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Will the Arroyo Grande City Council move to increase TOT tax?

January 12, 2026

By KAREN VELIE

In an attempt to raise revenue, the Arroyo Grande City Council will consider increasing its Transient Occupancy Tax (TOT) at its meeting on Tuesday.

City staff estimates that a 1% increase in TOT could generate approximately $150,000 to $165,000 annually, while a 2% increase could generate up to $330,000 annually. Several other local jurisdictions have approved TOT increases of 1% to 2% over the past decade.

In addition, a new state law allows cities to enact an ordinance to require short-term rental hosting platforms such as Airbnb and VRBO to provide quarterly booking and revenue reports. The City Council will also consider updating its Municipal Code.

If the City Council votes to increase TOT, it would need to go to a vote of people in 2026 0r 2028. The staff report suggests there is a chance for viability if there is an educational outreach effort.

 


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City officals have left themselves few other options. They have failed at righting the pending financial disaster ahead, the ice berg has been spotted, and since they can’t dramatically increase property taxes, and they refuse to reduce waste and fraud and cut where needed, so they are left with looking for new sources of income.


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Lets do 25%, just think about all the money you’ll have to spend.


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