Our view: The highest sales tax rate for the poorest city in the county?

In May of 2013, Mayor Don Gage first introduced the idea of a “Quality of Life” bond measure for the November ballot. “It’s not for education, it’s not for police officers. It’s for capital improvements,” he told a Dispatch reporter.
Things have changed since then.
A half-percent general-purpose sales tax increase will come before voters on Nov. 4 and if it passes by a simple majority vote of 50 percent, plus one vote, it would raise Gilroy’s sales tax from 8.75 to 9.25—the highest in all of Santa Clara County.
That’s higher than Palo Alto and even San Francisco—and they’re both cities with lower unemployment rates and higher median incomes.
Gage has frequently said that Gilroy is the poorest city in the county. It leads us to wonder why the poorest city in the county should have the highest sales tax rate—and it’s only a general-purpose sales tax measure. Under state law, the City cannot specify what the revenue will actually fund. It’s only for a general purpose.
At the Aug. 4 meeting where the City Council voted 5-1 to put the measure on the ballot, Eric Howard, owner of Bruce’s Tire on Monterey Street, questioned where the revenue actually goes. The exchange was revealing.
“The money goes directly into the General Fund and does not have to be spent on anything you’re stating tonight, correct?” Howard asked. During the public hearing 14 people spoke in favor of the tax hike, saying it will help fight gangs, pay for more after-school programs and improve emergency response times.
“It can be spent for any general purpose,” City Administrator Tom Haglund said.
“So anything?” Howard asked again.
“Any general purpose,” Haglund reiterated.
As Howard pointed out then, the City moved forward with the measure because the consultants advised them to. It’s easier to pass.
If the City Council wanted to earmark tax revenue or put out a bond measure for specific projects, whether it’s hiring more police officers, creating more after-school programs or improving parks, it would need more than a simple majority vote. Per state law, a tax or bond measure earmarked for anything but a city’s general fund needs support from two-thirds of voters.
If the tax measure will truly increase the quality of life for residents and visitors alike, designate programs that it will benefit. Earmark funds for fixing the cracked streets and sidewalks, for improving downtown and maybe even fixing the timing of the street lights there—the frequent red lights are nothing but a deterrent. Most of all, the council should publicly commit to what the money will actually help support and bring people to the table.
That makes the most sense. It may be risky and voters may turn it down, but at least the City Council would have held itself accountable and fought to do the right thing. It might have seen sweeping approval.
“It sounds we’re considering a measure that’s the easiest one to pass-not because it’s the right thing to do,” Howard said at the meeting. And he’s right.
So far, the tax measure—from the first survey to actually placing the ballot language on the ballot—has cost the City more than $180,000. The Lew Edwards Group is under a $126,000 contract with the City, and it will cost $54,300 to actually place the measure before voters.
The firm was successful in helping California cities pass six of seven sales tax measures last year. To date, the firm has helped pass 95 percent of the measures they were paid to research and campaign for, according to Catherine Lew, the group’s president and CEO.
We were surprised to see people who live and work in other counties for public agencies speak out in favor of raising Gilroy’s sales tax during public comment at the Aug. 4 meeting. Of those 14 pro-tax speakers, nine served our city at one point or were employed by a public agency. A Monterey County emergency dispatcher spoke about how Gilroy’s emergency communications equipment is outdated, as did the executive director of the East Bay Regional Communication System and former fire chief in Alameda County.
Don’t let Gilroy become one of the many California cities to pass a general-purpose sales tax increase under the guise of increasing public safety. Police and fire protection already account for approximately 80 percent of Gilroy’s entire budget—including operating costs, equipment, salaries, benefits and overhead. Generally speaking, that’s where the City’s money goes.