At a time when health and social services needs are increasing because of COVID-19, the economic impact of the pandemic also is cutting into public resources that could meet these needs. For Santa Clara County, that impact could be more than $400 million less revenue in the new 2010-21 fiscal year from fees and sales and property taxes.
To avoid drastic cuts in services, a majority of the Board of Supervisors today endorsed a November ballot measure, seeking voter approval of a five-eighths of 1 percent sales tax. The current county sales tax rate is 9 percent.
“COVID-19 and the necessary actions taken by the county in response to it have created a temporary, drastic financial crisis that threatens not only our ability to fund the public health response to the pandemic in the months ahead but also our ability to adequately fund the basic safety net, and emergency and public safety services that residents rely upon during normal times,” wrote board President Cindy Chavez, who proposed the public vote on the additional sales tax.
Supervisors Dave Cortese and Susan Ellenberg supported the Chavez proposal, which directed county staff to come back to the board Aug. 6 with a proposed text of the sales tax measure. If the majority of the board continues to support the plan in August, it will be on the Nov. 3 ballot. Supervisors Joe Simitian and Mike Wasserman voted against taking this first step towards a sales tax boost.
The “five-eighths of one cent” sales tax would generate an estimated $250 million a year in new revenue “to ensure adequate funds to respond to the COVID-19 pandemic, maintain essential services, and support critical priorities, for a period of 60 months,” wrote Cindy Chavez. The tax would expire in 2025, when it is assumed the country's economy would have fully recovered.
The county last month approved a recommended budget as a carryover budget, with plans to convene budget hearings in August to address a projected deficit that “may be well over $400 million,” said Chavez in a statement.
County staff have indicated that they expect additional budget reductions will be necessary at quarterly intervals during the fiscal year. Additionally, the Office of the Assessor and the administration have further expressed that the 2020-21 fiscal year will be significantly impacted by lower property tax revenues.
Further reductions in the allocation of funds to the county from the State of California are also expected, which will further exacerbate the FY 2021-22 deficit, Chavez said.
In addition to funding necessary for COVID response functions, including provision of food and shelter, contact tracing, testing, and treatment of COVID-affected patients in the County’s health system, funds generated by this sales tax “will preserve the safety net services in the county,” Chavez said in a statement..
The safety net services include housing, behavioral health, foster youth support and additional services to immigrants and other impacted populations. This referral calls for a discussion and possible action at a special meeting of the Board of Supervisors no later than Aug. 6 to place a general tax measure calling for a sales tax of five-eighths of one cent on the Nov. 3, 2020 ballot.
Voter approval of any new countywide sales tax measure would be required pursuant to the California State Constitution, which requires a simple majority vote of all county voters if a tax is levied for general governmental purposes, i.e., a general tax.
“This tax is really focused on people who we want to serve,” Chavez told her fellow supervisor on Tuesday. The referendum would give the county “the opportunity for us to lean into the moment,” she said.
The supervisors also approved, on a unanimous vote, a COVID-19 communications plan to strengthen communications about COVID-19 for residents in underserved neighborhoods, partnering with community-based organizations.
The proposal by Cortese’s proposal aimed to ensure that residents in East San Jose are receiving information in a variety of languages delivered by representatives of organizations with whom they are familiar.
“While we’re trying to bridge the digital divide in disadvantaged areas, we know that social media and online communications leaves out thousands who urgently need the information but who don’t have a connection to the Internet or access to computers,” said Cortese in a statement. “They also tend to have jobs that cannot be done remotely and that put them out into the community where they are exposed to the virus.”
The county will contract with 25 to 30 organizations that will be able to use their networks in hard-to-reach communities. The contracts will be from three to six months, and will range from $5,000 to $10,000.
“It just makes sense to take advantage of networks that are already working among the County’s diverse populations,” Cortese said. “These residents live in areas that have been hardest hit by coronavirus.”
The Emergency Operations Center is seeking partnerships with community organizations from a broad range of disciplines including, but not limited to, the arts, culture, theatre and performance, health and nutrition, economic empowerment, youth, faith-based and service organizations.
They include African American Community Services Agency; Alum Rock Counseling Center; ConXion; Far East Dragon Lion Dance Association; Friends of Hue Foundation; Gardner Health Services; Healing Grove; Hispanic Chamber of Commerce; International Children Assistance Network; Immigrant Resettlement and Cultural Center; Latino Business Council of Silicon Valley; Minority Business Consortium; Mountain View Day Worker Center of Mountain View; The Sí Se Puede! Collective that includes SOMOS Mayfair, Amigos De Guadalupe, Grail Family Services, the School of Arts and Culture and Veggielution; Story Road Business Association; Unity Care; Ujima; and the Vietnamese American Roundtable.
Cortese’s proposal was approved along with other outreach plans that include establishing a Community Health and Business Engagements Team, a unified county branding campaign and a multicultural arts campaign.
There is a one-time cost of $1.5 million over six months to add at least 67 Community Health Workers to provide outreach to businesses and individuals in communities that have been disproportionately impacted by the COVID-19 crisis.