Gilroy voters have approved Measure B, which lets the City Council raise the city’s transient occupancy, or hotel, tax from 9% to as high as 13%, San José Spotlight reported. KQED’s Associated Press tally, updated at 9:59 p.m. PT on Nov. 9, showed 11,009 yes votes, or 65.5%, to 5,779 no, or 34.4%. The results are unofficial. The measure needed a simple majority.
Why it matters: City Administrator Matt Morley told Spotlight the initial plan is to go to 11% on Jan. 1, 2027, which he said would still be among the lower rates in Santa Clara County. He estimated about $300,000 a year in added general-fund revenue at 11%, or about $700,000 at 13%. Any later increase up to the 13% cap would need a council vote at a public meeting and would take effect 60 days later, he said.
The tax applies to hotel, motel and short-term rental stays, not to sales tax on retail or restaurant meals. Councilmember Terence Fugazzi, who backed the measure, said the added money could “pay for another two police officers.” Comfort Inn Gilroy owner Ray Vasant said he accepted the vote but asked the city to stop at 11%, arguing that “a few dollars a night decides whether a guest stops in Gilroy or drives 15 minutes further.”
Gilroy first adopted a 5% hotel tax in 1971 and raised it to 9% in 1983, Spotlight reported. Morley compared an 11% rate with Morgan Hill’s 11% and unincorporated Santa Clara County’s 10%.