Two tax measures in Santa Rosa that would increase rates on city businesses and overnight guests at local hotels led to early revenue.

Passage of Measure EE and FF, as the levies are known, would generate an estimated $4.2 million annually to boost city coffers, as the city is looking to cut spending and raise revenue to address a growing deficit.

Measure EE would update the city’s business license fee, which is charged to the nearly 13,000 retailers, service providers and contractors registered to do business in the city, raising the maximum fee charged to large businesses from $3,000 to $10,000.

With 41 percent of all potential votes counted, he led by about 65 percent, according to preliminary results released shortly after polls closed at 8 p.m.

The lodging tax measure, Measure FF, which would increase the transient occupancy tax by 2 percentage points, also led with 67 percent, based on the same share of the total potential vote counted.

Both need a simple majority to pass.

No tax has been updated in 30 years, and the campaign behind the measures, led by Mayor Natalie Rogers, Vice Mayor Mark Stapp and supporters who include labor officials and small business owners, say the increases would ensure businesses and visitors they pay their fair share to the city. services without accessing individual residents for more money.

Initial results released Tuesday include mail-in ballots that were processed before Election Day and early in-person voting. The count did not immediately reflect ballots cast on Election Day or mail-in ballots sent or stamped as of Tuesday.

There are 103,949 registered voters in Santa Rosa.

The Press Democrat generally relies on information from election officials and campaign officials before naming a winner because not everyone who received a ballot will be voted in the race.

Under Measure EE, the city would institute a new tiered minimum tax structure and raise the cap to $10,000 for the largest businesses.

Companies generating gross receipts of $100,000 or less will pay a minimum of $200. Businesses that generate between $100,000 and $500,000 will pay $500, and those reporting between $500,000 and $1 million in gross receipts will pay $800.

Larger businesses with gross receipts in excess of $1 million will pay a minimum of $1,000 plus an additional rate for gross receipts over $1 million, up to a cap of $10,000.

The maximum fee will be adjusted annually for inflation, capped at 4%, to ensure more gradual increases over time.

Short-term rental operators will be required to pay business tax in the future.

Measure FF would increase the city’s transient occupancy tax from 9 percent to 11 percent.

The tax is charged to guests staying overnight at Santa Rosa hotels and other accommodations such as vacation rentals.

Two existing additional taxes levied in the city to help pay for tourism promotion would raise the new total lodging tax to 16 percent if Measure FF passes, the highest in the county along with Healdsburg.

Opponents argued the increases would burden small businesses and discourage visitors from coming to Santa Rosa, both of which would hamper the local economy.

No on EE and FF, led by Santa Rosa resident Eric Fraser, argue that the increased costs of doing business will force businesses to close or relocate, and the costs will be passed on to residents.

The group also argues that revenue from the two measures will be mismanaged and that the city needs to do more to manage its fiscal problems rather than trying to balance its budget on the backs of local businesses.

The Yes campaign characterized the group’s arguments as flawed and said the measures would not deter business growth or tourism.

The new rates will take effect in January if the measures pass.

You can reach writer Paulina Pineda at 707-521-5268 or [email protected]. On X (Twitter) @paulinapineda22.