Santa Clara County’s effort to tax residents to pay for COVID-19 relief measures failed after a short debate Tuesday.
County leaders proposed two options for asking voters in November to approve a 5/8-cent sales tax to help close the county’s estimated $300 to $600 million budget deficit. The county has spent $165.4 million so far on its COVID-19 response, officials said.
The first option — which required a “yes” vote from four of the five Board of Supervisors — was a general sales tax for five years. The second option, which would also tax residents for five years, was a special tax allocated for specific purposes. A special tax is harder to pass at the ballot box because it requires a two-thirds vote from the public.
But on Tuesday, supervisors failed to garner enough support for the general tax. Board President Cindy Chavez and Supervisors Susan Ellenberg and Dave Cortese voted in favor, while Supervisors Joe Simitian and Mike Wasserman opposed.
Ellenberg initially had expressed concern with the tax measure last month, but shifted her stance Tuesday.
Simitian said a general sales tax hike is regressive and it’s uncertain how the money will be spent. He said the county’s budget has ballooned 84% in the past seven years, indicating out-of-control spending as it continues to ask residents to pay more.
“It’s important that folks understand that there is no guarantee that any of those funds in a general tax would ever be used to benefit the purposes that people spoke to,” Simitian said. “That’s the nature of a general tax, for better or for worse.”
Wasserman said the tax would further burden struggling residents, adding it would make Santa Clara County the highest-taxed county in the state. “The idea of adding more to the cost-of-living in Santa Clara County is not something I want to support,” he said.
After the failure of general sales tax, Chavez killed the vote on the special tax citing concerns about garnering two-third support from voters.
Chavez criticized the board for supporting a tax to keep Caltrain alive — which has a majority of riders who earn more than $100,000 a year, she said — while failing to help poor people and people of color struggling amid the pandemic.
“The people who rebound the least are the communities who need us the most,” Chavez said. “… I’d like to head off as much of the suffering as we possibly can… I don’t think the cavalry is coming. I think we are the cavalry.”
Many spoke in favor of letting voters decide if they should tax themselves to help patch up the deficit.
“I don’t really like sales taxes, but we don’t have a lot of choices,” said Steve Eckert, CEO of the Alum Rock Counseling Center. “These extraordinary times cause us to consider every measure possible…. right now, we can’t afford to take any revenue options off the table.”
County Executive Jeff Smith warned supervisors that layoffs are on the horizon without an additional revenue stream.
“We’re fronting a lot of these (COVID-19) costs with general fund revenue,” Smith said.
Despite the failed general tax measure, Cortese made a last-minute effort to revive talks for the special tax to no avail.
“I feel like we need to do something because we know what’s coming,” Cortese said. “What’s being put out there in terms of the time limitation is very reasonable. I think the public would want the opportunity to do something about (the recession) themselves.”