.Nonprofit Leader on Proposed Capitola Tourism Tax Hike, Funding Kids’ Programs

With Capitola’s transient occupancy tax (TOT) headed to the November ballot, additional cash could soon start flowing into city coffers, as well as toward youth programs and business groups (“TOT Off the Presses,” GT, 7/18), but not everyone sees the breakdown as perfectly fair.

After reading last week’s brief on the topic in GT, Ray Cancino, CEO of Community Bridges, called to remind us that this new youth program money will supplant a similar amount of youth funding that already comes from the general fund—not add to it.

Similarly, the marketing money supplants business-oriented general fund dollars, although that new allocation would see an estimated $8,000 more than the kids’ groups would. The combined $62,000 for the Business Improvement Area and the Capitola Soquel Chamber of Commerce would replace $30,000 of general fund money for the chamber. That’s an estimated increase of $32,000, while kids’ groups see an estimated increase of $4,000.

Cancino questions the values reflected in the decision and calls the resulting measure “a hard sell.”

Councilmember Ed Bottorff, who worked with the business community on a breakdown that everyone would like, says that TOT revenues have been growing at about 5 percent per year. And if the marketing campaign leads to an added boost in visitors, as supporters think it will, everyone will end up with more dough, including the kids’ programs. “If the measure fails, that means nobody gets anything,” he says.

Bottorff says that if the City Council simply kept funding youth programs via the general fund that stash would be liable to get cut in the next recession. This way, it’s instead protected long-term in the measure’s wording. He adds that Capitola, the county’s smallest city, is the most generous local government per capita, when it comes to supporting community programs.

If the measure passes, most of the proposed 2 percent tax increase on visitor lodging would go to the general fund, and Cancino has no illusions about what’s really driving budget constraints—pension obligations, he says.

At a recent budget hearing, Finance Director Jim Malberg called pension costs “the biggest threat to our city finances.”

“All these other things are just patches on the boat, until the cities and the county and the unions work together,” Cancino says. “When the majority of your funds are paying for people who are no longer working, and you have all these other needs, with streets and social services and first responders, something’s going to break.”

The SEIU, a union representing many government service workers (as well as some Community Bridges employees), did not provide a comment for this story by deadline.


  1. Yea, the beautiful city of CrapiToilet seems to have overstrained their budget by caving in to the SEIU and by mismanaging its pension investments. What else is new? The government, when it comes to investing in the future of anything at all, has no kung fu. The politicos think only about surviving the next election first and foremost, and instead of doing the right thing, they do the expedient thing. Future generations of taxpayers and former employees deserving of a pension (that they’ve been promised) will be left holding the bag.


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