The San Diego City Council Tuesday unanimously voted to recommend the city use nearly 10% of its annual Transient Occupancy Tax revenue to fund arts and culture, nearly double the current amount.
Tuesday's action does not immediately allocate the funds, but does send a message to Mayor Todd Gloria for next year's budget process that the council believes the discretionary funds in question should fund the arts.
"Hotel tax revenues should be reinvested into our communities and into our workers," said Councilman Raul Campillo, who, along with Councilwoman Vivian Moreno, sponsored the resolution. "Today's vote prioritizes the intentional investment of TOT funds into arts and culture so that we retain our creative workforce.
"By investing in the arts, we also invest in the city of San Diego's economic well-being and in quality of life for San Diegans."
The TOT is San Diego's 10.5% hotel tax. Of every 10.5 cents taxed on dollars spent in city hotels, 5.5 cents goes directly into the city's general fund with the other 5 cents going to the TOT fund. Of that latter pool of funds, 4 cents must "be used solely for the purpose of promoting the city," and the remaining cent is up to the council's discretion.
In the 2022-23 fiscal year, TOT revenue totaled $256.7 million. Arts funding was $14.3 million, 5.59% of the total.
"Arts and culture activity is critical to the vibrancy and economy of San Diego," Moreno said. "Every year, arts programming is on the chopping block in the budget, despite the council's stated goal to provide stable funding every year.
"It is crucial that the City Council do all it can to ensure that our communities have access to visual and performing arts and community festivals," she said. "This policy change will allow the council the opportunity to make clear its expectations on fulfilling the Penny for the Arts Plan goals."
In 2012, the council voted to approve a "Penny for the Arts" plan that would increase arts and culture funding from the city's TOT. The plan's recommendation included restoring arts and culture funding levels to 9.52% of annual TOT revenue by 2017. However, the council's adopted arts and culture budget for the 2023-24 fiscal year was only 4.67% of TOT revenue, according to city data.
Tuesday's resolution is intended to bridge that "penny gap" for arts funding in the city. It encourages Gloria and staff to increase funding for the arts to that 9.52% in each budget in order to meet the Penny for the Arts goal
"By finally achieving the Penny for the Arts promise, San Diego will ensure that talented people in the arts and culture space stay here in San Diego instead of moving to other cities in search of better opportunities, and San Diego will be a more vibrant and rich place as a result," said Christine Martinez, director of Arts+Culture: San Diego.
Tuesday's action also directs the Independent Budget Analyst to conduct additional analysis on whether each annual proposed budget meets the intent of the council recommendation to use 9.52% of TOT funds for arts and culture, a statement from Campillo's office read. Additionally, the policy requests additional reporting from Gloria and the Department of Finance on how TOT revenue is being expended.
Earlier Tuesday, Campillo and Moreno were joined by more than 30 arts and culture advocates who came to support the item.
