would raise the tax, levied on hotel guests, from 10% to 12% — a level that still falls below most other major cities. City officials estimate the hike would raise an additional $10 million in tax revenue each year.
Officials said the proposed tax increase stems from a broader effort to find new sources of revenue and stabilize the city’s budget, which has suffered regular deficits in recent years. However, the proposal also faced pushback from business leaders, who warned the tax could make San Jose’s hospitality sector less competitive, as well as from advocates for local arts and culture…