The Santa Clara County Board of Supervisors passed the second and final reading of an ordinance that will ask voters to increase the sales tax by one-eighth cent in November, increasing the local tax rate from 8.375 percent to 8.5 percent. The board voted 4-0 Tuesday, with South County’s Supervisor Mike Wasserman absent.
Previously, Wasserman voted twice against the sales tax measure for fear it would hurt small businesses owners.
“I don’t believe increasing taxes is the right way to solve an issue,” he maintained. “We already have people in businesses leaving, and I don’t think increasing the sales tax is the way to encourage them to stay.”
Rather than bump up the sales tax, Wasserman said the alternative is to “continue to be more efficient, as we have been in these last 18 months.”
He highlighted measures recently implemented at the county level, including a 7 percent reduction in compensation for all employees, and lowering wages by 10 percent for all newly hired staff. Such tactics enabled the county to uphold a status quo budget for the first time in a very long time, he said.
“Everybody needs money,” Wasserman replied, when asked if he thinks the county doesn’t need the extra tax revenue. “That’s not the issue… I think this is not the right time to increase taxes on people.”
The fact Santa Clara County already has one of the highest tax rates in the state is not ancillary to encouraging people to “live here, start and expand here,” he added. “Increasing sales taxes is not the way to improve that.”
If the measure is approved by voters, revenues collected from the proposed one-eighth cent general purpose sales tax could be an estimated $500 million over 10 years. The sales tax would go into effect April 1, 2013, and sunset in 10 years.
“The county has taken a hard look at the future and how to fund critical services for our community, such as trauma and emergency services,” said board President George Shirakawa.
“With a questionable outlook for state and federal government funding, and after 10 consecutive years of substantial budget reductions to services and programs, we need to look at other revenue sources for the benefit of the community.”
The measure will be placed on the Nov. 6 ballot, along with a measure from the Santa Clara Valley Water district. The $54-per parcel tax, known as the Safe Clean Water and Natural Flood Protection Plan, seeks to extend the special parcel tax established in 2000 that would otherwise expire in 2016 for another 15 years.
While Wasserman said he is not in favor of Gov. Jerry Brown’s statewide tax initiative – which will temporarily increase the personal income tax on the state’s wealthiest taxpayers by up to 3 percent for seven years, and increase state sales tax by 0.25 percent for four years – the water district’s parcel tax “is a little more complicated,” he said.
With water being the “most important resource,” Wasserman said he needs to give the measure additional analysis before he decides whether to support it.
As for the county’s sales tax increase, the funds raised would go to:
• Trauma and emergency services, including the Burn Center, Neonatal Intensive Care Unit and a level I Trauma Center at Santa Clara Valley Medical Center.
• Preventive health programs including prenatal care, pediatric care, obesity prevention, and diabetes care.
• Public safety services including fire and sheriff.
• Economic development programs to support job creation in Santa Clara Valley.
• Disease prevention programs to stop the spread of tuberculosis, syphilis, HIV and other diseases.
• Housing for homeless children and families.
• Dental care, mental health, and drug and alcohol treatment.
• Emergency preparedness.
Despite a decade of budget reductions and declining state and federal revenues, Santa Clara County has worked to provide a healthy quality of life for residents, including underserved communities who are especially vulnerable during difficult economic times.
“Some sectors of the economy are rebounding, but there is still a lot of uncertainty about local impacts as well as those resulting from state and federal government funding issues,” said County Executive Jeffrey V. Smith. “We have taken action and made the hard decisions needed to reduce costs. We wouldn’t be asking residents to consider a one-eighth cent sales tax if we had other choices.”
Last year, county employees and labor unions gave up wages, salaries, and benefits valued at $75 million in ongoing savings.
