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February 24, 2021

Selling a tax increase to voters

Gilroy School Board trustees, encouraged by a recent survey that found more than 50 percent of 501 likely November 2012 Gilroy voters would “strongly support a city sales tax for local schools,” are poised to put the ball in City Council’s court.

It’s unclear whether GUSD’s last-resort strategy to mitigate a possible $8.1 million state cut to Gilroy schools will make the November ballot, however. Placing a joint city-school sales tax before Gilroyans needs four “yes” votes from the seven-member City Council.

So far, Council Members Peter Arellano and Perry Woodward are on board. Dion Bracco and Bob Dillon are opposed, Cat Tucker is on the fence but will “keep an open mind,” and Peter Leroe-Muñoz said “this is something I’m going to very strongly consider supporting.”

Mayor Al Pinheiro did not return multiple calls and emails by press time.

Whether Gilroy’s two governing bodies find common ground by the Aug. 10 deadline to place a one-half cent tax measure on the November ballot remains to be seen.

In the meantime, GUSD trustees like Jaime Rosso are gearing for the charge.

“This is breaking new ground for our city,” he said, during the regular Board of Education meeting Thursday night. “This is a changing world … we have to put our heads together and think outside the box.”

Armed with statistics that show overall support for a joint city-school sales tax remains over 50 percent, according to San Francisco-based consulting firm TBWB Strategies, the school board will draft and present to City Council an official resolution regarding the placement of a local sales tax measure on the November 2012 ballot.

No vote was taken during Thursday’s meeting, although trustees Tom Bundros, Rhoda Bress, Jaime Rosso, Mark Good and Dom Payne expressed unanimous support and agreement (save for trustees Fred Tovar and Pat Midtgaard, who were absent) to pursue a one-half cent sales tax measure that would generate about $5.6 million annually for eight years.

At least two City Council members say it’s a no-go for them.

In addition to Councilman Bob Dillon, who maintains his dogged stance against raising Gilroy’s already “far too high” 8.25 percent sales tax, Councilman and 2012 mayoral candidate Dion Bracco asserts “raising taxes every time you have a problem isn’t the answer.”

The fact GUSD approved a 5 percent pay cut for teachers via 10 furlough days next year doesn’t elicit much sympathy from Bracco.

“Our (city) employees took a 10 percent pay cut when we were hurting,” he countered. “That’s what it takes.”

Rather than a “specific use” sales tax (which would be guaranteed to the district, serve a pre-determined purpose and require a two-thirds, or 66.7 percent vote), GUSD is leaning toward a sales tax for “general use.” This type of measure only requires a 50 percent plus one majority vote, but offers no legal guarantee of what the money will be used for.

This is just one of Bracco’s concerns. Since a “general use” sales tax will not provide that the money be funneled directly into GUSD coffers, newly elected City Council members “could say, ‘we’ll keep it all,’” Bracco cautioned. “That scares me.”

Rosso says this is a reality GUSD is “OK” with.

“It’s the city’s choice to make, not ours. They’re well within their rights to change how the money is spent,” he said. “Hopefully we have a partnership and a certain amount of trust that needs to happen between our jurisdictions. We’re counting on the good will of the council.”

When asked whether the city should take a cut of the tax revenues, Councilman and 2012 mayoral candidate Peter Arellano – who would “definitely” vote to put the measure on the ballot – said the city should take a small percentage.

“Obviously, we have some needs,” he said. “But I would say the majority should go to the schools and see how much is left over for the city and their goals.”

He mentioned services that would be ancillary to GUSD and its students, such as making streets and intersections safer or improving city services to low-income neighborhoods.

“Together, it’s a win-win situation,” he speculated.

If the tax were placed on the ballot and passed, Dillon thinks all the money (minus the cost of administration) should go to the district – although he’s not sure if the city is legally obligated to retain a portion of the funds.

If this turns out to be the scenario, Dillon would look at using the money to fix sidewalks.

Councilman Perry Woodward expressed sentiments similar to Arellano’s. He acknowledged the “immense financial trouble” of California schools, which imposes long-term consequences on economic development and property values.

Woodward will vote “yes” to put the measure before voters, so long as GUSD covers the expenses of placing the measure on the ballot and the ongoing costs of administering the tax.

So far, a parcel tax feasibility study and telephone survey through TBWB have cost GUSD $41,890.

Regardless of the 55 percent of Gilroy voters who would vote “yes” or “lean” toward yes on a sales tax, according to TBWB, Bracco is skeptical of the results.

After talking to “a lot of people in passing” about the GUSD’s hoped-for measure, “I haven’t found anybody that would favor it,” he countered.

He’s also wary of driving away potential out-of-town shoppers.

In the case of auto dealers, for example, a higher sales tax means the dealer is “either going to have to eat it to compete with another city, or the customer is going to go elsewhere,” Bracco rationed.

Councilman Dillon, similarly, is guarded against “burdensome” taxes that would “dampen our sales of large-ticket items.”

Dillon added that TBWB’s voter survey “means little to me. Polling firms know who they work for.”

The voter survey was offered in English and Spanish and facilitated June 5 through June 11 by TBWB, which partnered with EMC Research, Inc. to conduct the actual polling.

EMC Principal Ruth Bernstein noted during her presentation Thursday that in order “to be fair and give both sides of the story,” voters were presented with several opposition messages, such as the concern that the tax revenue will go toward “bloated” government salaries and pensions.

Still, “we feel very confident that majority support for a measure like this is very, very doable,” she said.

Following the survey results presentation, the Gilroy Teachers Association Executive Board released for the first time its official stance on the possible sales tax. The GTA supports “any effort by the district to increase revenues to enhance the educational program in GUSD,” and hopes the public will also “stand behind efforts to maintain GUSD’s financial stability.”

Important upcoming meetings include a joint city-school meeting July 17, followed by a regular school board meeting July 19.

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