Mancuso For Santa Barbara

Dylan Mancuso

On March 3, 2026, Santa Barbara newspaper Noozhawk wrote an article describing how the city is seeking to increase taxes on hotels in light to an increasing budget deficit. The claim? Our city is facing a crisis with flatlining tax revenues, mainly our sales tax and transient occupancy tax. Our City Council members solution? Increase transient occupancy tax by 2% and increase retail cannabis taxes by 2%. However, how could our sales tax revenues already be falling flat in light of the increase we faced in early 2025 from 8.75% to 9.25%? In less than one year our city has failed to increase revenue collections, but is raising our transient occupancy taxes the answer?

Priced out?

Hotels in Santa Barbara have long priced out most regular people, demanding exorbitant amounts even for a Motel 6 with rates for this motel reaching as high as $500 for a single night in the summer. A transient occupancy tax will only further exacerbate these already high rates, leading to less visitors and overall less revenues. So the question remains, how can we address our budget deficit without deterring visitors to Santa Barbara? Let’s look to our neighbors in Solvang and see what they have done to increase revenues.

Small Town Big Surplus

Solvang has done an exceptional job of supporting it’s tourism industry, as well as creating a safe, fun, and eventful downtown space. During the Christmas season of 2025, Santa Barbara businesses struggled to compete as traffic was low and sales declined. In Solvang, a very different story was unfolding. Live events, and nightly shows for families, well policed downtown environment and an overall safe atmosphere led to lines coming out of every restaurant. Stores were seeing sales highs, not declines.

Solvang knows that a thriving downtown, means a thriving town, and they are willing to put their money where their mouth is. In light of revenue surplus’s for the city, Solvang is looking to allocate more funds to supporting tourism. Per the Santa Ynez Valley News, “Those funds may be used for Solvang tourism-related services, maintaining pothole, street and sidewalk repair, traffic safety, parking relief, senior, adult and youth recreation programs, maintaining 911 response, and general government use.” (Best & Wood, 2025) One thing is clear, Solvang understands that increasing city revenues does not require increased taxes, but rather increased support for down town, increased policing, increased events, and an increased feeling of a family friendly atmosphere.

Reach out Residents of Santa Barbara

Santa Barbara, we should be taking notes from our neighbors to the north, not raising taxes. I encourage you all to reach out to our City Council Members, as I have below and request our city push for a more thriving downtown filled with events, community policing, and a family friendly atmosphere. Raise revenues, not taxes!

Email our council members, speak on Tuesdays at town hall meetings and make your voices heard.

Letter to our Council Members

Dear City Council Members,

In 2025,  the city of Santa Barbara raised our sales tax rate to 9.25%, an exceptionally high amount. This action was taken due to a budget deficit involved with rising costs of salaries, pensions, construction and other various expenditures. However, this was not successful and just today Noozhawk highlighted that the city has found our sales tax revenue is already falling flat. Some of your tax increase considerations are valid. However, seeing an extra increase to our transient occupancy tax will only continue to hurt small businesses and revenue growth as consumers seek cheaper alternatives to Santa Barbara. 

Rather than focus on tax increases, what can we do to promote sales tax revenue? Things like community policing, creating a safe environment on State Street, and hosting more events could make up the difference here. Every $1,000,000 spent in town represents $92,500 in tax revenue for our city.  Making the city even more expensive to visit than it already is will harm local businesses that could be helping to make up the difference in sales tax. Our city needs to spend a bit more time focused on how it can find the best solution to support business owners, create a safe downtown environment, and promote events in our downtown community and a bit less time focused on how to raise taxes in a city that is already heavily taxed and exorbitantly expensive.  

Our neighbors in Solvang have found that a successful, safe, and thriving downtown has been extremely successful. In June of 2025, they reported a budget surplus of over $900,000, and record high sales tax revenue collections. This was also amplified with a strong TOT tax year. Our sales tax revenues are falling short and there may be a few ideas we could borrow from Solvang, especially the idea of having community policing and visible police officers in the downtown area. Solvang also does an exceptional job during Christmas times and other off season by promoting community events and keeping visitors coming. At a sales tax rate of 8.25%, they are seeing record numbers with the help of policing, a safe family friendly environment, and events that attract visitors.

References

Best, J., & Wood, L. (2025, June 26). Solvang closes budget year with $940K surplus. Santa Ynez Valley News. https://syvnews.com/news/local/solvang-closes-budget-year-with-940k-surplus/article_7d1bae26-9744-5d1c-be8b-21737511e2e2.html

Caraway, R. (2026, March 3). Santa Barbara considers tax increases as city braces for “tough” budget year. Noozhawk. https://www.noozhawk.com/santa-barbara-considers-tax-increases-as-city-braces-for-tough-budget-year/