The County of Santa Clara
California

Board Referral
97996

Approve referral to Administration and County Counsel to bring back to the September 10, 2019 Board of Supervisors meeting actions relating to enabling the Board to place a five-eighths of one cent retail transactions (sales) and use tax for Santa Clara County on the ballot. (Chavez)

Information

Department:Supervisor Cindy Chavez (Supervisorial District Two)Sponsors:
Category:Board Referral

Body

REASONS FOR RECOMMENDATION

As noted in the May 8, 2018 off-agenda report to the Board from Greg Iturria, County Budget Director:

Much of what happens in Washington D.C. and Sacramento can

have long-lasting impacts to the County of Santa Clara in many ways,

especially when it comes to the federal and state budgets. The

County's budget relies heavily on federal and state funds - about

35 percent of the revenue is federal and federally-dependent - and

decisions made in Congress and the state Legislature will

significantly impact the County's ability to provide vital services to

residents.

Director Iturria further argued that the County of Santa Clara faces “major budget threats due to potential loss of revenue and cost shifts resulting from decisions made at higher levels of government.” His memorandum cautioned about the “significant uncertainty in connection with the federal and state government funding of County services” and he described “specific and categorical risks of potential federal and state funding and/or regulatory changes that pertain to the County.”

This analysis and information was provided at the request of the Board in the context of several months of discussions relating to a County sales tax continuation and possible augmentation. On July 3, 2018, the Board of Supervisors unanimously adopted a Resolution ordering and calling for a special election to continue the existing one-eighth of one cent Retail Transactions (Sales) and Use Tax, and consolidating the election with the statewide general election on November 6, 2018. This measure passed by 74.2% of the votes.

This referral is asking for the Administration and County Counsel to bring back to the Board actions for consideration relating to placing a five-eighths of one cent retail transactions (sales) and use tax for Santa Clara County on the ballot.

During the Fiscal Year 2018-2019 budget process and the Fiscal Year 2019-2020 budget process, the Administration cautioned the Board and the public about fiscal prudence and the importance of sustaining reserves. In May and July 2019, the County Executive, in particular, cautioned against starting new projects given the tapering in future County revenues.

This referral calls for a discussion and possible action at the September 10, 2019 Board meeting that would enable the Board to put on the November 3, 2020 ballot a general tax measure calling for a sales tax of five-eighths of one cent. This would generate an estimated $250 million in General Fund revenue annually, beginning in 2021. These additional funds could be prioritized for services in the

-         Health and hospital system,

-         Public safety and justice system,

-         Social services,

-         Childcare,

-         Climate change protection, and

-         Preservation of agricultural land.

 

BACKGROUND

On October 10, 2017, the Governor signed Senate Bill 703, which authorized the County of Santa Clara to propose additional sales tax rate increases of up to 0.625% that, when combined with other district sales taxes, would exceed the 2% statutory cap (totaling up to 9.875%, when combined with state taxes).

With the authority granted by SB703, the County could propose additional countywide sales and use tax for either general or special purposes, assuming the following conditions are met:

-         The County adopts an ordinance proposing the transactions and use tax by the applicable voting approval requirement;

-         The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by the voters voting on the ordinance pursuant to Article XIII C of the California Constitution; and

-         The transactions and use tax conforms to the Transactions and Use Tax Law (Part 1.6 Division 2 of the Revenue and Taxation Code (commencing with Section 7251)), other than Section 7251.1.

Voter approval of any new countywide sales tax measure would be required pursuant to the State Constitution, which requires a simple majority vote of all County voters if a tax is levied for general governmental purposes, a general tax, and a two-thirds vote for a tax that is levied for a specific purpose, a special tax.

 

Meeting History

Aug 13, 2019 9:30 AM Video Board of Supervisors Regular Meeting

Eleven individuals addressed the Board.

In response an inquiry by Vice President Chavez, James Williams, County Counsel, clarified that the referral requires three yes votes to pass, and an ordinance placing a general tax measure on the ballot requires four yes votes to pass.

RESULT:APPROVED [3 TO 1]
MOVER:Cindy Chavez, Vice President
SECONDER:Dave Cortese, Supervisor
AYES:Cindy Chavez, Dave Cortese, Susan Ellenberg
NAYS:Mike Wasserman
ABSTAIN:S. Joseph Simitian