San Jose Mercury News


 Taxpayer group: Santa Clara County sales tax measure is illegal

By Tracy Seipel

August 15, 2012

A local taxpayer group says Santa Clara County's sales tax measure is illegal and is pledging to go to court to stop it from appearing on the Nov. 6 ballot in what some legal experts believe could become a precedent-setting case in California.

The Silicon Valley Taxpayers' Association said state law requires a general tax measure to coincide with the election of local candidates -- in this case county supervisors -- on the same ballot.

But the county supervisor races were decided in the June primary.

In a seven-page letter to the five supervisors and other county officials, an attorney for the group said the county must remove the sales tax measure from the ballot -- or face a lawsuit.

Acting County Counsel Lori Pegg responded Tuesday in a one-page letter saying the county "fully considered the points raised in your correspondence prior to placing Measure A on the ballot and we are confident that, if challenged, a court would conclude the county is in full compliance with Proposition 218.''

Bradley Hertz, the attorney representing the taxpayers association, said he plans to file a lawsuit by Friday because of the imminent deadline facing local elections officials to finish assembling the fall ballot.

The Howard Jarvis Taxpayers Association said the battle is new territory.

"It's a gray area. No court has ever been asked to rule on this type of question," said Tim Bittle, director of legal affairs for the Jarvis association.

Best known as the force behind Proposition 13 that in 1978 slashed property taxes, the group also sponsored Proposition 218, which is at the heart of the dispute. It was passed into law by California voters in 1996 to ensure that all taxes and most charges on property owners be subject to voter approval.

In its letter, the Silicon Valley Taxpayers' Association pointed to a particular section of the proposition that states: "No local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. ... The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body."

Bittle said the purpose of that wording by his organization would benefit voters in two ways: First, local candidates on the same ballot would be forced to say whether they endorsed the sales tax. And second, a regularly scheduled general election would ensure the greatest number of voters would decide a sales tax.

However, all three county supervisor candidates in the June 5 primary received more than 50 percent of the vote; incumbents Dave Cortese and George Shirakawa were uncontested, and state Sen. Joe Simitian easily overcame his two challengers for the board seat being vacated by Liz Kniss. That means there is no supervisor race on the November ballot. And on Aug. 7, when the supervisors voted 4-0 to place the eighth-cent sales tax measure on the ballot, they did not declare an emergency.

Supervisor Mike Wasserman, who has consistently opposed the proposed sales tax measure, was absent from that meeting.

John Roeder, president of the Silicon Valley association's board, applauded Wasserman "for being on the right side of this issue," adding that the county didn't meet the requirements of Proposition 218, which means the ballot measure is illegal.

Indeed, in the group's letter to the county, Hertz cited a four-page memo Feb. 24 from San Jose City Attorney Rick Doyle to the mayor and City Council that outlines the requirements to place a tax measure on the city's ballot, including the need for council elections to be scheduled for the same ballot. The fate of candidates in two council runoffs will be decided on the Nov. 6 ballot, but the council last week voted against putting the proposed half-cent sales tax measure on that ballot.

Still, Pegg said the county believes it has correctly interpreted Proposition 218.

"The county is confident that we are entitled to place a tax measure on the ballot in the November election during a presidential or gubernatorial election year, pursuant to the county charter," said Pegg, even if there is no supervisor race on the ballot.

"How could we predict that there would not be a runoff?"

But Hertz, who specializes in election law, disagreed with Pegg.

"The answer is to have put it on the June ballot, or to have a unanimous board vote declaring an emergency,'' he said, adding that the June primary is also considered a general election cycle under the state's constitution. "Those are the two options.''

But strategists have said that a tax measure was likely to do better in November than in June, when the top issue was nominating a Republican presidential candidate. And because Wasserman has remained opposed to the tax, there was likely no hope of a unanimous vote declaring an emergency.

If passed, the county's eighth-cent sales tax measure would raise an additional $458 million over its 10-year span. County supervisors say it would pay for such things as law enforcement, job creation, hospital emergency room services, health care for low-income children, housing for the homeless, and programs to help students stay in school.

However, it would also send the county's sales tax rate to 8.5 percent, tying it for third-highest in the state. And that doesn't include Gov. Jerry Brown's proposed quarter-cent sales tax measure that would be on the same ballot.

Tax opponents such as Roeder's group say the general tax, which needs only a simple majority vote to pass, allows the county to spend the money on anything it pleases, including pension benefits and salaries.

"They don't list those things," Roeder said.

Yet county officials say at least a decade of consecutive budget shortfalls means the county's financial future depends on the sales tax increase. Moreover, they say, the county already has imposed budget-cutting measures by streamlining county services and convincing almost all employee unions to agree to wage and benefit cuts.

Contact Tracy Seipel at 408-275-0140.

This article is also posted at the San Jose Mercury News web site, here.

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