Measure E would raise Monterey County hotel tax to 12.5%

Monterey County's Measure E would raise the hotel tax in unincorporated areas from 10.5% to 12.5%. The increase, on the Tuesday, Nov. 3 ballot, is projected to generate about $7.6 million a year for the county's General Fund, according to the Monterey County Weekly.

The Transient Occupancy Tax (TOT) applies to hotels, motels, vacation rentals and homestays in unincorporated communities including Pebble Beach, Carmel Valley and Big Sur. Cities set and collect their own hotel-tax rates separately.

The county is pushing the increase to close widening budget gaps. A staff report presented to the Board of Supervisors in April projected a General Fund deficit of $118.8 million for fiscal year 2026-2027, rising to $162 million by 2029-2030, Monterey County Weekly reported. Each 1% increase in the TOT generates roughly $3.8 million, according to that staff report.

The board, including Supervisor Kate Daniels, voted 5-0 on April 14 to spend $83,500 on consultants to gauge voter appetite for a TOT hike and a separate luxury-home transfer tax. At that stage, the county was studying a smaller increase to 12%. No public explanation has surfaced for why the final ballot measure landed at 12.5%.

Monterey County Government said in a Thursday, Oct. 8 social media post that the TOT is paid almost entirely by visitors and that all revenue stays local to support public services.

The unincorporated county's current 10.5% rate is the lowest on the Peninsula. The cities of Monterey, Pacific Grove and Seaside each charge 12%, according to 2025 lodging data compiled by the Carmel Innkeepers Association. Napa County charges 13% and San Francisco charges 14%, according to Monterey County Weekly.

In 2025, the unincorporated county's roughly 1,815 hotel rooms brought in about $19.5 million in TOT revenue at the current rate, the innkeepers' data shows. Those properties averaged a $394 nightly rate and 71.1% occupancy.

Measure E is not the only hotel-tax question on the Nov. 3 ballot. Carmel-by-the-Sea's Measure M would raise that city's TOT from 10% to 12%, projected to add about $1.9 million a year.

No formal opposition has surfaced. The Monterey County Weekly editorial board endorsed a yes vote on Oct. 1, writing that the increase "won't make our community's hospitality rates uncompetitive."

If Measure E passes, the effective date of the new 12.5% rate has not been publicly announced. Voters go to the polls Tuesday, Nov. 3.