Should Gilroy voters approve Measure B? (November 3, 2026 ballot)

What's this about?

People disagree about whether Gilroy voters should approve Measure B on November 3, 2026.

The plan would raise the short-stay room tax from 9% to as much as 13%.

What supporters say

• Visitors would pay most of the new tax, not people buying daily goods in Gilroy.
• The city could use the money for roads, parks, safety plans, police, and fire help.
• Yearly checks by people outside city hall could help the public track the new money.
• Some studies show that higher room taxes may not greatly cut hotel stays or jobs.

What critics say

• Measure B sets a top rate, not one fixed rate, so the city could raise it later.
• Hotels may pay some of the tax through lower profits, or charge guests more.
• The plan names many uses but does not promise money for any one project.
• Visitors who pay more for rooms may spend less at Gilroy shops and other local firms.

How to read this

The number of points on each side does not show who is right; check how strong each point’s proof is.

Measure B would change Gilroy’s transient-occupancy tax, charged on short-term lodging. Voters will decide Nov. 3, 2026, whether to raise the current 9% rate to a maximum of 13%, with the city estimating about $700,000 a year in new revenue.

The case for

Supporters say Measure B would create a visitor-linked source of city revenue rather than directly taxing ordinary household purchases. Hotels and other lodging businesses would collect the tax from guests, who are the legal taxpayers. In practice, however, the economic burden could be shared with hotels through lower margins or reflected in higher room prices. 1

The ballot materials identify street repairs, parks and recreation, emergency preparedness, and police and fire services as potential uses. Those are established city responsibilities, and supporters could view the broad list as giving officials flexibility to respond to local needs. But the available record does not show the size of any specific budget shortfall or guarantee that a particular project would receive funding. 2

Measure B includes annual independent audits, and Gilroy’s charter separately requires the publication of audited financial statements. Those rules would make the new money easier to track than revenue with no reporting requirements. They would not, however, show on their own whether the spending was efficient or whether promised improvements were completed. 3

The strongest economic argument for the measure comes from research suggesting that hotel-tax increases do not necessarily cause large declines in average lodging activity. One peer-reviewed study found negligible average effects on hotel sales and employment. If that finding applies to Gilroy, the city could raise revenue without substantial average job losses. The study does not provide a specific forecast for Gilroy’s hotels. 4

The case against

The measure would authorize a maximum rate, not one fixed rate. The ballot question and council resolution describe an increase from 9% to as much as 13%, leaving important decisions to the City Council. Voters therefore would not know from the ballot exactly what rate would eventually apply or how the future burden might change. 5

The spending promises are also broad. The measure lists several categories but does not establish funding amounts, performance goals, or a conventional sunset date. An audit could show how much money was collected and where it went, but it could not guarantee that the spending produced measurable improvements. 6

Opponents also point to possible costs for hotels and businesses that depend on visitors. The same peer-reviewed study that found little average effect on hotel sales and employment found more financial stress among hotels in cities with higher taxes. A separate University of California, Santa Barbara analysis argues that higher lodging taxes can make visits more expensive and reduce tourist spending, potentially affecting local businesses and hotel workers. That analysis is not a Gilroy-specific forecast.

The evidence does not establish who would ultimately bear most of the tax. Hotels might pass it on to guests, absorb part of it through lower profits, or face weaker demand. The city’s estimate of roughly $700,000 a year is an official projection, but the available materials do not reveal the underlying assumptions about room nights, occupancy, rates, or sensitivity to price changes. State data could help test Gilroy’s past lodging-tax collections, but the relevant local figures are not included in the record.