An eighth-cent sales tax increase would make Santa Clara County a more expensive place to shop if voters OK a proposed tax hike on the Nov. 6 ballot. But it’s also the only way the county would get funds directly from local sales tax revenue, which currently goes straight to state coffers.
Measure A would up the 8.375-percent sales tax in Morgan Hill and Gilroy by another 0.125 percent. Santa Clara County’s would jump to 8.5 percent — matching San Francisco’s as the third-highest in California, according to the state Board of Equalization.
County supervisors voted 4-0 this summer – with Supervisor Mike Wasserman absent – to put the tax increase on the ballot. They said it’s a safety net for local government services because it goes straight to the county instead of through federal and state accounts, which have faced a slew of cuts in recent years and likely more in the near future.
Wasserman has maintained his opposition of Measure A from the beginning, he said, because it’s unfair to ask the public to pay more in spite of an embattled economy.
“Our local taxes are already among the highest in the state,” Wasserman said. “And the cost of living here is already very high. More sales taxes would make it harder to live here.”
Measure A needs a two-thirds supermajority vote to pass. It would go into effect for a decade starting in April 2013. The county estimates it would raise nearly $500 million during that time if voters agree to pay an 8.5 percent sales tax.
Money raised through the tax hike would pay for local services like more public safety workers, health-care for low-income children, public housing for the homeless, programs aimed to keep kids in school, emergency room services and efforts to create more jobs in the region.
Like other ballot measure proposing higher taxes, Measure A has come with its share of controversy – even legal opposition.
Detractors say it’s illegal to put a proposed tax increase on the ballot this way because of Proposition 218, which they interpret as requiring the same elected officials proposing the tax increase to appear on the same ballot for re-election. That appeal and legal interpretation was struck down by a Santa Clara County Superior Court judge in late August.
Taxpayer groups, including the Santa Valley Taxpayers Association argue that the new sales tax could make the region adverse to business in a soft economy, especially when it dovetails with Gov. Jerry Brown’s proposed statewide temporary quarter-cent sales tax increase, which would push California’s 7.25 percent sales and use tax up a half-cent to 7.5 percent for four years to close the school funding gap.
The taxpayer rights group also says the measure would fund unsustainable costs and is only a quick fix for a long-term problem.
But the majority of the county’s elected leaders say they’ve exhausted all other options.
“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,” Board President George Shirakawa wrote in a statement issued by the county about the ballot measure.
County supervisors, excluding Wasserman, say the only reason they’re asking voters to OK a tax bump is because the county has already done its share of cutting costs, wages, salaries and benefits that add up to about $75 million in ongoing savings, according to the county press office.
“The county has exercised the utmost fiscal responsibility by tightening its purse strings – county employees have joined us by making $150 million in concessions between this year and last,” Supervisor Dave Cortese said in a public statement supporting the measure. “We are hopeful that county residents will take these factors into consideration.”
Money raised by the ordinance would only be spent in the county, Supervisor Liz Kniss added.
“There’s no magic wand to find a solution,” she said. “We are dependent on ourselves and need to take action to continue delivering essential services for the welfare of our valley.”
Currently, the bulk of sales tax revenue goes to the state, with nearly 4 percent of to California’s general fund and the rest divvied up to pay off state-level economic recovery bonds and criminal justice, health and social services. Another percent goes to a state fund redistributed to local municipalities and yet another pays for county transportation and city or county government, according to a tally from the California Board of Equalization.
For more information, go to www.sccvote.org.
