A scramble to prevent cuts to Santa Clara County’s public hospitals has Silicon Valley business interests divided.
As county leaders — and now San Jose Mayor Matt Mahan — urge voters to approve a five-eighths cent sales tax hike to protect the region’s critical services from federal cuts, anti-tax business groups have looked to the San Jose Chamber of Commerce as a leading voice of opposition. Instead, the chamber has taken a “neutral” stance on a measure that would bring tax rates in some cities above 10%, after chamber officials described “compelling” arguments on both sides.
The move “astonished” a range of local business leaders and owners, according to a widely-circulated statement on Tuesday from Santa Clara County Republican Party Chair David Johnson.
“To stay silent on a regressive tax that will negatively impact the less fortunate — business people and residents alike — is a monumental dereliction of duty on the part of the Chamber,” Johnson said in the statement.
Joining the outcry is Tracey Enfantino, chair of the Silicon Valley Business PAC, a political fundraising group set up to support pro-business candidates for local office, including San Jose’s mayor.
“These businesses look to the Chamber to advocate for them — but today, the Chamber is not showing up. By ignoring more than 62,000 small and mid-sized businesses in San Jose alone, it has left them to fend for themselves,” Enfantino said in the statement.
The chamber board voted last month to remain neutral on Measure A — unable to choose between the dueling realities that complicated their decision, according to CEO Leah Toeniskoetter.
“We recognize that we are in an unprecedented moment across our country, and the repercussions of H.R. 1 created an untenable situation for our county,” Toeniskoetter told San José Spotlight. “At the same time, many small business owners and workers rely on our county health care system, while others are concerned about the impact of higher costs. By remaining neutral, we acknowledge these competing realities and uphold our role as a trusted forum where every voice in our economy is respected.”
Most recently on Thursday, the measure won a formal endorsement from one of the region’s largest business interests, the Silicon Valley Leadership Group. The organization called for business interests to have a seat on any oversight committee in charge of monitoring the spending of the new tax revenue. It also called for bi-annual public disclosures on spending.
Pat Waite, a board member and treasurer for the Silicon Valley Business Alliance, opposes Measure A. He said residents shouldn’t have to dig through their pockets to pay for the county’s choice to expand its hospital system last year. The county purchased Regional Medical Center to prevent the loss of trauma, heart attack and stroke care in East San Jose.
At the same time, Waite said he isn’t surprised by the chamber’s decision. He points to political disarray stemming from a 2020 racist political attack ad scandal under the organization’s old moniker, Silicon Valley Organization. The organization changed its name, pledged to stop endorsing political candidates and went through a major leadership change. Toenisketter was named CEO in 2023, replacing Derrick Seaver who came onboard in 2021.
“Leah Toenisketter has been working hard to regain trust and has been focused on trying to rebuild the organization as a forum for businesses to connect and be successful — and has been avoiding engaging politically,” Waite told San José Spotlight. “I think some day they may return to the political roots they used to have. But until the chamber feels comfortable helping businesses succeed at a fundamental level, not a political one, they’re going to shy away from the controversial.”
Bob Staedler, a local land use and development consultant, said there’s already a push to return the chamber to its political roots.
“I think (this decision) had to do with trying to thread the needle of the greater Santa Clara County politics that a lot of the board members live in — and operate in businesswise,” Staedler, principal of Silicon Valley Synergy, told San José Spotlight.
Staedler views Measure A more favorably and said the chamber should have taken a definitive stance.
“I think the chamber sitting on the sidelines is not leadership. You should either say that health care is important for the county or you should say that a sales tax is going to hurt businesses,” Staedler said. “I’m just surprised they came out neutral on it. It’s a bit of a cop out.”
The drama comes as the mayor of Santa Clara County’s largest city — who has ascended Silicon Valley’s ranks of power on a pro-business image — has come out in support of the measure. Initially, Mahan and a slate of local law enforcement leaders and prosecutors cast doubt about their stance on the measure.
Mahan, who has fundamentally differed with county leaders on homelessness solutions, spoke critically of the county’s investments into the public hospital system. Public safety unions, meanwhile, voiced concern the measure would solely help the hospitals while leaving the offices of sheriff and district attorney to fend off budget cuts on their own. But those qualms apparently subsided after conversations with county leaders.
“Were I in the mayor’s position I would feel compelled to support it too,” Waite said. “The biggest issue facing the city in the minds of residents is homelessness, and one of the biggest things that needs to happen is to get services that people need to get over addiction and off the streets. The county is responsible for that. And the mayor needs the county.”
Story updated Oct. 3 at 10:35 a.m. Original story published Oct. 2 at 2 p.m.
Contact Brandon Pho at [email protected] or @brandonphooo on X.
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