SAN JOSE -- With another status-quo budget ahead, San Jose leaders who are increasingly frustrated with the lack of city service improvements are eying a ballot measure to raise taxes.
Soon, potential voters will be getting phone calls from pollsters to ask them whether they'd vote to bump the sales tax up a quarter- or half-cent in San Jose, or increase the marijuana shop tax. If the response is encouraging, the proposal will likely hit the November ballot, and, if passed, could give the city enough cash for general services such as staffing up fire stations and extending library hours. Another option would send all the money toward something specific such as hiring cops or plugging potholes, but two-thirds of voters would need to be supportive.
The local economy may be humming, but city officials insist the extra tax money is being balanced out by the increased cost of city workers -- from rising pension costs to restoring pay hikes that were cut during the recession. As a result, the city's $1.1 billion general-fund budget approved by the City Council on Tuesday has San Jose lined up to essentially continue business as usual when the new fiscal year begins in July.
That's not good enough, some council members say. After a couple years of stable budgets, they're ready to test voters' support to pay more to restore the services they lost -- from laid-off cops to temporary fire station cuts -- during a decade of budget shortfalls.
On Tuesday they voted 7-4 to spend at least $50,000 to test support for a potential tax measure, and they'll decide in early August whether to place it before voters. The council also decided to scrap other potential money-raising measures that were seen as less likely to pass, including a potential new parcel tax.
A quarter-cent bump to the city's 8.75 percent sales tax rate would net the city another $34 million annually, while a half-cent increase would generate an extra $68 million. The big debate is over whether the money should go into the general pot of city funds, or if it should be earmarked for specific services, such as public safety or road repairs.
A special tax earmarking funds for specific purposes might generate a better response from voters but would need two-thirds approval from voters to pass. A general tax increase just needs a simple majority but isn't likely to make it onto the ballot without very strong poll results.
"I know there are at least several members of the council that won't support a general sales tax, and are interested in a special sales tax" directed at specific services, Mayor Chuck Reed said.
Vice Mayor Madison Nguyen noted she and fellow mayoral candidates on the council -- Sam Liccardo, Pierluigi Oliverio and Rose Herrera -- all spoke out against a general sales tax during their campaigns. All but Liccardo, though, were ousted in the June primary, and several of the mayoral hopefuls said they'd be open to a tax directed toward a specific popular service. Even the council's two Republicans, Johnny Khamis and Pete Constant, said they were willing to look at a special tax.
"Our roads are horrific," Khamis said.
Eight of the 11 council members must approve the measure for it to reach the ballot, and they are scheduled to vote Aug. 5 following a six-week recess.
Local business leaders last week pushed plans for a countywide tax measure to fund transportation improvements from this November to 2016, giving San Jose leaders more comfort Tuesday that their initiative would pass.
But convincing voters to increase their own taxes is risky, and San Jose is already one of the most expensive places in the country to live. The last poll on the plan to increase the city's sales tax, released in February, found 54 percent would likely support the measure, but only 31 percent would definitely back it.
Contact Mike Rosenberg at 408-920-5705. Follow him at Twitter.com/rosenbergmerc.