A November ballot measure could profoundly change how essential government services are funded in California. The statewide fight to stop it has reached Silicon Valley.
Labor, community and city leaders from Mountain View, Los Altos and San Jose rallied with signs and horns on Wednesday against a business community-sponsored initiative known as the Taxpayer Protection and Government Accountability Act. If passed, the law would make it harder for state lawmakers and local voter initiatives to raise taxes. It would also reclassify fees for public services and programs as taxes, requiring voter approval for adjustments.
The measure has qualified for the ballot and will apply retroactively to January 2022 – effectively canceling any special taxes approved in Santa Clara County in recent years. This could include changes to Santa Clara’s business tax Measure H, a “headcount” tax with larger companies paying more than smaller ones, as well as an $85 parcel tax renewal across the Campbell Union High School District known as Measure O, raising money for mental health services and staff hiring.
“It’s really a ‘Taxpayer Deception Act,’” San Jose Councilmember David Cohen said at the rally.
The local community group Working Partnerships USA says the bill, if passed, could affect as many as eight recently passed ballot measures in Silicon Valley — totaling $64.3 million in annual losses in cities such as Los Gatos and Palo Alto.
The $17 million campaign for the measure is spearheaded by the California Business Roundtable, composed of senior executives of major companies up and down the state, such as Apple, General Motors and Procter & Gamble. It’s also being supported by the California Business Properties Association. Proponents argue the initiative closes loopholes that empowered state lawmakers and unelected government administrators to raise fees for services.
Rob Lapsley, president of the California Business Roundtable and co-chair of the Taxpayer Protection Act, said there’s nothing more democratic than giving the voters the right to weigh in on all future taxes.
“That’s exactly what the Taxpayer Protection Act does,” he told San José Spotlight. “It’s no surprise that the same politicians who have made San Jose the least affordable metro area in the nation for middle-class residents would oppose voters’ efforts to rein in out-of-control taxes and fees.”
The San Jose Chamber of Commerce did not respond to requests for comment.
Gov. Gavin Newsom and state leaders have sued the measure’s sponsors to block it from making the ballot, arguing its proposed revisions to the California Constitution could hamstring essential public services. The state Supreme Court is expected to make a decision in the coming weeks, with June 27 being the last day to set the November ballot.
Rally attendees called the measure a ploy by corporations to avoid paying their share for things such as development impact fees associated with construction projects, which can help communities fund infrastructure improvements.
“This is a law that will allow corporations to avoid paying their fair share and pass the cost of essential services to working families,” South Bay Labor Council Executive Officer Jean Cohen said. “These vital institutions are at risk of being slashed and dismantled.”
Others called it a logistical nightmare waiting to happen.
“All these cities that are planning their budgets won’t be able to do so because they don’t know whether this retroactive measure would erode all the plans they have made — and ballot measures their residents already supported,” Los Altos Councilmember Neysa Fligor said at the rally.
Mountain View Councilmember Ellen Kamei said the measure could halt a property transfer tax that leaders recently are moving towards putting on the November ballot to help fund a $160 million public safety building to house its police, fire and emergency dispatch operations.
“This is incumbent on local jurisdictions to make sure the people who serve our community have the top resources and equipment they need to serve us,” Kamei said.
Contact Brandon Pho at brandon@sanjosespotlight.com or @brandonphooo on X, formerly known as Twitter.
This story was originally published by San Jose Spotlight, and can be viewed here.
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“This is incumbent on local jurisdictions to make sure the people who serve our community have the top resources and equipment they need to serve us,” Kamei said.
You do: it’s called property taxes. Now use them wisely.
PS spending money to see whether UBI works is not using it wisely. Of course poor people are happier when you give them $500. We had to spend $300k in city money to study that? lol.
Maybe you can look at police overtime. I’m sure there’s a few million to spare. Is it not enough that a police officer got paid $600k a few years ago?
Or maybe the cops can behave and not cost us $500k settlements.
A better name for this measure is the Corporation Protection Act. Shame on the large corporations who are banding together and trying to escape from paying their fair share when it comes to paying for government services.
“Rally attendees called the measure a ploy by corporations to avoid paying their share for things such as development impact fees associated with construction projects, which can help communities fund infrastructure improvements.
“This is a law that will allow corporations to avoid paying their fair share and pass the cost of essential services to working families,” South Bay Labor Council Executive Officer Jean Cohen said. “These vital institutions are at risk of being slashed and dismantled.””
State politicians are being hypocritical though, as they ALREADY forced MV to cut developer impact fees before they would approve our new Housing Element, thanks to advocacy from the CA YIMBY political movement. When these fees are not collected, residents face a miserable choice: 1) let the common infrastructure increasingly rot (that is, schools, parks, libraries, utility grid, etc.) , or vote for other bills to increase taxes on ordinary residents (in other words, “we the little people”) to avoid living in misery from a decaying infrastructure.
Note that Sundar Pichai, the CEO of Google and Alphabet, and serves on Alphabet’s Board of Directors, is also a member of the Business Roundtable. I understand that Google is currently subject to a “headcount tax”, so they will benefit if this “Taxpayer Protection and Government Accountability Act” passes.
I find it absurd that density is being forced on MV in order to help Google hire and house more high wage workers, and at the same time the company is actively working to avoid paying their fair share to expand the common infrastructure. That’s called “Privatize the profits, Socialize the Costs”, and “only the little people should pay taxes”.
Shame on the large corporations who are banding together and trying to escape from paying their fair share when it comes to paying for government services.
Leslie, what exactly is the”fair share” of what they should be paying? What number would satisfy you as being fair? Your claim seems(is!) vague and I’m not sure the companies will know what will make you happy.
So let me get this straight, today if Sacramento wants to raise taxes, they have to pass it with a 2/3 majority (66%). But… if some group puts a “tax measure on the ballot” then it only takes 50%+1 to pass it.
No politician wants to be known for raising taxes on their constituents, but if people want to raise taxes on themselves, they are more than happy to support it.
So Sacramento says to the local people, “We aren’t going to deal with your petty issues when it comes to raising local taxes, just find a group to sponsor a ballot measure and you can pass it with a smaller percentile.”
My understanding is that this bill makes passage of “initiative tax changes” the same as the requirements at the state level (which were put in place because it was too easy for Sacramento to raise taxes before.)
Now of course the politicians don’t like this because now they A) have to justify a tax hike, regardless of how it is proposed, and B) they will be scrutinized more when the increases don’t give the promised results.
Politicians, including local ones, prefer to have the ability to raise as much “funds” as they want for all their projects, rather than making the tough choices between the competing projects (which is why I thought we elected them, to make choices, not to try to figure out how to raise more money for more projects).
So tell me again how leveling the playing field is a bad thing?
“Leslie, what exactly is the”fair share” of what they should be paying? What number would satisfy you as being fair? Your claim seems(is!) vague and I’m not sure the companies will know what will make you happy.”
Government services are not free. I think that many young people do not understand that. Construction and operation of schools, libraries, police and fire departments, and other aspects of the common infrastructure that everyone benefits from but nobody wants to pay for, are not free. They don’t exist by magic, somebody has to pay for them. That’s why taxes and fees are enacted, to collect funding for them. Tell me, do you think such services have value and should be continued? If so, who do you think should pay for them?
There was a time, prior to Prop 13, when funding for these services was a SHARED RESPONSIBILITY between businesses and homeowners. Since Prop 13, that responsibility is increasingly on the shoulders of homeowners alone, because both residential and commercial property is protected by Prop 13. The tax basis of property is reset every time a property changes ownership. Residential property turns over much more frequently than commercial property, which means the tax basis for a typical residential property is much closer to “current market value” than the tax basis for commercial property. This means that commercial owners are now collectively paying much less in property taxes relative to ordinary homeowners than they used to pay. Furthermore, businesses have clever lawyers who have figured out schemes that preserve “ownership” when commercial property is sold. Got that? So the tax basis for the property remains the same low value for the new owner as the old owner was paying.
In order to work within Prop 13 limitations, local governments have enacted other mechanisms to obtain funding from businesses, such as the “head tax” described in the article. Even though Prop 13 is already giving great tax breaks to them, companies like Apple and Google (who earn Billions of dollars every single day!) want to pay EVEN LESS to fund the common infrastructure (again, schools, libraries, police and fire departments, etc.) are not satisfied, they want to pay even less. The trend is that ONLY RESIDENTS pay for local government services, businesses pay nothing, no matter how extremely profitable those businesses are.
Everyone who believes that “only the little people should pay taxes” should support what Apple, Google, and other members of the Business Roundtable are trying to accomplish here. Less funding from wealthy corporations means either more tax burdens on ordinary Jane and John Taxpayer, or reduced quality of these services. Without sufficient funding, these services will wither away and die. Ordinary taxpayers are obviously not nearly as able as corporations like Apple and Google to pick up the tab for these bills.
Everyone who does not value schools, libraries, police and fire departments, etc., should support w as well.
L.B. / unfortunately, Economics of Governments is not a required high school graduation requirement. Otherwise, the issues that you try-to-teach would be much better understood, and you would not have to fill-in-the-many-blanks in most people’s understanding.
A “special tax” like a “head tax” is a fine way to distribute the taxation burden. It would even be nice to have a “Henry George Land Tax” to harvest the basic wealth-of-land into the common-good revenue stream.
This measure to me is an obvious Corporate scam. Like other Ballot Corporate scams I hope it is voted down / election after election / ’till they get tired.