After more than an hour of public comment Aug. 4, City Council approved putting a measure before voters that would increase the city’s sales tax by a half percent with a 5-1 vote. If approved by voters in November, Gilroy’s sales tax would jump from 8.75 to 9.25 percent and the city would have the highest sales tax in all of Santa Clara County.
Members of Gilroy’s commissions and committees as well as former public servants dominated the comment period during the Aug. 4 public hearing for the tax measure. Out of 14 speakers in its favor, nine served the City or were employed by a public agency, including a former planning commissioner and a Monterey County emergency dispatcher.
“This does not earmark any money for any program,” said Councilman Peter Arellano, the lone dissenting vote. “I am for taxes that will go towards schools, the library and higher education. But to just put it in the General Fund where City officials can spend it anywhere at anytime they want, I don’t think will do us any good.”
Mayor Don Gage suggested the measure last year as a way to specifically fund capital improvement projects like fixing the condemned buildings downtown and repairing streets and sidewalks. The sales tax increase would also help pay for police and fire services and equipment—which already account for approximately 80 percent of the City’s total expenditures. As a general-purpose sales tax measure, all potential revenue from the “Quality of Life” tax will stream directly into the City’s General Fund.
“(The revenue) can be used for any general purpose,” City Administrator Tom Haglund clarified.
Oakland-based consulting firm FM3 Research, under a contract with the City for $36,500, conducted a survey between Sept. 30 and Oct. 9 that gauged whether residents would be more receptive to a sales tax or bond measure—and asked them what they’d be willing to pay for. The results, gathered during telephone interviews with 400 Gilroy residents, showed that a majority—79 percent—either “agree” or “strongly agree” the City needs more money to bolster public safety, and 62 percent said they’d support a half-cent sales tax increase.
After the survey was conducted, FM3 Senior Vice President Curtis Below advised the council to pursue a sales tax measure—since it only needs a simple majority vote to pass. If the City wanted to outline specific projects in a sales tax measure, it would require ratification with a two-thirds majority vote and is therefore tougher to pass, he said.
“If you want to make a withdrawal, you have to make a deposit,” said Councilman Peter Leroe-Muñoz at the Aug. 4 meeting, voicing his support of the measure. “This is very much an investment in our city, and this is the vehicle—based on the survey—that the public wants.”
Explaining why he was against the measure, Arellano said there is no guarantee the estimated revenue of $7 million per year will pay for anything the community has asked for, including the expansion of after-school and City-led recreation programs.
On the other hand, a majority of the council expressed support for the measure and many said they would prefer to let the voters decide in November.
Gage painted a bleak fiscal picture at the meeting, saying the City is “hanging by a thread” financially and there is no money to fix problems that have plagued Gilroy for decades, like broken sidewalks and cracked, pothole-ridden streets.
“Without this kind of help, there’s no money for things like fixing the arts center and things like that,” Gage said. “If we don’t have the money, and there’s nothing in the checkbook to do (street repairs, expand the arts center, etc.), so don’t come and ask for it because it’s not going to be there.”
Owner and operator of Gilroy Nissan and Hyundai, Leonard Harrington, spoke in favor of the tax measure at the meeting.
“The things you’re proposing to do with this money need to be done. I think it will improve our quality of life here in Gilroy (and) I think it will be good for business,” Harrington said. “It always hurts when things cost more money, but we’re all going to get it back ten-fold.”
The owner of Bruce’s Tire on Monterey Street, Eric Howard, shared differing views about the potential tax increase.
“Cities have to be as competitive as they can against other cities as businesses have to be against other businesses and Gilroy is about to price itself out of the market,” Howard said.
