While LA Uses 98% of Hotel Transient Occupancy Tax (TOT) For General Fund, LB Uses 50% of TOT for General Fund...and Gives Over 25% of TOT to LB Convention & Visitors Bureau

LA's CVB Gets Only 2% of LA's TOT

(October 6) In contrast to Los Angeles, which uses 98% of its transient occupancy tax ("TOT" or hotel room tax) for the city's general fund, LB allocates 50% of its TOT to the general fund while giving over 25% of LB's TOT to the LB Area Convention and Visitors Bureau.

The remainder (somewhat less than 25% of LB's TOT) is allocated to other advertising and promotion items (specified below) and (under a special provision noted below) to the Redevelopment Agency.

LB's Municipal Code, enacted by Council action some years ago, mandates that half of LB's 12% TOT go to the general fund, which pays for police, fire, libraries, sidewalk repair and other general City Hall spending. The other half of LB's TOT is (with one exception) currently allocated basically to City Hall's "special advertising and promotions fund" (itemized below).

Under the LB Municipal Code, 6% (half) of LB's 12% TOT "shall be deposited in the city's general purpose fund." The Municipal Code also states (in arguably less than mandatory language) that other half of LB's TOT is imposed for "revenue purposes and is needed for the special advertising and promotion fund of the city."

A special rule applies for TOT at certain hotels in the Downtown Redevelopment Project Area, where (in addition to the 6% TOT collected for the general fund), guests pay 6% that accrues to the Redevelopment Agency, not the advertising and promotions fund; these guests are exempt from the 6% collected elsewhere for advertising and promotion projects.

City staff has advised LBReport.com that for FY 99-00 (just ended) LB's total TOT is estimated to close at roughly $12.6 million. For FY 00-01, LB's TOT is expected to be nearly $13.3.

In September, 2000, the LB City Council budgeted $3,729,000 -- roughly 28% of LB's total expected TOT -- for the LB CVB in FY 00-01 ($3,579,000 for CVB's contract; other details below.) A year before, the Council budgeted $3,479,000 for LB CVB ($3,329,000 for CVB's contract.) LB's CVB receives roughly 75% of its revenue from LB's TOT.

LA's TOT for FY 99-00 was roughly $98,730,000 and in FY FY 00-01 is budgeted at $103,599,000. LA's CVB received roughly 59% of its revenue from LA's TOT in FY 99-00.

LB's TOT allocation depends on the current Municipal Code. The Municipal Code is enacted by, and can be amended by, voted action of the City Council.

LB's Special Advertising and Promotions Fund budget, also approved by the Council, is itemized as follows for the (current) FY 00-01 budget:

Special Advertising and Promotions Fund

** Includes the following City-sponsored events: Daisy Avenue Parade; Martin Luther King, Jr. Parade; and Veterans Day Parade, in addition to other City Promotion and Special Events activities.