That's a silly argument. The point of the ad is that the hotel taxes allow the city to offer better public services. Of course if your analysis only considers 1.4% of the tax money you'll find the benefits aren't that impressive. But then you have to account for what the other 98.6% of the money is doing: presumably providing other public services!

If SF spent the whole $12 million on libraries, that would be $55/employee/day, which seems plenty to keep libraries open for an extra few hours. Even if SF only spent "some" of the money on libraries, as the ad suggested, even spending $3 million would come to $14/employee/day which seems enough for a meaningful expansion of services.