Letter: City should capture more revenue from visitors

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Recently, the Orange County Register Editorial Board issued a strong critique of Laguna Beach residents and elected officials. These were its targets in a knee-jerk piece about “tax-and-spend” politicians. The board should have done its homework in order to avoid the flawed thinking in the editorial.

First, it implied that the rich folks of Laguna are unwelcoming and ungenerous to visitors. The fact is that every year, Laguna Beach government and residents subsidize visitors more than $20,000,000! This reality bears repeating: the costs to Laguna’s city government (and its residents, who pay the lion’s share of revenue in the city budget) resulting from all the visitors are more than $20 million higher than all the revenue the visitors generate for the city government. And this analysis, which has been fully documented, only measures the financial costs of visitors (e.g., public safety, maintenance, etc.) and none of the other negative impacts on residents of hosting more than 6 million visitors each year.

The editorial also criticizes Laguna’s “tax and spend” elected officials for engaging citizens in a recent survey that asked them whether there are any increases in services or public goods they would prefer and whether there are any sources of revenue they would support to fund those increases. In fact, this is an admirable approach to citizen participation because the voice of the community might guide and constrain the local government to be responsive to what the largest proportion of citizens prefer. No city can provide everything on a citizen wish list, so choices must be made and knowing what citizens prioritize can be helpful.

The Editorial Board should know that every California city must balance its budget every year. Ideally, Laguna Beach government should find strategies to capture more revenue from visitors to reduce this massive subsidy to the visitors. Some ideas include increasing our low business license fee on visitor-serving bars and restaurants, raising the hotel tax (TOT), or extending pay parking for non-residents (only) into more residential neighborhoods near the beaches. Various California propositions make it extremely difficult to raise these, or any local taxes or fees, without a citizen vote.

Laguna resident owners or renters, you are subsidizing visitors $20 million every year! Insist that our local elected officials move decisively to capture more revenue to the city from visitors.

James Danziger, professor emeritus of political science and Laguna Beach resident

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2 COMMENTS

  1. James, for years many residents and even newbies such as myself have told city council members and officials that they were playing with fire funding all these new shiny projects while building pension costs were looming in the shadows.

    Well, someone has just turned on the spotlights and the shadows are no longer crouching. They are stomping through our city and destroying everything in their path. I just hope this city doesn’t follow suit and jump on the pension obligation bond bandwagon.

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