Hotel tax rate, pot levy may be on ballot

MILPITAS >> Milpitas residents likely will be asked to consider approving November ballot measures that would raise the city’s hotel tax rate and levy a tax on marijuana sales.

The Milpitas City Council last week directed staff to prepare both ballot measures as a way to raise more money.

The measures’ wording will need to be approved by at least four council members on Aug. 7 to get on the ballot.

According to a survey by Fairbank, Maslin, Maullin, Metz and Associates, 66 percent of 570 residents said they would definitely or probably support an increase in the hotel room tax.

The survey was conducted via email, text message or phone call to help gauge support for the two measures among likely voters.

One measure would increase the hotel room tax from 10 percent to anywhere between 12 and 14 percent, which could add $22 million to $25 million to the city’s coffers over the next five years.

Vice Mayor Marsha Grilli and Councilman Bob Nuñez said they favored a 12 percent increase, while Mayor Rich Tran said he would prefer a bump to 14 percent to take advantage of the money tech companies spend on booking hotels.

“We need every cent,” Tran said. “We really have to understand how much money is out there in the technology industry.”

The other measure would impose a sales tax on future pot businesses, even though the city currently bans them. If voters say yes, the council would then consider allowing marijuana businesses and drafting rules to govern them.

About 56 percent of people surveyed said they would definitely or probably vote for a “tax of up to 10 percent on the gross receipts of regulated cannabis businesses, should the city permit regulated cannabis businesses to operate in Milpitas,” according to the poll.

Renee Lorentzen, the Milpitas’ recreation services manager, said separate surveys by city staff of roughly

600 people in person and online found that 75 percent would support a local cannabis tax.

Councilman Garry Barbadillo

opposed placing the cannabis sales tax measure on the ballot and Tran abstained. Grilli, Nuñez and Councilman Anthony Phan voted to do so.

The council also voted by the same breakdown to hire Hinderliter, de Llamas and Associates, of Southern

California, to help the city draft ballot language for the cannabis sales tax measure and help draft regulations if needed. That contract is worth up to $75,210, according to a city report.