Idea to Increase Sales Tax Abandoned

Polling done in July indicates voters aren’t especially interested in raising taxes until the city negotiates true pension reform, which is why the City Council decided on Tuesday to delay any action on revenue ballot measures.

Questions put forward to 1,206 voters in San Jose from July 13-19 asked about quarter-cent and half-cent sales tax increases, which could go toward the general fund by simple majority approval or to public safety services by two-thirds approval. The poll, conducted by Fairbank, Maslin, Maullin, Metz and Associates, found that 57 percent of voters would consider approving a quarter-cent sales tax, with only 31 percent firmly supporting the idea.

The margin of error for the survey was 2.8 percent.

While results for a quarter-cent sales tax increase appear to be on the right side of the ledger for majority approval, Mayor Chuck Reed and other councilmembers said that support would likely erode through opposing campaign efforts. They did say that November 2012 might be a better time to approach voters about a sales tax increase.

Despite signing a state budget on time, Gov. Jerry Brown was unable to garner enough Republican support for a special election to extend a one-cent sales tax increase that was approved by the Legislature in 2009. The current sales tax in San Jose is 8.25 percent.

Reed has been pushing to declare a fiscal emergency since May, which he has said would pave the way for pension reform ballot measures. His attempts have been repeatedly delayed. The city is currently negotiating retirement benefits reform with its unions through October while also discussing pension reform ballot measures for March 2012.

City officials have estimated that San Jose will experience a budget shortfall of $78 million for the 2012-13 fiscal year, which would be the 11th straight year San Jose has been outspending its revenue. The mayor has said the city cannot afford to cut back services any further after eliminating hundreds of positions in June, laying off police officers for the first time in the city’s history and cutting back hours for libraries and community centers.

Josh Koehn is a former managing editor for San Jose Inside and Metro Silicon Valley.

27 Comments

  1. Ahh, the world’s smallest violin is playing again.  I won’t shed any tears for Reed and his gang of thieves.  They could have given some thought to proposing changes to the city charter and municipal code to permit redirection of future funding away from the special and capital budgets towards the general fund. 

    Likewise, I’ll bet that repaving roadways, given the substantive additional life, could be folded under and charged to the capital fund.  But no, it appears that Reed and his gang are too busy to look into solutions more creative than simply raising our taxes.

  2. It is difficult to see how the writer of this piece came to his opening conclusion that “voters aren’t especially interested in raising taxes until the city negotiates true pension reform.”

    The poll to which this statement refers found that 53% of respondents said pension reform was either less likely to persuade them to support a tax or would make no difference in their support for a tax.

  3. Josh Koehn may or may not have drawn accurate conclusions from the polling results. I dunno. It’s a subjective call.
    Regardless of how anybody else feels about it, I for one would be happy to pony up for a sales tax increase if, in return, public employees were required to personally and individually fund their own retirements.
    I can always avoid sales tax by buying less stuff if I so choose, but how often do I ever get a chance to opt out of the burden of funding this immoral ponzi scheme eupemistically known as the ‘Public Employee Pension Program’.
    Half a percent tax in return for being free of this unfair obligation which I only have to endure because of the power and political influence exerted by public employee unions? If only I were ever truly presented with this clear choice. How might I react? This is how:
    “Hell yeah! Bring it on! Where do I sign?”

      • I doubt the Labor Council would let people vote on the retirement topic.

        A ballot measure transitioning the public pension system to a 401(k) would pass with a huge majority…even with all the gov’t employees voting.

        • “…even with all the gov’t employees voting”  Hell yes.  There are fewer than 6000 of them right now, and because of those 6000 or so, the rest of have to be denied basic public services, like a full complement of cops and decent roads.

        • I inquired of the Mayor and city council members’ offices who had input on the poll because surely the city would never seek input from Labor. Sure enough—labor was not invited to provide input on the poll—only business organizations and the city. Labor had nothing to do with the questions or their biased framing.

      • Yes I’m almost always ‘in the minority’ which might not be a bad thing in a city populated primarily by sheep. The ovine lifestyle holds little appeal for me.

        But I do see what you mean about the author’s conclusion. Reporters are assumed to be intelligent and objective since they have college degrees in journalism. The trusting, docile sheople generally are unaware of the rampant level of logical inconsistency and editorializing that comprises the bulk of most ‘news’ articles.

      • > That’s not a subjective call, it is the answer to a direct question on the poll.

        Oh, sure!

        Except . . . polls are largely subjective exercises.

        If you don’t believe me, ask President Dewey.

      • our city isn’t. Every other south bay city has unions. Every other south bay city pays it’s employees more and have better benefits/pensions. So why is San Jose failing and these other smaller cities doing just fine???? I don’ hear Palo Alto, Santa Clara, Milpitas, etc. crying. Reed and administration messed up. That is all that is to it. Had they managed the finances correctly, this would not have happened.

        • Get real.  Palo Alto is in the middle of placing removing binding aribtiration on the ballot, in fact there is a NLRB ruling to see if it goes on the ballot and they just reduced their fire staffing.  Santa Clara has exhausted their entire fiscal reserve.  All the local cites are in the same state, some just at different places in time.  The strucutral budget deficit is real and when sales tax revenues, property tax revenues, construction taxes, occupancy taxes go down, so does the funding for City services.

  4. Pondering why the Mayor and Council can’t look back about ten years and identify all “new programs” instituted in that period of time.  Rather than letting our roads get to third-world status and drastically cutting our safety officers, why not simply eliminate the newer programs that are beyond the normal functions of city government, e.g., education, health, etc.?

  5. How about gathering all the lightrail cars together in one railyard and setting them on fire.

    That’d save south bay cities 40 million in operating costs – each year. 

    Talk about the gift that would keep on giving.

  6. ” why not simply eliminate the newer programs that are beyond the normal functions of city government, e.g., education, health, etc.? “

    Because most of new spending since 2000 was for:
    –  non-government grants, programs and tax subsidies to corporations and community groups

    – non essential government services

    all of which have Council political connections to Council elections, interest groups, political insiders, former politicians, x city staff or Council staff acting as lobbyists or political paybacks

    City hall does not published in city budget or on city web site a complete list of all non government groups who receive city grants, tax subsidies, free or low cost city leases or services:
    – who receives taxes,
    – how much $$ and
    – public purpose for Council giving away taxes or low cost / free city leases or services

    rather than fully funding essential city services

  7. “City officials have estimated that San Jose will experience a budget shortfall of $78 million for the 2012-13 fiscal year, which would be the 11th straight year San Jose has been outspending its revenue.”

    Hmm, Chuck Reed is elected to the City Council in 2000.  It is now 2011.  He was a two-term council person and on a second term as mayor.  I’m no math whiz but eleven straight years of overspending and Chuck Reed was present as a council person or mayor for all eleven?  And people support his ideas?  Funny but sad that all of a sudden he is claiming to be fiscally responsible at the end of a long reign of foolish financial decisions.

  8. Chuck Reed was elected in 2000 but South Bay Labor and city employee unions elected majority Council for at least 8 – 9 years of his time in office and Reed ran against labor’s candidate Cindy Chavez on platform of reforming budget, city spending and stopping hidden deals with sunshine, openness and transparency at City Hall and voters overwhelmingly elected Reed

    Chuck has delivered and is still today very popular with voters

    Hmm – Bad Math and Forgetful Council History

    • And see how he voted.  Reed voted for all the deals with the unions during his time as council person and kissed their behinds for endorsements his first go around running for mayor.  Now that he has his second term locked in, his loyalty to those he made promises to has evaporated.  Reed licked his finger and held it up into the wind to find out how people would vote this last time.  When he saw the mood of some of the public, he flip flopped big time. 

      Back during his council time however he was rather quiet on the pension reform front.  Even he now rationalizes it away saying he was wrong.  When San Jose joins Oakland as a den of criminal activity with more and more neighborhoods becoming slums, he will again shrug his shoulders, say he was wrong, and parrot whatever the popular issues of the day is at the time.  He is a classic politician more concerned with keeping his paycheck than doing the right thing.

    • At best your account of Reed’s tenure as councilman/mayor is selective recall and at worst revisionist history.

      Reed was elected to both terms as a councilman and first term as mayor after receiving labor endorsements that he begged for from several if not all of the unions that represent city employees.

      What did he promise in return for those endorsements?

      He promised to support wage and benefit increases for the unions that supported him.

      How did he deliver on the promises he made?

      He voted in favor of every single contract. That’s right every one! He voted to approve every Police and Fire wage contract and retirement contract. You know, the same ones that Mayor Reed says are the cause of the City’s 11 consecutive deficits!  Not to mention that as a councilman and mayor, Reed voted in favor of every single budget with their inherent deficits. 

      Reed is partly responsible for every deficit during his terms because he voted for every one of them. AND that Piece of S is going to term limit out of city government after 16 years ( and probably 16 total annual deficits) and walk away with 32% of his salary. He will probably go back to work as a real estate attorney for former Mayor and current beneficiary of lots of Redevelopment Administration Money make that Downtown SJ real estate developer Tom McEnery.  Wait, who is the chairman of the RDA?  Why its Chuck Reed.  Funny, how the wheel turns the money flows in Boss Reed’s SJ.

      • Exactly right Paul!
        So when these disgruntled union employees wonder just who to blame for inflicting us with Chuck Reed, all they need to do is find the nearest mirror and stare into it real hard.

      • Paul, you should check your facts.  While I won’t quibble with Reed’s voting record, he most certainly did not have Labor’s endorsement in any of his elections.  In 2000, Kansen Chu was labor’s endorsed candidate in District 4.  In 2004, he ran basically unopposed for reelection.  In 2006, he came nowhere near a labor endorsement and was actively opposed by labor’s candidate, Cindy Chavez.  Reed never owed anything, and never gave anything, to labor during his terms on the council or as Mayor.

        • @galt – Sorry , the disgruntled employees may have given their support to Reed but as so many have pointed most city emplyees don’t live in San Jose (by choice or because they simply could not / cannot afford to) – If they don;t live here then they didn’t cast a vote for him. So how did he get elected?  THe Larry Pegrams or Pellams got out the vote. 

          @David: If you mean labor as in South BAy labor council or aflcio or teamsters then you are probably right.

          I am talking about “labor” as in the specific union locals rep’ing SJ City EMployees.  There is ample evidence that specific locals or unions or bargaining units certainly did endorse Reed for his council runs and his Mayoral Runs – Just checking my facts I found that the SJPOA ( the police “union” as so many like to call it) even endorsed REED as recently as FEB2010 for the Mayoral Primary Election which took place in June2010. 

          He won that endorsemnt and all previous ones by promising not to layoff cops, not to cut pay/benefits and support reasonalble outcomes of negotiations. REED even said he supported the POA’s request for contract negotiations to be open to the public – He said what he needed to say to get the endorsments. He followed through with all his promises except public negotiations right up until he was reelected to his current/final term as mayor – when he laid off cops, refused open negotiations and in fact directed the CIty Negotiators to basically present non-negotiable demands until he was shamed in to relenting by the public who saw him for what he was. HE did vote in favor of the most recent POA contract which included yet ANOTHER concession in pay and benefits which were awarded to them by previous REED Votes.

        • Your blanket statement is wrong, Reed did not receive all of labors support.  The Fire Union for one did not support Reed in his first run for Mayor, they supported Dave Cortese who didn’t even finish in the final two.  I believe other City unions also did not support Reed.  Since his first run for Mayor has spoken about fixing the strucutral budget dificit and that is what he is doing.  The layoffs are a result of the strucurtral deficit.  Pension reform must happen.

  9. 1) ” would be the 11th straight year San Jose has been outspending its revenue.”  – No,  San Jose can not legally outspend it’s revenue

    A more accurate description of San Jose past 11 year budget deficit process is:

    Each year City Manager puts together a budget spending estimate which for last 11 years is more that the budget revenue estimate and each year the City Manager and Council cut estimated spending back to estimated revenue to meet the legal requirement to have a balanced budget

    During the first 5-6 budget deficit years the city budget game was to cut / eliminating hundreds of unfilled open city job positions that proposed next year budget funded ” saving the city employee costs ” that were mostly not real savings but proposed next year budget costs.  No Layoffs occurred so no real saving occurred only saving from proposed budget but city told public that ” jobs / positions were eliminated and money saved Also programs and expenses were cut saving money

    Finally in years 6-7 City Manager cut / eliminated both city jobs that were unfilled / empty = no real savings and also eliminated jobs that were filled at beginning year that employees left, retired or were transfered to other higher priority jobs.  Again no layoffs but city save money by not refilling jobs = real budget savings Also programs expenses and some non city grants and tax subsidies were cut saving money

    Years 8-10 both unfilled jobs = no real savings, and filed jobs at start of year that were later became vacant and layoffs occurred = real budget savings Also programs expenses and more non city grants and tax subsidies were cut saving money as well as city employee givebacks

    2) There is no voter majority for raising any taxes or Council each year raising fees which Council does without asking opinion of residents and business

    San Jose highest city taxes, fees with most business unfriendly, costly and difficult city approval processes of any Silicon Valley city which results in people, jobs, businesses and tax revenues going to other Silicon Valley cities with lower costs and more business friendly

  10. As has been said many, many times times San Jose’s 11 year financial and budget problems are self inflicted by past and current Mayors and Council politics and city staff who kept quite and went along with political diversion taxes when they failed their professional jobs of doing what was right for city government and public

    Why are many complaining that Reed is acting like a politician Was that a surprise for you, seeing as how past Mayors acted for their own and friends benefit ?

    Councils mostly labor elected have playing politics with San Jose taxes, housing approvals, commercial to residential rezoning, redevelopment tax subsidies, billions city construction projects, city contracts while spending billions on downtown that costs more in taxes every year than taxes produced, labor friendly city policies = business unfriendly policies and very very high city taxes / fees that drive businesses and hundreds millions tax revenue to business friendly cities while neglecting basic services and infrastructure

    Rest of Silicon Valley has more tax revenues, businesses, jobs and better city services than San Jose BECAUSE they did not waste billions taxes on political payoffs, unnecessary and very expensive city building construction, tax subsidies to political insiders

    Tax rich cities unlike San Jose’s self center politician’s developed their business and retail tax base while limiting excess housing development that cost cities more in taxes and requires more city employees than housing taxes pays  

    Talk to Mayors and Councils in well run tax and job rich cities and they either shake their heads or laugh at San Jose small town corrupt insider politics and decades of financial mismanagement that allow smaller cities to develop large tax revenue business and retail base

    San Jose has a dysfunctional Council – City Manager form of city government where almost no accountability by City Manager who is a political tool of Mayor and his political majority rather than professional manager looking out for best interests of city and public as City Manager was intended to do

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