Transient Occupancy Tax (TOT) revenues have steadily grown countywide for the past eight years, but in 2008, they started leveling off and even dropping in some cases, according to the Sonoma County Economic Development Board report.
For most of 2008, the City of Sonoma posted an increase in TOT revenue. However, the third quarter of 2008 (June, July and August) showed a drop of around one percent compared with summer 2007. That compares to increases year-to-year in the other three quarters of around six percent.
Sonoma is in good standing compared to other cities. It accounted for 12.13 percent of TOT collected in Q3 2008, ahead of all cities but Santa Rosa, which accounted for 17.27 percent. The unincorporated area represents 40.63 percent of the total. In 2001, Sonoma collected $1,509,480 in TOT. The total for 2008 stood at $2,001,366.
The TOT assessment rate varies per city. It is the highest in Rohnert Park and Healdsburg at 12 percent and the lowest in Windsor at 8 percent. In Sonoma, it stands at 10 percent.
Sonoma County saw significant increases in TOT between 2005 and 2007. The areas that posted the highest percentage change from 2006 to 2007 were Healdsburg, Windsor, the unincorporated areas, and Cloverdale, which all have expanded lodging offerings.
The county receives TOT revenues from the unincorporated area, of which 25 percent go toward the county general fund and 75 percent goes towards advertising and marketing for the county. In the City of Sonoma, TOT funds go straight to the city general fund.
Existing TOT revenues have been projected to increase at an annual average rate of 5 percent over the next four years.
Planned Developments
The county estimates that some 1,114 rooms would be added over the next several years if all proposed projects were completed. The only project proposed within Sonoma city limits is a four-room vacation rental. The county has 29 lodging property applications in the approval process. Approximately forty percent of the new rooms are projected to be complete by the end of 2009.
