Santa Clara County officials are preparing to ask voters for higher taxes to protect their poorest public hospital patients from devastating federal revenue cuts.
The Board of Supervisors is expected to hold a special meeting around Aug. 7 to consider putting a five-eighths cent sales tax increase proposal before voters, according to county officials who requested anonymity to speak freely. The county’s sales tax rate is 9.125%.
County sources said they’re aiming to meet the Aug. 8 deadline to get the ballot question consolidated with the Nov. 4 special election to replace former Assessor Larry Stone, who stepped down in July. Sources confirmed Valley Health Foundation, the private nonprofit set up to raise money and lobby for the county health system, has started fundraising for the ballot campaign as the county faces a short runway to November. Sources say the foundation has received at least $1 million in pledges in just the last few days for a forthcoming campaign committee.
Residents have also reported being polled on their position for a tax measure. County officials said they’re aware of the poll, but denied paying for it.
The county is specifically looking to propose a general sales tax, which sources said requires a simple majority to pass. While a special sales tax could better protect hospital funds from a future board of supervisors with different priorities, it requires a higher threshold of two-thirds approval to pass.
“H.R. 1 has cut a seismic tear into our social safety net – especially our public hospital and health care system,” County Executive James Williams told San José Spotlight. “The county is facing more than a $1 billion budget shortfall, putting at risk critical care that keeps our community healthy and safe. Together, we must pursue all solutions to support the services and life-saving care that everyone in our community relies on.”
Sources said the tax measure would make a meaningful difference if approved, but still wouldn’t solve the county’s biggest fiscal crisis since Proposition 13’s limits on property taxes. Officials anticipate losing more than $1 billion in revenue over the next few years after President Donald Trump’s Fourth of July signing of H.R. 1, his watershed “big beautiful bill” that makes heavy cuts to the nation’s most critical social safety net programs. The county’s losses will mostly come from federal cuts to Medicaid, the public health insurance program known as Medi-Cal in California, which is the largest federal revenue source for the county health system of four hospitals and 15 health clinics.
Heath care after Medi-Cal cuts
Santa Clara County runs two of the region’s three trauma centers and the only burn center in the Bay Area. The county hospitals are Silicon Valley’s largest and most accessible health care provider and the only option for working-class, uninsured patients. One in four of the county’s nearly 2 million residents are Medi-Cal enrollees. Half of the county hospital system’s patients pay through Medi-Cal. The rest pay through a mix of other means and Medicare, a separate federal program serving patients 65 and older and patients of all ages with certain disabilities.
Community health and patient advocates are welcoming the idea, arguing the county should look at every option available to keep the hospital system robust. Jeffrey Buchanan, director of policy and public affairs for the community group Working Partnerships USA, said public hospital cuts won’t just impact county hospital patients.
“It’s going to impact the quality of care for everyone, whether you’re on Medi-Cal or not,” Buchanan told San José Spotlight. “If people are no longer able to access primary care or no longer have access to our health clinics, they may be left all of a sudden with no choice but to head to the emergency room — and what happens to the care of our loved ones who have a higher-level emergency need as doctors are triaging through folks?”
But the health care system is also the county’s largest budget strain — inextricable from the county organization itself. A majority of county workers are health system employees, and it costs roughly 30% of the county’s $14 billion budget to run the hospitals and clinics.
Silicon Valley Taxpayers Association President Mark Hinkle said he will argue against the measure.
“Sales taxes are regressive taxes — the poor get hit hardest,” Hinkle told San José Spotlight. “Every time they make a purchase they’re going to be taxed. Those who care about the poor and downtrodden should be on our side.”
A Valley Medical Center doctor in the hospital’s maternity ward. Image courtesy of Santa Clara Valley Healthcare YouTube channel.
The proposed tax could open the door for debate over the county’s obligation to the health of its residents, Hinkle said.
“Is it appropriate for the government to be involved in the medical field at all? No, it is not,” Hinkle said. “They do not have the incentive to cut costs or be more efficient. My philosophical overview is government does not solve problems — they perpetuate problems.”
The county’s hospital costs, driven mostly by payroll and supplies, routinely outpace revenue by hundreds of millions of dollars. That requires the county to make up the difference every year out of its general fund, the county’s largest discretionary fund fed by taxpayer dollars. In the last fiscal year, the county had to come in with nearly $600 million in taxpayer money. This investment allows the county system to provide services beyond those offered through a traditional health care system, such as the Child Advocacy Center, a sexual assault forensic examiner, the Valley Homeless Health Care Program and the Saludos Clinic migrant farmworker health program.
The county received nearly $2 billion in federal Medi-Cal funding this fiscal year. The announcement of anticipated cuts comes just months after a period of elation, when supervisors approved the purchase of Regional Medical Center in East San Jose, restored services and expanded the hospital system in April.
The county hospital system includes a level 1 trauma and burn center that would otherwise not be available to residents in the county or Bay Area during emergencies. The burn center is one of only three regional centers of its kind between Los Angeles and the Oregon border, according to county leaders.
Darcie Green, an advocate for uninsured patients and director of Latinas Contra Cancer, said public health care benefits those who don’t rely on it.
“When our public hospitals are underfunded, everyone suffers. ER waits get longer, costs go up and care gets delayed for everyone regardless of where you get your care,” she told San José Spotlight. “We all have a stake in saving our public hospitals. It’s imperative that our entire community support the board of supervisors in exploring a sales tax and join community leaders in building a campaign to win in November.”
Contact Brandon Pho at [email protected] or @brandonphooo on X.