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Santa Clara County supervisors propose sales tax to fill $250M deficit

Santa Clara County Board of Supervisors President Cindy Chavez is proposing a sales tax measure to stave off big budget cuts. Photo by Magali Gauthier.

Santa Clara County's board of supervisors are looking into a sales tax measure to patch up a massive hole in the county's budget during the coronavirus pandemic, but it may not have enough support to even make it on the ballot.

County supervisors voted 3-2 Tuesday to consider next month a five-eighths percent (0.625%) sales tax for the November ballot. If passed, it would raise an estimated $250 million each year for the next five years, which proponents say will help the county respond to the COVID-19 public health crisis and stave off cuts to other vital services.

In a pitch for the tax measure, Supervisor Cindy Chavez said that the money will be invaluable for supporting low-income and minority communities that have been disproportionately impacted by the virus, particularly in East San Jose and the South County area. She acknowledged that a sales tax is not a perfect tool -- it is regressive and burdens lower-income families -- but said it would be a short, temporary source of money that doesn't depend on the shaky prospect of state or federal relief.

"This is such a historic crisis," Chavez said. "I am very concerned that without local response -- without us taking our future into our own hands – that relying on the state or federal government to come and save us is just not a real thing."

But Supervisor Susan Ellenberg, who voted to at least consider the idea, said she had deep reservations about supporting a tax that burdens families dealing with unemployment, looming rent payments and food insecurity. And because it's a general use tax, there's no legal way to guarantee voters that the money will be spent specifically on COVID-19 relief efforts.

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"The impact of a sales tax will be felt most acutely by those small businesses and struggling families and individuals that have been hit hardest by the pandemic. We are literally asking those who can least afford to do so to help us bail them out," she said.

The other wrinkle in the debate is that the county has only a tentative idea of what the current and future budgets under COVID-19 will be. Like most public agencies throughout the Bay Area, Santa Clara County is projecting a deficit, but the exact details are still hazy -- the 2020-21 budget is still in flux, and county officials have only loosely referenced a $300 million budget hole.

It's unclear what the final size of the deficit will be, what programs are on the chopping block and what expenditures will be reimbursed by federal or state aid, making it hard for supervisors to weigh in on the tax measure.

"I just don't know how much we need," Ellenberg said.

Supervisor Joe Simitian said he was unwilling to back the sales tax, and said that it's difficult for him to come to voters asking for more money when the county's budget has grown so much in recent years, buoyed by a lengthy period of economic expansion in Silicon Valley. From the 2012-13 fiscal year to 2018-19, Simitian said the budget has grown by 84.3%, vastly outpacing population growth and inflation.

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Not having the tax measure will likely trigger difficult budget cuts in the future, he said, but the alternative is putting the burden on low-income residents.

"This doesn't mitigate income inequality, it actually exacerbates it by taking more money out of the pockets of folks who can least afford it," Simitian said.

The 3-2 vote, with supervisors Simitian and Mike Wasserman opposed, means county staff will craft a framework for the sales tax measure for a final vote in the coming weeks. But it could very likely be dead on arrival, as a four-fifths vote of the board is required to put a general tax on the ballot.

Ellenberg said her support is contingent on whether the tax measure could be contracted to just two or three years, rather than five, and a better road map for how the money will be spent.

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Santa Clara County supervisors propose sales tax to fill $250M deficit

by / Mountain View Voice

Uploaded: Wed, Jul 22, 2020, 12:47 pm

Santa Clara County's board of supervisors are looking into a sales tax measure to patch up a massive hole in the county's budget during the coronavirus pandemic, but it may not have enough support to even make it on the ballot.

County supervisors voted 3-2 Tuesday to consider next month a five-eighths percent (0.625%) sales tax for the November ballot. If passed, it would raise an estimated $250 million each year for the next five years, which proponents say will help the county respond to the COVID-19 public health crisis and stave off cuts to other vital services.

In a pitch for the tax measure, Supervisor Cindy Chavez said that the money will be invaluable for supporting low-income and minority communities that have been disproportionately impacted by the virus, particularly in East San Jose and the South County area. She acknowledged that a sales tax is not a perfect tool -- it is regressive and burdens lower-income families -- but said it would be a short, temporary source of money that doesn't depend on the shaky prospect of state or federal relief.

"This is such a historic crisis," Chavez said. "I am very concerned that without local response -- without us taking our future into our own hands – that relying on the state or federal government to come and save us is just not a real thing."

But Supervisor Susan Ellenberg, who voted to at least consider the idea, said she had deep reservations about supporting a tax that burdens families dealing with unemployment, looming rent payments and food insecurity. And because it's a general use tax, there's no legal way to guarantee voters that the money will be spent specifically on COVID-19 relief efforts.

"The impact of a sales tax will be felt most acutely by those small businesses and struggling families and individuals that have been hit hardest by the pandemic. We are literally asking those who can least afford to do so to help us bail them out," she said.

The other wrinkle in the debate is that the county has only a tentative idea of what the current and future budgets under COVID-19 will be. Like most public agencies throughout the Bay Area, Santa Clara County is projecting a deficit, but the exact details are still hazy -- the 2020-21 budget is still in flux, and county officials have only loosely referenced a $300 million budget hole.

It's unclear what the final size of the deficit will be, what programs are on the chopping block and what expenditures will be reimbursed by federal or state aid, making it hard for supervisors to weigh in on the tax measure.

"I just don't know how much we need," Ellenberg said.

Supervisor Joe Simitian said he was unwilling to back the sales tax, and said that it's difficult for him to come to voters asking for more money when the county's budget has grown so much in recent years, buoyed by a lengthy period of economic expansion in Silicon Valley. From the 2012-13 fiscal year to 2018-19, Simitian said the budget has grown by 84.3%, vastly outpacing population growth and inflation.

Not having the tax measure will likely trigger difficult budget cuts in the future, he said, but the alternative is putting the burden on low-income residents.

"This doesn't mitigate income inequality, it actually exacerbates it by taking more money out of the pockets of folks who can least afford it," Simitian said.

The 3-2 vote, with supervisors Simitian and Mike Wasserman opposed, means county staff will craft a framework for the sales tax measure for a final vote in the coming weeks. But it could very likely be dead on arrival, as a four-fifths vote of the board is required to put a general tax on the ballot.

Ellenberg said her support is contingent on whether the tax measure could be contracted to just two or three years, rather than five, and a better road map for how the money will be spent.

Comments

Tax the giant corporations
Rengstorff Park
on Jul 22, 2020 at 12:58 pm
Tax the giant corporations, Rengstorff Park
on Jul 22, 2020 at 12:58 pm
8 people like this

Tax high tech and other giant corporations - not poor people through another sales tax. One of the sales tax proponents on the Board of Supervisors is running in south county for state senate. His November top-two runoff opponent should jump on this one.


Dan Waylonis
Jackson Park
on Jul 22, 2020 at 2:35 pm
Dan Waylonis, Jackson Park
on Jul 22, 2020 at 2:35 pm
20 people like this

Not mentioned in the article is that the current sales tax is already 9%. So new sales tax is nearly 10%. Also not mentioned in the article are the growths of increased spending on pension and healthcare for public employees.

This is an issue that I will definitely be voting against.


Tina
Another Mountain View Neighborhood
on Jul 22, 2020 at 4:00 pm
Tina, Another Mountain View Neighborhood
on Jul 22, 2020 at 4:00 pm
15 people like this

Instead of raising taxes again, let's layoff 20% across the board in every agency of the city, county and state governments. Because of covid, we now know that some of jobs that have not been done the last few months, we can probably get by without. It's called spending within your means. Let's be prepared for the next disaster and have a real rainy day fund, that one cannot borrow from, like SS and the gas tax.


Ok
Sylvan Park
on Jul 22, 2020 at 4:25 pm
Ok, Sylvan Park
on Jul 22, 2020 at 4:25 pm
12 people like this

As usual, government is a bottomless pit that will never be satisfied by an amount of taxes it collects and will never learn to live within its means.


Robyn
another community
on Jul 23, 2020 at 7:31 am
Robyn, another community
on Jul 23, 2020 at 7:31 am
6 people like this

Cut the budget and remove the dead weight.
What about using the County's $8 billion investments?
Now is not the time to punish the citizens who have been out of work.


Bob
another community
on Jul 23, 2020 at 3:59 pm
Bob, another community
on Jul 23, 2020 at 3:59 pm
4 people like this

A few years back when we all experienced a slow down in the economy, I think they actually called it a recession, many cities reduced services and cut hours of operation. I think even some city police stations were not open to the public and if you had a traffic ticket to pay, you could do it over the phone or just submit your fines online. If city, county, state, and federal agencies used the technology that we already have developed, they could come up with ways to save millions of money but like the lazy elected officials, they just take the easy route and put everything on the backs of the workers. Raising taxes is so yesterday and shows the lack of creativity in too many elected officials. It's time to stop bleeding the citizens of your community and start doing your job. If you are not smart enough or creative and innovative enough, maybe you are not the right person to help out your community. People who make above $100K in the Bay Area and are still collecting their salaries will not feel another small tax burden but the workers who lost their job because of the Coronavirus and is struggling to put food on their tables and are having no luck in collecting their State Unemployment are the ones who feel the day-to-day stress of not being able to pay their rent and other monthly expenses. Have you not seen the long lines of Bay Area families waiting to get food from the organizations that are feeding the hungry in America?


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