Fight to stop anti-tax measure comes to Silicon Valley

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 [email protected] or @brandonphooo on X, formerly known as Twitter.