Gilroy
– Desperate to find new sources of revenue, county officials are
considering asking voters to approve a five-year sales tax increase
to fund transportation projects and social services.
Gilroy – Desperate to find new sources of revenue, county officials are considering asking voters to approve a five-year sales tax increase to fund transportation projects and social services.
Tuesday, the Santa Clara County Board of Supervisors gave County Executive Pete Kutras permission to poll voters to gauge support for a potential quarter-cent or half-cent sales tax measure that could appear on a ballot in 2006.
In 2004, a similar proposal was tabled by the board, and though future deficits are projected to be smaller than the $126 million for the fiscal year beginning July 1, Kutras said new revenue is critical because his staff has run out of ways to cut the budget without cutting services.
“We’re not going to get any help from the state or federal government,” Kutras said. “We’re either going to have to dramatically [reduce services], or have a sales tax for local services.”
Kutras has estimated that a half-cent tax would raise about $164 million a year, which would be spread among the county, cities and the Santa Clara Valley Transportation Authority, which is planning to place its own sales-tax measure on next year’s ballot. Were a measure to succeed, Gilroy could receive anywhere from $925,000 to $1.5 million in the first year of a higher sales tax.
Supervisor Don Gage approved the polling Tuesday but later said he doesn’t expect a sales tax measure to receive much public support unless the economy improves substantially.
“I think it’s going to be a tough sell, but it just depends on people’s commitment to social services and transportation issues,” Gage said. “It’s got to be a multi-faceted tax. If you want to get a countywide vote, you’ve got to have something in there for everyone.”
Polls taken earlier this year to test support for quarter-cent and half-cent tax measures to fund the VTA showed neither measure receiving a two-thirds majority, but the county measure may divert as much as 40 percent of its additional sales tax revenue to the VTA.
Deputy County Executive Jane Decker said the polls will measure support for a variety of county services, and help determine the scope of the potential ballot measure.
“What we’re trying to find out is what services they would support a revenue measure to fund,” Decker said. “We want to see what people think is important to and at what level they would be potentially willing to support increased taxes.”
The poll results are especially important because different tax measures require different levels of support. A broad measure to fund general county services would require a majority of 50 percent plus one vote. A narrowly focused measure to support just health services or transportation would require a two-thirds majority.
It’s possible that the VTA and county measures will appear on the same ballot, but both agencies will not be able to raise the sales tax by a half-cent even if voters were to approve both. County sales tax is currently 8.25 percent. State law caps the tax at 9 percent.
Decker said county officials have had informal discussions with the VTA, but haven’t yet considered how to contend with the 9 percent cap.
“That’s an interesting question,” she said of both measures passing. “I think everyone is cognizant of that so I don’t know that there will be two competing half-cent measures.”
The county’s proposal comes in what has been a parade of tax measures in the county this year. In addition to the VTA, the county’s homeless collaborative is considering polling to gauge support for a tax increase to house the chronically homeless, the library system just passed a $33.66 annual parcel tax, and the vector control district is asking land owners for $8.36 a year to fight pests and West Nile Virus.
Gilroy anti-tax advocate Mark Zappa said he hopes county residents are growing weary of the proposals.
“I’m not sure what the future holds, if people’s backs will be broken by taxes, but there’s going to be an endless supply of people seeking to tax people,” Zappa said. “One big tax is unpalatable to people, but by separating them out they’re able to push them through because people aren’t adding these things up in their heads.”
The county will conduct its polling in the next two months at a cost of $25,000 to $50,000, depending on the sample size. It could cost the county as much as $1 million to conduct a special election.
