Santa Clara County leaders already face an uphill battle convincing voters to pay more taxes to keep their public hospitals afloat — but a fast-moving lawsuit and pushback from wealthier cities will steepen the climb.
A judge next Wednesday could decide the fate of the county’s proposed five-eighths cent sales tax increase, known as Measure A, after local libertarians filed a lawsuit challenging the legality of placing it on the Nov. 4 special election ballot. The lawsuit argues federal spending cuts — which county leaders warn could devastate California’s second largest public hospital system — don’t constitute an emergency allowing for a sales tax vote on a non-general election year.
If the measure moves forward, the lawsuit asks county elections officials be ordered to remove President Donald Trump’s name as a motivator of the tax measure — as well as phrases emphasizing the tax would save local hospitals from closing — from the ballot measure’s language.
“Measure A would provide no dedicated funding to health care, let alone hospitals,” the lawsuit reads, referring to the county proposal’s status as a “general tax.” A general tax requires a lower voter approval threshold than a “special tax,” which would limit spending of the new revenue to health care. County officials insist the money will go to the hospital system since it’s a bulk of their operating expenses.
Santa Clara County Libertarian Party Secretary Brian Holtz is the lead plaintiff on the lawsuit. He said he doesn’t expect the judge to block the measure completely, but hopes to compel county elections officials to change the ballot language.
“The thing that bugs me the most about this (measure) is completely legal — they put this, as so often happens, on an off-cycle election knowing it will be in front of voters more favorable to tax hikes and bond measures, as opposed to voters in a general election,” Holtz told San José Spotlight. “In a real democracy the voters are choosing the leaders, but in this case the leaders are choosing the voters.”
County Counsel Tony LoPresti said his agency has no qualms about its case.
“It’s no surprise that opponents are trying to prevent voters from weighing in,” LoPresti told San José Spotlight. “The board’s action was lawful, and we look forward to presenting the county’s arguments to the court.”
The measure also faces opposition from a mix of current and former local leaders who argue the tax will hurt poor people the hardest. At the same time, they represent affluent areas with residents who are more likely to seek private health care at Good Samaritan and Stanford hospitals — not the public hospitals sustaining the region’s poor and uninsured. Formal arguments against Measure A include signatures from Cupertino Mayor Liang-Fang Chao, former Monte Sereno Mayors Liz Lawler and Rowena Turner and former Palo Alto Mayor Lydia Kou.
Chao said low-income families spend more on taxable essentials while wealthier residents can offset costs through tax deductions and exemptions. She added Santa Clara County’s health system spending more than doubled in a decade — from $2.2 billion in 2015 to more than $6.1 billion in 2025.
“We need structural reform, not another sales tax,” Chao told San José Spotlight. “Los Angeles leases public hospital operations to experienced providers. San Francisco uses an independent health authority. San Diego repurposes underused hospital space into urgent care and specialty clinics.”
Rishi Kumar, a tech executive and former Saratoga councilmember running for county assessor, is another signatory on Measure A’s opposition. He handed out “Vote No on Measure A” slips — until he was asked to stop — at the county’s Aug. 16 town hall meeting about the impacts of federal spending cuts on local public hospitals. The county’s sales tax proposal is a direct result of those cuts, some of which will take effect this year, but bigger cuts are expected by 2027.
Kumar rejects the notion the sales tax debate splits along the lines of wealth and class. He said he agrees the federal cuts to Medicaid went too far, and also believes in the county’s public hospital system on paper.
“I will say the federal government’s cuts were a little bit too much,” Kumar told San José Spotlight. “I think it will cause upheaval all over the U.S., but at the same time the sales tax increase is highly regressive. People are very concerned this came up at the very last minute. Raising taxes should not be the first approach — it should be the last. As this progresses I think we’ll have a lot more leaders stepping up to speak against it.”
County officials say the tax isn’t their only strategy to make up for more than $1 billion in revenue losses under H.R. 1, President Donald Trump’s “big beautiful bill.” The county says it will have to make additional service and job cuts over the next few years to cover losses that will mostly come from federal reductions to Medicaid, the public health insurance program known as Medi-Cal in California. It’s the largest federal revenue source for the county health system of four hospitals and 15 health clinics.
Santa Clara County runs two of the region’s three trauma centers and the only regional burn center of its kind in the Bay Area. The county hospitals are Silicon Valley’s largest and most accessible health care provider and the only option for working-class and uninsured patients. One in four of the county’s nearly 2 million residents are Medi-Cal enrollees. Half of the county hospital system’s patients pay through Medi-Cal. The rest pay through a mix of other means and Medicare, a separate federal program serving patients 65 and older and patients of all ages with certain disabilities.
Proponents of Measure A say cuts won’t just affect uninsured people. Doctors have warned that reduced public hospital services will shift more of the burden toward emergency rooms, leading to increased emergency care wait times.
“Regardless of what part of the county you live in, we’re all going to feel significant impacts unless we can find a way to stop the bleeding,” Jeffrey Buchanan, director of policy and public affairs for community group Working Partnerships USA, told San José Spotlight.
District 4 Supervisor Susan Ellenberg said the impacts of H.R. 1 should be a priority for all elected officials in the valley.
“My priority is helping people understand the true impacts and threats of this bill that will impact all of us by reducing access to emergency trauma response and behavioral health care, which will overload our hospitals, destabilize more families and lead to more deaths,” she told San José Spotlight. “If we don’t get this immediate crisis under control, we won’t have the luxury of thinking about anything else.”
The three-month sprint to raise sales taxes could pit one of California’s most progressive county boards against the centrist San Jose Mayor Matt Mahan, who has cast doubt on the county’s hospital investments and declined to take a stance on the measure.
At the county town hall meeting, Congressmember and former San Jose Mayor Sam Liccardo revealed the city is negotiating with the county about its support for the tax measure in exchange for getting more county dollars toward San Jose’s interim homeless shelters. Mahan has publicly criticized the county for not spending more to address homelessness in San Jose.
Three of the county’s four hospitals are located in San Jose, including the county’s level I and II trauma centers.
Contact Brandon Pho at [email protected] or @brandonphooo on X.
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