Mount Shasta voters to determine whether to increase hotel taxes

Mount Shasta, the region’s top tourism destination, will consider raising its hotel bed tax to address a yawning shortfall in the city’s budget. 

Voters will decide this fall whether to increase the transient occupancy tax rate (TOT) in Mount Shasta from 10% to 12%. The increase is expected to add another $3.40 a night to the cost of a $170 per night hotel room. The increase would also apply to stays in vacation rentals, lodgings that also pay the hotel bed tax. 

“The point is, we don’t have a choice. We have to pass this,” City Councilman Jeffrey Collings said flatly during a special meeting of the City Council on July 27, where he called to finalize language for the ballot proposal.  

“And we pray that it’s gonna pass. Because if it doesn't we're in deep trouble,” Collings added, noting tax measures must be approved by two-thirds of voters casting ballots.

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Mount Shasta is trying to dig out of a $475,000 budget hole, resulting from a combination of rising salaries and revenue that has not kept pace with expenses. An extra 2% in TOT is expected to generate $240,000 a year, city officials say.

Hoteliers like Todd Anthis, who operates the Shasta Inn and Strawberry Valley Inn, urged the city to proceed more slowly. He proposed the idea of possibly increasing TOT only 1%. 

A 2% increase can place rooms above the $200 per night mark, which can turn off some visitors, Anthis told the council.

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“All of a sudden Weed and the other markets…start looking a little more attractive,” he added. “And Tahoe is more attractive. We don’t want to price ourselves out."

The transient occupancy tax rate in neighboring cities Weed, Dunsmuir and Yreka is 10%. 

Mount Shasta and other officials are quick to note the particular nature of hotel bed taxes — they are paid by travelers, and not by residents. Yet, the revenue raised goes into the city’s general fund to be used for providing the many jobs and services the city supports. 

Collections of hotel bed taxes in Mount Shasta have increased about 31% in the last five years, a function of increased visitation and rising hotel rates. In fiscal year 2021-22, the city collected $1,186,841 in lodging taxes, according to Muriel Terrell, finance director for Mount Shasta. The most recent fiscal year ended June 30. As of May, Mount Shasta had collected $990,269.

Skip Descant is a freelance journalist. He’s written for newspapers in California, Arkansas, Mississippi and Louisiana. He lives in downtown Yreka. he can be reached at edescant@me.com