POINT ARENA, CA., 4/27/26 — On Tuesday, the Point Arena City Council voted to place a transient occupancy tax measure on November’s general election ballot. Councilmembers voted yes with one abstention due to a conflict of interest. The measure proposes to increase Point Arena’s TOT by 2%.
Visitors who stay in Point Arena’s hotels or short-term rentals are currently subject to a 12% city transient occupancy tax and a 1% Mendocino County TOT. A 2% increase would mean a 15% tax would be tacked onto a visitor’s hotel bill.
Transient occupancy taxes are typically put in place to compensate local governments for the increased public service costs incurred by serving tourists. The city calculates that a rate increase of 2% would grow the TOT’s revenue from $215,000 to $251,000, generating an additional $36,000 for the city’s general fund.
In November of 2024, voters in Fort Bragg voted overwhelmingly to increase its TOT by 2%. Similarly to Point Arena, the city’s tax went from 12% to 14%. Fort Bragg predicted the increase would bring $400,000 to the city, funds that would be directed to reduce the impact of tourism on the city’s public services.
Yet measures like these don’t always pass. In that same year, Ukiah’s Measure W, which proposed to increase the city’s occupancy tax from 10 to 13%, was defeated by a narrow margin.
If Point Arena were to adopt a transit occupancy tax of 14%, that rate would rank it at the higher end of the state’s TOTs. Other cities with a 14% TOT include San Francisco, Los Angeles and Sausalito.
An increase in TOT charges might affect visitor spending or a tourist’s decision to stay in Point Arena at all. The nearby town of Gualala, for example, only charges a 10% TOT.
Stakeholders have raised concerns that the existing TOT funds have not been used effectively to support tourist activity in the town. Clifford Grady, owner of the Wharf Master’s Inn, said he believes that little funding has been directed to benefiting his business by promoting tourism.
“I don’t feel the tax I’m paying Point Arena now goes towards what the money is supposed to be utilized for,” said Grady.
He plans to vote no on the measure: “At this point 12% is plenty for Point Arena.”
However, the city’s finances are on fragile footing. Just two years ago, Point Arena was on the brink of bankruptcy, with just $28,000 in its checking account. To stay afloat, the city had to reduce its payroll by 50%, increase its sales tax and impose an indirect administrative fee.
Point Arena city officials continue to explore new ways to grow the city’s revenue. City Manager Molly Haviland pointed out in Tuesday’s meeting, “There are currently two identified ways for the city to increase its general fund, and one of them is through TOT and the other one is through business licenses.” A boost in TOT funds could be vital for the city to overcome its fiscal challenges.
Now that the council has approved this new ballot measure, the city attorney will prepare the ordinance language. That draft will undergo final approval by the city council. Finally, the ordinance will be considered by the voters, as the public weighs the potential impacts of an increased TOT in November. The measure would require a simple majority vote.
Usually an increased transient occupancy tax (TOT) also affects camping rates for cabins and campsites, not just the hotels. I wonder if the Manchester Beach/Mendocino Coast KOA would have to raise rates? Campers do not add costs to a city budget, in fact, they go to stores and bring in outside money to the local economy. That’s a good thing.
However, if you want less of something, tax it more.