Santa Clara County's board of supervisors are looking into a sales tax measure to patch up a massive hole in the county's budget during the coronavirus pandemic, but it may not have enough support to even make it on the ballot.
County supervisors voted 3-2 Tuesday to consider next month a five-eighths percent (0.625%) sales tax for the November ballot. If passed, it would raise an estimated $250 million each year for the next five years, which proponents say will help the county respond to the COVID-19 public health crisis and stave off cuts to other vital services.
In a pitch for the tax measure, Supervisor Cindy Chavez said that the money will be invaluable for supporting low-income and minority communities that have been disproportionately impacted by the virus, particularly in East San Jose and the South County area. She acknowledged that a sales tax is not a perfect tool — it is regressive and burdens lower-income families — but said it would be a short, temporary source of money that doesn't depend on the shaky prospect of state or federal relief.
"This is such a historic crisis," Chavez said. "I am very concerned that without local response — without us taking our future into our own hands — that relying on the state or federal government to come and save us is just not a real thing."
But Supervisor Susan Ellenberg, who voted to at least consider the idea, said she had deep reservations about supporting a tax that burdens families dealing with unemployment, looming rent payments and food insecurity. And because it's a general use tax, there's no legal way to guarantee voters that the money will be spent specifically on COVID-19 relief efforts.
"The impact of a sales tax will be felt most acutely by those small businesses and struggling families and individuals that have been hit hardest by the pandemic. We are literally asking those who can least afford to do so to help us bail them out," she said.
The other wrinkle in the debate is that the county has only a tentative idea of what the current and future budgets under COVID-19 will be. Like most public agencies throughout the Bay Area, Santa Clara County is projecting a deficit, but the exact details are still hazy — the 2020-21 budget is still in flux, and county officials have only loosely referenced a $300 million budget hole.
It's unclear what the final size of the deficit will be, what programs are on the chopping block and what expenditures will be reimbursed by federal or state aid, making it hard for supervisors to weigh in on the tax measure.
"I just don't know how much we need," Ellenberg said.
Supervisor Joe Simitian said he was unwilling to back the sales tax, and said that it's difficult for him to come to voters asking for more money when the county's budget has grown so much in recent years, buoyed by a lengthy period of economic expansion in Silicon Valley. From the 2012-13 fiscal year to 2018-19, Simitian said the budget has grown by 84.3%, vastly outpacing population growth and inflation.
Not having the tax measure will likely trigger difficult budget cuts in the future, he said, but the alternative is putting the burden on low-income residents.
"This doesn't mitigate income inequality, it actually exacerbates it by taking more money out of the pockets of folks who can least afford it," Simitian said.
The 3-2 vote, with supervisors Simitian and Mike Wasserman opposed, means county staff will craft a framework for the sales tax measure for a final vote in the coming weeks. But it could very likely be dead on arrival, as a four-fifths vote of the board is required to put a general tax on the ballot.
Ellenberg said her support is contingent on whether the tax measure could be contracted to just two or three years, rather than five, and a better road map for how the money will be spent.
Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.