In less than a month, Santa Clara County voters will decide if they want to levy an additional 0.625% sales tax to maintain the county medical system in the face of federal cuts (HB1). The Weekly submitted the following questions to Supervisor Susan Ellenberg, District 4. Below are the answers The Weekly received, and we present them verbatim
Sales taxes tend to disproportionately affect the lowest income earners, how would you make sure that some households are not feeling undue burden? Can the county levy a tax like a luxury tax that wouldn’t have the same regressive effect?
Unlike cities, county governments don’t have the authority to propose whatever taxes they like. Counties only have the authority specifically granted by the state, and the only current authority we have that extends countywide is for a sales tax. We could do a parcel tax or some other type of tax that only impacts unincorporated areas of the County but that would bring in minimal revenue.
Sales taxes are inherently regressive, but many basic necessities are not subject to the tax, including groceries, rent, childcare, healthcare and education. The loss of access to healthcare for people with very low incomes is far, far more regressive and the 5/8 cent will be more than made up for by keeping emergency room wait times reasonable, ambulance response times unchanged, and health care professionals employed to provide care to the very population who will theoretically be most impacted by the tax.
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In reality, the people who will pay the most in sales tax will be the wealthier ones who are making significant taxable purchases in luxury goods, cars or travel. Another way to look at this is that for every $1,000 of tax-eligible spending, the Measure A increase would mean an extra $6.
Won’t many of the federal health care spending cuts not go into effect until 2027? Why was it necessary to proceed with a Special Election, which costs about $10 million to administer, when the County could have waited for the primary election early next year?
The County assessor’s retirement halfway through his term and more than 120 days prior to the next regular election triggered a required special election, so the cost would have to be borne by the County regardless of whether we added a ballot measure. Being able to add a measure on this special election was an opportunity we didn’t want to miss for several reasons:
Collection of the tax won’t begin until April 1, 2026, when many provisions will have already been triggered.
Some cuts have already been made: Immediately after the passage of HR 1, the County lost over $40M in Medicaid provider tax dollars for our health system.
What do you expect the turnout for the election will be? Lower than the primary election next year?
Getting folks to the polls in an off-cycle election is always difficult. The fact that there are 3 items on this special ballot means there are multiple candidates and interest groups who are invested in driving turnout, so I am hopeful we’ll see a surge that matches a regular primary turnout at least.
Measure A would allow the Board of Supervisors to spend the increased sales tax revenues on anything (i.e., Measure A authorizes a “general tax” not a special purpose tax) yet most of the ads in support of Measure A focus on ER and other health expenditures. What percentage of the revenues will go to healthcare expenses. How can the Board of Supervisors guarantee that that percentage will go to those expenses?
The County is staring down a billion dollar budget hole as a result of the passage of HR 1. Those lost dollars have historically funded healthcare, food access, public health, and a slew of other safety net services. We aren’t in a position to detail specific percentages right now as there are still many unknowns, not the least of which is what may come as a result of the government shut down.
Providing healthcare to the indigent is a primary legal mandate so that is where we will put dollars first. To the extent we have to pull those dollars from the County general fund (local property taxes) rather than new (Measure A) revenue, services that are currently funded by the general fund, including expanded mental health and substance use disorder services, homelessness outreach, the offices of the district attorney and public defender, etc, will inevitably be contracted. We will do everything in our power to protect access to healthcare first.
The last time County budgets were so dramatically impacted was in 1978, when Prop 13 was passed, and revenue for higher education and local governments plummeted. The current situation was not brought about by mismanagement of funds or overinvestments in the health system: BUT FOR the unprecedented cuts to Medicaid, CalFresh, Public Health and other safety net services, including aid to Women and Children (WIC), older adults, and youth in the foster care system, the County would not be coming to the voters seeking new revenue.
And the sad reality is, even if Measure A is approved by the voters, that revenue will account for only about 1/3 of the deficit created by HR 1 ($330 million/year for 5 years) and we will still need to take significant and painful actions to contract services, potentially lay off employees, and eliminate some of the ways in which we have led over the past fifteen years to expand our work to serve more of our population with programs and services that are best practices, evidence based and have proven to be impactful. Nobody wants this – but Measure A will soften the blows.
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