BY BRADEN CARTWRIGHT
Daily Post Staff Writer
The Santa Clara County Board of Supervisors voted yesterday (Aug. 7) to put a 5/8-cent sales tax on the ballot to fund four hospitals that have been running in the red for years and now are facing additional cuts from the federal government.
The tax increase proposal was kept from the public until it appears on a meeting agenda published on Wednesday. Yesterday was the first time the supervisors discussed the measure, though they approved it at the same meeting.
County Executive James Williams said Santa Clara County is anticipating budget shortfalls of more than $1 billion due to President Trump’s “Big Beautiful Bill,” which made cuts and changes to Medicaid, known as Medi-Cal in California.
“The magnitude here is extraordinary, and it’s going to call upon this county organization to do extraordinary things,” Williams said at yesterday’s hearing.
Williams said the tax would raise about $330 million per year, and the unty will also make cuts and work with the state to get funding to close its budget deficit.
The tax would last for five years, if it’s approved by more than half of voters on Nov. 4. The measure is going on the ballot alongside a special election to replace Assessor Larry Stone, who is retiring.
Supervisor Margaret Abe-Koga, who represents northern Santa Clara County including Palo Alto, was the most skeptical of the tax measure, though she voted along with her colleagues to put it on the ballot. Abe-Koga said her district has only one of the county’s 15 clinics and none of its four hospitals.
Abe-Koga said she’s worried that cities in her district won’t be able to fund their own operations, and that voters will ask what’s in it for them.
“My residents have needs too, and I’d really like to have stronger recognition of that,” she said.
North County concerns
Abe-Koga said her constituents are worried about homelessness, public safety and climate change.
Abe-Koga said she wants to change the county’s reserve policy to save more money for catastrophes.
“We can’t do business as usual,” she said. “The silver lining I have seen (is) we’re forced to be better and change our ways.”
Supervisor Susan Ellenberg said the cuts to federal funding will affect all residents, not just those on Medi-Cal.
Residents still end up in emergency rooms even when they lose insurance, driving up medical debt, said Ellenberg. To compensate for those who can’t pay, health care providers to raise prices for those with private commercial insurance, Ellenberg said.
“The result could well be higher premiums, increased costs and fewer resources for everyone,” Ellenberg said.
At yesterday’s meeting, 29 people commented on the proposal, mostly nonprofit leaders and health care workers in favor of a tax.
“The medical community is reeling at the devastating health care costs that are headed our way and the possibility of having to choose who lives and who dies based on a lack of resources,” said Dr. Praveen Anchala, a radiologist at the county-owned Santa Clara Valley Medical Center.
“We’ll be activating our membership and contributing our financial resources to make sure we push this measure over the line,” said Kyra Kazantzis, CEO of the Silicon Valley Council of Nonprofits.
Only Pacifica resident Dan Stegink spoke against the tax because he said the county could use the revenue for anything, not just healthcare. That’s because the supervisors opted to go with a general tax, which only needs majority approval and isn’t designated for any particular purpose. If the tax were specifically for health care, it would require a two-thirds approval.
Public participation minimized
Former Saratoga Mayor Stan Bogosian criticized supervisors for scheduling their meeting in the middle of the day when people are working.
“This is not public participation,” he said.
The revenue would fund Santa Clara Valley Medical Center, O’Connor Hospital and Regional Medical Center in San Jose and St. Louise Regional Hospital in Gilroy.
The county purchased O’Connor Hospital and St. Louise Regional Hospital in 2019 after they went bankrupt and took over the Regional Medical Center in East San Jose in April after the for-profit operator closed the trauma center. These hospitals have the only burn trauma center between Los Angeles and the Oregon border and the only 24-hour locked psychiatric emergency facility in Santa Clara County, Williams said.
Regressive tax
Supervisor Otto Lee acknowledged yesterday that a sales tax is regressive, disproportionately affecting lower-income residents. But Santa Clara County is limited by law from enacting different kinds of taxes, like a real estate transfer tax, a hotel tax or a business tax, he said.
State Sen. Dave Cortese, a former county supervisor, passed a bill in 2023 that gave Santa Clara County temporary authority to pass a 5/8-cent sales tax.
The sales tax in Santa Clara County is currently 7.25% from the state and 1.875% from the county. Adding the 0.625% tax would bring the tax rate to 9.75%. Ballots will go out on Oct. 6, and if approved, the tax would take effect on April 1.
The temporary authority you speak of is to pass a 5/8-cent sales tax not subject to the general 2% limit on local government. Thus the county isn’t stepping in the way of any city or district. The county already had authority to pass a 5/8-cent sales tax when Cindy Chavez advocated for it in 2019.
What’s amazing is it’s only for 5 years. They could’ve tried 25 years or permanent. Perhaps those would’ve been inconsistent with the board’s finding of “emergency”.
What will they do to replace it in 5 years? It’ll be a ticking time bomb.
The employee unions can’t wait for the staggering pay raises this tax will give them. The supervisors, like Margaret Abe-Whatever, was elected with union cash and union help. Her only talent is transferring money from the working class to the lazy poor who object to getting a job. Let’s make it easier for freeloaders to get everything free.
If the county had been living within its means for the past few years, this tax increase wouldn’t be necessary. But they need this money because they’ve been running $650 million deficits year after year. Instead of wisely spending our money, they ran up a big debt on their credit card, and now they want us to bail them out.
Stop raising taxes for the working class, everyone should work and buy their insurance
“[Supervisor] Abe-Koga said she wants to change the county’s reserve policy to save more money for catastrophes.”
The trouble with this idea is that the county’s CalPERS plans are only 2/3 funded. Agencies with an unfunded liability have to pay CalPERS its expected rate of return, currently 6.8%, on that amount. If the county accumulated any savings, it would probably wind up invested at lower rates. In other words, why buy Treasury notes and CDs at 4.5% when prepaying CalPERS would save 6.8%?