In November, the County of Santa Clara will ask voters to approve a 10-year sales tax increase. Their hope is that the extra $500 million that the tax would raise over the next decade could protect services from further cuts.
However, the road to passage will likely be littered with pitfalls, as residents in the county are also going to be asked for an extra quarter-percent sales tax hike by Governor Brown as part of his tax plan. Additionally, the city of San Jose is considering either a quarter- or half-percent increase to the city’s sales tax rate. If all three measures were approved, sales tax in San Jose would increase from an effective rate of either 9 or 9.25 percent.
“The County must take steps to ensure its own destiny,” said Board of Supervisors President George Shirakawa in a statement. “We have struggled for 10 consecutive years with substantial budget reductions to services and programs, and faced with uncertain funding from the state and federal government, we have to look to a sales tax to continue critical services to the community.”
The measure received initial approval in a 4-1 vote, with Supervisor Mike Wasserman dissenting.
“I can’t support the proposed sales tax,” said Supervisor Mike Wasserman. “State and local taxes are already so high and I’m afraid that an additional tax burden could drive residents and businesses out of the area.”
If approved the tax measure would provide additional, unrestricted revenues to the County General Fund.
Part of the County’s plan to ensure long-term solutions to continuing fiscal challenges, the County has created the Center for Leadership and Transformation program. The CLT will drive the change that needs to take place in the organization to find new and more efficient ways to deliver services. To date, the CLT teams that are currently working have created over $400,000 in ongoing savings and over $1 million in one-time savings, as well as numerous client and customer service improvements.
In addition, last year, County employees and labor unions gave up wages, salaries, and benefits valued at $75 million in ongoing savings.
“Moving forward with a one-eighth cent sales tax is the next logical step following tough choices we’ve made over the past few years,” said Supervisor Dave Cortese. “The County has established a willingness to be fiscally responsible, clearly demonstrated by the great strides we’ve made to tighten purse strings and the $75 million in concessions made by County employees.”
The Board requested the administration report back at the August 7 meeting with additional information on specific County services that would receive funding from the proposed one-eighth cent sales tax, as well as how the current economic and employment outlook will affect the County.
“We are reduced to this ridiculous tax situation that began with Proposition 13,” said Supervisor Liz Kniss. “We are totally dependent on ourselves and have to tax ourselves locally to support services that we as a community believe are valuable to the welfare of our valley.”
The matter will be on the agenda of the August 7, 2012 Board meeting, which would be the last opportunity for the Board to finalize its vote to place a measure on the November ballot before the August 10 deadline.