San Diego to implement Measure C’s hotel tax hike

The city of San Diego is set to start collecting a higher hotel tax, beginning May 1. This tax increase is associated with Measure C, passed in 2020, which aims to fund an expansion of the convention center and support for homeless services. The decision comes despite ongoing legal challenges related to the measure. Measure C was approved by nearly two-thirds of voters, but its implementation has been delayed due to court disputes over whether it needed a two-thirds majority or if a simple majority was sufficient. A judge confirmed last year that the city could proceed, but an appeal is still pending on several issues. The convention center project has faced rising costs, making the implementation of this tax urgent. City officials estimate the tax will generate roughly $82 million in the first year and over $1 billion in the next 10 years, primarily to fund the convention center expansion and homelessness initiatives. Hotel guests will see varying tax rates based on their hotel's proximity to the convention center, ranging from 11.75% to 13.75%. This increase also includes a 2% surcharge for tourism marketing, raising the total cost for visitors. While city officials and supporters express confidence in the tax collection, some in the hotel industry worry about the impact on travel costs during uncertain economic times. They believe more notice was needed before implementing this change. Revenue from the tax could also help address budget shortfalls in homeless funding as it becomes available. However, the expansion of the convention center faces complications due to the city’s limited control over key waterfront properties needed for the project. Negotiations will likely need to be reopened to move forward with the center’s expansion.