Unless voters can trust what county will do with sales-tax
generated money, no proposal will win approval
Santa Clara County Executive Pete Kutras has commissioned an Oakland political consulting firm to conduct a public opinion poll to determine if voters would once again consider a new sales tax and other potential sources of revenue. If a half-cent sales tax increment is approved, the county could receive $160 million in the course of a year.
Kutras and county supervisors are considering the issue as they face draconian budget cuts that could require the county to address a deficit, which had been estimated in June at approximately $200 million for fiscal year 2009, which begins July 1, 2008.
Supervisors balanced a $227-million deficit during fiscal year 2007-08 through a combination of program and service reductions, the use of one-time funds and issuance of pension obligation bonds. In the latter, the county paid a portion of its pension obligations using the bonds. This is the kind of “borrowing from Peter to pay Paul” financing that got New York City into trouble in the 1970s.
The county’s budget is $4.2 billion. The deficit exists in the budget’s general fund, which is $2.2 billion and represents 10 percent, that’s a large portion of the discretionary funds available to the county.
It will be a matter of trust for voters whether they can approve or reject this new proposal as they turned down last June’s Measure A half-cent sales tax proposal by 53 percent.
In essence, the electorate seemed uncomfortable with the measure whose revenue could potentially have been used for transportation and other county program needs. This was not a general tax. It was disingenuous.
If we want voters to honestly consider tax increases to assist critical social and human services programs that could be threatened by the seventh county deficit in a row we need to have an open, inclusive and frank discussion with voters about where the needed funds are going to go.Â
Let’s not mix transportation needs with human services needs and create further distrust among voters. Let’s even get an assurance from supervisors that will look at their alarming increase in employee pay and benefit costs since 2001, which are being reported to more than twice the national average.
Let’s remember that 80 percent of the county budget is comprised of federal and state mandates, meaning local services and programs the county has elected to provide must be reduced when faced with a deficit.
If this new sales tax recommendation is considered and eventually approved by supervisors, it would put the county at one of the highest sales tax brackets in the state next to San Francisco, Alameda and Santa Cruz, from 8.25 percent to 8.75 percent, if it were a half-cent proposal. That would mean the average county resident buying a $35,000 vehicle would see an increase in sales tax from $2,888 to $3,063, or $175 more in sales tax. It would also mean that an average county resident buying $250 worth of Christmas gifts would see an increase in sales tax from $20.62 to $21.87, or $1.25 more in sales tax.
The county provides the critical safety net services in the community we so often hear about. Given the county budget’s structural deficit, we must take an honest approach and find a solution so that the holes in the safety net do not get any larger and our out-of-control costs of county personnel salary and benefits do not keep growing.
