Supes Reject Joint Tax

Combined tax to fund county services and BART extension a no-go;
Decision may lead to competing measures in June
San Jose – Santa Clara County supervisors Tuesday rejected the notion of a combined sales tax to fund county services and a BART extension to San Jose.

Later this month, the supervisors will decide whether to place a quarter-cent or half-cent sales tax on the June ballot to help close the county’s $111-million budget gap and set up a sales tax showdown with the Santa Clara Valley Transportation Authority.

“This is one of the few options remaining to us to control our own destiny,” County Executive Pete Kutras said. “We are by no means pulling out of a deficit posture and threats loom on the horizon.”

The supervisors’ decision raises the possibility of competing countywide sales tax measures: a county tax to fund general services and a VTA tax to build the $4.7-billion BART project and other transit improvements. If both are successful, the local sales tax could jump from 8.25 percent to 9 percent. The state caps sales tax at 9.25 percent.

Supervisor Don Gage, who also sits on the VTA board, believes both measures will fail if they appear on the same ballot. He said he hasn’t decided to support a new county tax.

“I want to make sure that if we’re going to move forward we’re doing anything we can to straighten out areas that aren’t cost effective,” Gage said, mentioning the planning office in particular. “I’m not sure that’s happening yet.”

A new half-cent sales tax would raise about $164 million a year, and in theory, some of the money could be funneled to the Santa Clara Valley Transportation Authority.

“I think we have to,” Gage said. “They truly do need [funds] just for existing services.”

Polls taken last November found solid support for either a quarter- or half-cent sales tax to fund transportation, healthcare and other social services. About 60 percent of respondents said they would support either measure. A general county tax requires a simple majority. A VTA tax, earmarked for specific projects, requires a two-thirds majority.

In 1996, voters passed Measure A/B a 10-year sales tax split between the county and the VTA that expires in March. That measure funded numerous transportation projects, including improvements to highways 85 and 152.

County and VTA officials had discussed a second combined tax split between the agencies to improve the chances of each receiving new tax revenue and to lower the vote threshold needed to secure more funding for BART. But Santa Clara County Counsel Ann Ravel said such a tax would be vulnerable to a legal challenge because Proposition 218, also passed in 1996, tightened the rules on taxes earmarked for specific projects.

“We do think a court would look more carefully at [a combined tax],” Ravel said. “It’s our recommendation that a single measure would be much more defensible.”

Supervisor Liz Kniss, who represents North County cities and is opposed to a new tax for BART, said that it would be proper to use new county tax revenue for select transportation projects, especially once Measure A/B expires. Measure A, a half-cent tax to build BART approved in 2000, takes affect in April. That money will go to the VTA.

“It would have been very tempting to do an A/B type of measure,” Kniss said, “Though I believe the VTA has sufficient [funds]. The money will come to us, and we will make a decision on it. Will some of it go to transportation areas? I certainly hope so.”

The supervisors will vote on a tax Feb. 28. On March 2, the VTA board, where Kniss is also a member, will vote on a spending plan for its own proposed tax. 

That vote has been delayed four times since November while board members, divided over the projects that should receive priority funding, have tried to reach consensus. Polls financed by a lobbying group that strongly supports BART have shown that a VTA tax will fail, though those polls have not been released publicly. The lobbying group is currently conducting a third round of polling.

The deadline for measures to appear on the June ballot is March 10.

Tax Vote

– County Supervisors will hold a special meeting to discuss a proposed sales tax ballot measure.

– The meeting is at 6:30pm, Tuesday, Feb. 28, in the board chamber, 70 W. Hedding St., San Jose.