In the end, 58.1 percent of voters were in favor of the measure, with 41.9 percent opposed.
Supporters had hoped revenue from the tax would offset $20 million in state cuts sustained by the colleges, allowing them to restore classes and labs for more than 10,000 students on wait lists this fall, supporters said.
Polling last spring indicated more than 70 percent backing for the measure, but a second poll two weeks ago indicated support had dwindled, proponents said.
Campaign chair Betsy Bechtel, a former Palo Alto mayor who now sits on the elected board of the Foothill-De Anza Community College District, noted that measures requiring a two-thirds majority went down across the county and state in Tuesday's election.
"We really do have strong support for our community colleges and will continue to work hard to keep them effectively providing services for the students," Bechtel said Thursday.
Foothill College has been the destination for 14 percent to 16 percent of the Gunn and Palo Alto high schools' graduating classes in recent years, according to the college.
Bechtel discounted press criticism of district salaries as being responsible for Measure E's failure to pass. The district has defended its faculty salaries — on the upper end but not the highest community college salaries in California — as necessary to attract and retain top talent.
At a campaign gathering at BJ's Restaurant and Brewhouse in Cupertino Tuesday night, students who had worked phone banks and gone door-to-door for Measure E said voters they spoke with generally supported Foothill and De Anza.
"Most people wanted to further young people's education and have it available for future high schoolers," De Anza student Vanessa Rosas said.
But the nation's anti-tax mood made it tough for Measure E, said Foothill student Etienne Bowie, who grew up in East Palo Alto.
"The word 'tax' is just toxic right now," Bowie said.
"I made 400 phone calls — maybe more. Most of the voters I talked to said 'Yes,' they supported it, but there were a lot of undecided people and they were scared of the word 'tax.'"
Bowie criticized the salary argument.
"The faculty makes the school," he said. "Our opponents used that (salary argument) very well against us."
De Anza student Arvind Ravichandran said, "We're going to miss this campaign. We had a routine, and it was a good opportunity to learn about civic duty."
Palo Altans were well-represented at the gathering of about 50 campaign volunteers. Besides Bechtel, Foothill-De Anza board Chair Bruce Swenson is also a Palo Alto resident, as were a number of campaign volunteers.