A hotly-contested real property transfer tax was placed on the 2020 ballot by the San Jose City Council just weeks ago, but already the proposal — now dubbed Measure E — has received its first major financial contribution.
But the first publicly-reported donation, which will likely support mailers and other public advocacy for Measure E, wasn’t provided by a local affordable housing network, community organization or company based in San Jose.
According to campaign filings available on Tuesday, the whopping $25,000 donation was given to the campaign five days before Christmas by Salesforce chairman and founder Marc Benioff, a San Francisco-based tech mogul and billionaire, furrowing brows from critics of the potential tax who say it’s easy for a wealthy businessman to support a measure he will not be affected by.
“I think we’ve seen that a lot over the last several years. Tech companies — who have a workforce, but more importantly, all of their clients and customers that live in the city of San Jose — support taxes that they don’t have to pay,” said Pete Constant, vice president of the Silicon Valley Taxpayers Association.
Measure E set off a firestorm of quarrelsome council meetings where several councilmembers and taxpayers voiced concerns over tax burdening residents, especially as the potential tax would pool into the city’s general fund, which the City Council can use for any purpose — not just affordable housing.
During this intense months-long period, Mayor Sam Liccardo lobbied tirelessly to place the tax, which applies to the sale of all properties valued at $2 million or more, on the ballot in the hopes of using the funds generated from the tax for financing affordable housing projects.
Despite the backlash from opponents and critics, the mayor and his coalition of affordable housing advocates, council colleagues and community members won, securing a spot for Measure E on the ballot. But the mayor’s efforts didn’t stop there, as he also called for a spending plan and strong accountability measures by requiring a 60-day notice and a two-thirds council vote before lawmakers shift funding.
Now, with only two months before the election, the mayor’s efforts may be extending even further as he looks to solicit support from other sources, a move that is not uncommon for politicians–especially during an election year. In 2016, Liccardo and several councilmembers reported that they solicited nearly $1 million for their most important political causes. Under the city’s rules, every three months San Jose elected leaders need to report any amount they’ve solicited from outside sources for anything related to their elected posts such as city-sponsored events, funds for political candidates, campaigns or causes. State law, however, only requires reporting payments that exceed $5,000.
While it’s no secret nor contentious to solicit funds, it’s unclear whether the mayor has sought contributions for Measure E from donors like Benioff, since the city’s most recent filings have not been updated.
Former councilmember and current planning commissioner Pierluigi Oliverio pointed out that it’s not just politicians like the mayor who solicit contributions. Local housing advocacy groups and nonprofit organizations often ask wealthy and powerful business leaders for funds. First Community Housing, a nonprofit advocacy group, has also contributed $10,000 in funds for Measure E on Dec. 26, according to campaign filings, making the nonprofit the second contributor.
“Typically mayors do a lot of fundraising for citywide ballot measures, but also housing advocacy groups might solicit folks of that caliber to donate to campaigns,” Oliverio said. “If I remember correctly, other wealthy people from San Francisco have donated to political campaigns in San Jose.”
In recent years, for example, social media titan Mark Zuckerberg has donated millions toward funding housing and public education across the region, including in San Jose.
But Benioff has been known to be vocal about combating the region’s homelessness epidemic, even calling for higher taxes for wealthy billionaires like himself and demanding that other large tech companies, such as Facebook, be regulated or split up. For some, it’s not a surprise that the billionaire CEO would be donating personal funds toward a suitably “philanthropic” cause.
“It’s important to know that Silicon Valley has a history in being extraordinarily slow in philanthropy,” Larry Gerston, political science professor emeritus at San Jose State University, said. “But in the last ten to twelve years, largely with social media, the people who have been at the leadership have been much more community oriented.”
While Gerston doesn’t think rich tech titans like Benioff will “turn over their fortunes” for philanthropic causes, he said tech leaders have increasingly donated funds for causes they support with no direct personal gain in it for them.
“There’s a certain leadership element here — something that relates to community and the greater good,” Gerston added. “Now that doesn’t mean that these guys are about to turn over their fortunes, but I think it does suggest that there are issues that go beyond their own immediate potential gain.”
Still, some critics like Constant, who is a former San Jose councilmember who now lives in the Sacramento area, aren’t convinced.
“Quite frankly if I had the net worth of the CEO of Salesforce, then I wouldn’t care about a small tax like this — small in proportion to his net worth, but large in proportion to the net worth of tens of thousands of people trying to buy their first home,” Constant said. “Taxes like this, particularly aimed at housing transactions, are probably the most counterproductive taxes that you could have in an area that’s already challenged by exorbitantly high real estate prices and an affordability index that is off the charts.”
The primary election, where voters will decide on Measure E, is March 3, 2020.