Proposed tax law threatens billions in San Jose funding

by Sonya Herrera | February 25, 2023

SAn Jose Spotlight masthead - black yellow and grey text on white field - 'SAN JOSE spotlight Your search for truth starts here.'The San Jose City Council will decide whether to oppose a state ballot initiative Tuesday, which officials say would hobble the city’s ability to provide basic services.

The initiative, dubbed the Taxpayer Protection and Government Accountability Act, would make it more difficult for state and local governments to pass new taxes and fees. If passed, local governments would require the approval of two-thirds of voters in order to enact new taxes.

The city manager’s office is recommending the council oppose the initiative, which will be put before voters next year.

“This initiative would cause unnecessary financial constraints and threaten billions of dollars of funding that the city spends on fire and emergency response, road infrastructure, parks, disaster preparedness, sanitation and many others,” the city memo states.

The initiative would also challenge the ease with which new taxes would pass at the state level. With this proposition, two-thirds of legislators in both the State Assembly and Senate, as well as a majority of voters, would have to approve any new tax. Currently, new taxes only require either two-thirds of the Assembly and Senate or the majority of voters to pass.

San Jose Mayor Matt Mahan said while he understands the desire to limit tax increases during an economic downturn, this initiative would further disrupt local communities’ ability to support basic functions like public safety.

“While now is not the time to raise taxes,” Mahan told San José Spotlight, “this measure would upset the necessary balance between these important priorities.”

Scott Myers-Lipton, professor of sociology at San Jose State University, said this is an attempt by California’s wealthy elite to shield themselves from having to pay higher taxes.

“With eight households controlling more wealth in Silicon Valley than five times the bottom 50% (of households), these people have an exorbitant amount of money to conceal,” Myers-Lipton told San José Spotlight, citing the Silicon Valley Pain Index. “Most Californians just want folks to pay their fair share of taxes, and the Taxpayer Protection and Government Accountability Act makes this impossible.”

Jon Coupal, president of the Howard Jarvis Taxpayers Association that is sponsoring the initiative, said it merely plugs important loopholes in Prop. 13—the state voter measure passed in 1978 that limited the ability of county governments to increase property taxes.

Coupal said elected officials who come out against the ballot initiative could come across as an “anti-Prop. 13 politician.”

“Prop. 13 is very popular in Santa Clara County and the areas around San Jose; it’s the one thing that people rely on that allows them to keep their homes,” Coupal told San José Spotlight.

Pierluigi Oliverio, board member of the Silicon Valley Taxpayers Association and a San Jose planning commissioner, said his organization has not yet taken a firm stance on the initiative. However, he said the transparency measures listed in the initiative—calling for each new tax proposal to note the duration of the tax, the estimated annual revenue from the tax and the specific use for that revenue—would be a welcome change.

“This provides voters information that is pertinent to their decision-making when they vote,” Oliverio told San José Spotlight.

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