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While neighboring Pleasanton is taking a similar measure to voters this November, the Dublin City Council balked last week at putting a hotel tax increase on its citywide ballot after facing pushback from local hoteliers.
The measure proposed a 4% bump to the transient occupancy tax in Dublin, implemented by 2% step increases in July 2027 and 2028 for a total of 12%. Military families would have been exempt from the rate increase – a special consideration for the city with Parks Reserve Forces Training Area located in Dublin.
Revenue was slated to go toward the city’s general fund for essential services with a structural deficit predicted in 2030-31, according to city officials.Â
The potential measure failed following a tense discussion at its July 21 regular meeting, falling short of the four affirmative votes needed from the dais. Landing at a 3-1 tally in favor, Mayor Sherry Hu opposed the item and Councilmember John Morada abstained.Â
“I believe that some of the arguments that I’m hearing tonight from my colleagues are disingenuous and I believe that a very small handful of politically connected people to some of your campaigns are having an outsized influence,” Vice Mayor Jean Josey said.
Kicking off the discussion, Councilmember Michael McCorriston expressed support for the tax bump amid the structural deficit projected for the future.
“This is a tiny increase and we’re doing it thoughtfully. We’re doing it in tiers,” McCorriston said.
The current 8% tax rate was established in 1984, according to city staff. The 4% tax increase for stays of 30 days or less at any of the six hotels in the city, or locations such as inns, tourist homes and motels, would increase general fund revenue by an estimated $700,000 annually at full implementation.
Councilmember Kashef Qaadri also endorsed placing the measure on the ballot in part to level the city’s hotel tax with rates in Alameda County.
Tri-Valley jurisdictions range from 6.50%-8%, but the median rate in the county is 12%.
“We’re in a healthy fiscal position,” Dublin City Manager Colleen Tribby said during the meeting. “This is really about providing essential services now and for the long-term.”
Local hotel operators, however, generally do not support the increased tax, city staff said.
Among those to oppose the tax rate increase were two of the three speakers during public comment.
“The Hotel Industry is still reeling from the effects of COVID,” Dublin Chamber of Commerce CEO Inge Houston said in a statement following the council decision. “Rates are down, occupancy is down and expenses for insurance, utilities and staffing have skyrocketed. This is not the time to add more of a burden to our hotels.”
On the other side of the argument, Dublin business owner Mike Grant expressed support for increasing the hotel tax as a way to pay for city services.
“These motels are getting the benefit of the taxpayers in town,” he said. “We’re the one picking the bill up for all the ambulances, the fire and everything like that.”
In line with hotel operators, Hu expressed opposition to the potential rate increase.
“A few dollars do matter,” Hu said. “We want our hotel businesses to thrive.”
According to research presented by city staff, moderate increases to hotel tax do not cause a measurable change in hotel occupancy, revenue, average daily room rate or hotel employment.
On another note, Morada questioned whether a structural deficit was truly impending.
“Some of the arguments that are being made here are conjecture,” Morada said. “We’re forecasting a deficit, but we’ve been forecasting the deficit for two city managers, even prior to the one that we have today, so please tell me at which point the reality of this deficit is actually going to surface.”
Reflecting on the oppositional stances, Josey scolded Hu and Morada.
“I am appalled that two of you would have asked staff to bring us this measure and to do this much work, and ask them to do additional research … and to have not considered the research that they brought to us,” Josey said.
Council had given related direction to staff at multiple meetings prior to July 21, according to the staff presentation.
“For us not to even ask our residents what they want us to do is tantamount to malpractice for the five of us,” she added.
Morada maintained his position.
“If somebody could just simply tell me where that gap is today and the probability of that happening and how that could impact us at this moment … then prove it. Do it right now,” Morada added.Â
Staff provide an annual budget update and projections, Josey replied.
“We think it’s a conservative, but reasonable model,” Tribby added regarding the ten-year forecast.
As for its budgeting measure, the city has already implemented cost-cutting actions such as decreasing contributions to pensions, cutting off the retiree health plan and pegged salaries at “certain rate”, Tribby said.
Meanwhile, the city expects a dip in revenue from development as the city reaches build-out, she added.
“I feel terrible for staff that we have put them through the amount of research we asked for, that to me, seems like that request was for show,” Josey said.
During the final vote, the motion received 3-1 support with one abstention. However, the council did not place the proposed measure on the ballot because doing so required an affirmative vote of two-thirds.
Facing more immediate budget concerns, the Pleasanton City Council unanimously approved a resolution at its July 7 meeting to place a similar measure on the November 2026 ballot in its city.
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