Attachment 2
PREPARED BY: STEPHEN CONWAY
FINANCE DIRECTOR
Reviewed by: Town Manager, Assistant Town Manager, and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
FINANCE COMMITTEE REPORT
MEETING DATE: 12/04/2017
ITEM NO: 4
ITEM NO: 11
DATE: November 29, 2017
TO: COUNCIL FINANCE COMMITTEE
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: REVIEW AND DISCUSS UPDATE ON A POTENTIAL 1/8 CENT SALES TAX
MEASURE FOR THE NOVEMBER 2018 BALLOT
RECOMMENDATION:
Review and discuss update on a potential 1/8 cent sales tax measure for the November 2018
ballot.
BACKGROUND:
On November 7, 2017, the Town Council reviewed the recommendation of the Council Finance
Committee to proceed with preparing a ballot measure to place a 1/8 cent general sales tax on
the November 2018 ballot for Los Gatos priorities. At the conclusion of the Council discussion
and public testimony, the Town Council directed staff to have the Council Finance Committee
review and discuss both the option of a general sales tax and a special sales tax. This staff
report provides additional sales tax information prior to the preparation of proposed ballot
language for both a general tax and a special tax, which will be discussed with the Council
Finance Committee in February.
DISCUSSION:
Types of Local Sales Tax Measures
Whether the ballot measure requires a simple majority (50% + 1 vote) or a super majority (two-
thirds of those voting in the affirmative) depends upon the ballot language and whether the
question is placed upon the ballot as a general tax increase or a special tax increase. A "general
tax" may be used for any public purpose — the funds are fully discretionary and may be
PAGE 2 OF 6
SUBJECT: REVIEW AND DISCUSS UPDATE ON A POTENTIAL 1/8 CENT SALES TAX
MEASURE FOR THE NOVEMBER 2018 BALLOT
DATE: NOVEMBER 29, 2017
N:\MGR\AdminWorkFiles\Council Committee - FINANCE\2018\2-12-2018\Item 5 Attachment 1.docx 2/9/2018 4:40 PM SLL
deposited into the General Fund. A majority vote (50% + 1) of the electorate is required to
impose, increase, or extend a general tax. A general tax may only be put on the ballot at the
same general election when the Town Council election is held, unless the Council unanimously
finds that there is an urgent need to impose the tax measure. Upon such unanimous
declaration, the general tax measure may be put before the voters at a special election.
A "special tax" is a tax imposed for a specific purpose. For example, some cities dedicate tax
revenues for the payment of law enforcement or street maintenance costs rather than using
the taxes for the general operations of government. A two-thirds majority of voters is required
for special taxes. Special taxes may be placed before the electorate at any time, either during a
general election or in a special election.
As the table below illustrates there have been six sales tax measures placed on the ballot in
Santa Clara County since 2008. Of the six measures, four were for general sales tax and two
were for special sales tax. With the exception of the 2014 Gilroy measure, the remaining five
measures passed.
Measure Year Increase Sunset
(years)
General/Special Pass
or Fail
Percent
SC VTA 2016
(Nov)
0.5% 30 Special Pass 71.7%
San Jose 2016
(Jun)
0.25% 15 General Pass 61.4%
Gilroy 2014
(Nov)
0.5% 15 General Fail 45.3%
SCC 2012
(Nov)
0.125% 10 General Pass 56.6
SC VTA
BART
2008
(Nov)
0.125% 30 Special Pass 66.8%
Campbell 2008
(Nov)
0.25% 0 General Pass 70.5%
PAGE 3 OF 6
SUBJECT: REVIEW AND DISCUSS UPDATE ON A POTENTIAL 1/8 CENT SALES TAX
MEASURE FOR THE NOVEMBER 2018 BALLOT
DATE: NOVEMBER 29, 2017
N:\MGR\AdminWorkFiles\Council Committee - FINANCE\2018\2-12-2018\Item 5 Attachment 1.docx 2/9/2018 4:40 PM SLL
All of the measures with the exception of the 2008 Campbell sales tax had some form of a
sunset clause. In addition, as the ballot language below illustrates the majority of the initiatives
reference some form of oversight and/or fiscal accountability. Many of the initiatives also
reference local control.
Measure
Name
Ballot Question
Santa Clara Valley
Transportation
Authority,
California,
Transportation
Infrastructure Sales
Tax, Measure B
Nov 2016
Special
To relieve traffic, repair potholes; shall VTA enact a 30 -year half-cent sales tax to:
Repair streets, fix potholes in all 15 cities;
Finish BART extension to downtown San Jose, Santa Clara;
Improve bicycle/pedestrian safety, especially near schools;
Increase Caltrain capacity, easing highway congestion, improving safety at
crossings;
Relieve traffic on all 9 expressways, key highway interchanges;
Enhance transit for seniors, students, disabled; Mandating annual audits by
independent citizens watchdog committee to ensure accountability
San Jose, California,
General Sales Tax,
Measure B
Jun 2016
General
“To fund essential City services such as: improving police response to reduce violent crimes
and burglaries; improving 911/emergency medical/fire response times; repairing potholes
and streets; expanding gang prevention; and maintaining the City’s long -term financial
stability, shall the City of San Jose enact a ¼ percent sales tax for 15 years, providing about
$40 million annually, requiring Independent Citizens Oversight with public review of
spending, and all revenues controlled locally?”
City of Gilroy Safety
and Quality of Life,
Measure F
Nov 2014
General
“To improve local quality of life and maintain essential City services, including police/fire
protection; gang suppression/prevention; 9-1-1 emergency response;
street/pothole/sidewalk repairs; earthquake safety; at-risk youth programs; park repairs;
and other general services; shall the City of Gilroy enact a half cent sales tax for 15 years
with authority to incur debt to accelerate infrastructure projects, requiring independent
audits, public review and no money for Sacramento?”
Santa Clara County
Sales Tax Increase,
Measure A
Nov 2012
General
"Shall the County of Santa Clara enact a one-eighth cent sales tax, that cannot be taken by
the state, for local priorities such as:
Law enforcement and public safety;
Trauma and emergency room services;
Health coverage for low-income children;
Economic development and job creation;
Housing for the homeless; and
Programs to help students stay in school;
for a limited period of ten years, with annual public reports to ensure fiscal
PAGE 4 OF 6
SUBJECT: REVIEW AND DISCUSS UPDATE ON A POTENTIAL 1/8 CENT SALES TAX
MEASURE FOR THE NOVEMBER 2018 BALLOT
DATE: NOVEMBER 29, 2017
N:\MGR\AdminWorkFiles\Council Committee - FINANCE\2018\2-12-2018\Item 5 Attachment 1.docx 2/9/2018 4:40 PM SLL
accountability?”
Santa Clara VTA
sales tax for BART,
Measure B
Nov 2008
Special
"To reduce dependence on foreign oil, help relieve soaring gas prices and combat climate
change, shall the Santa Clara Valley Transportation Authority enact a 1/8 cent sales tax
limited to thirty years for BART to operate/ maintain/ improve the 16.1 mile Santa Clara
County BART extension, with stations in Milpitas, San Jose, and Santa Clara, connecting
with Caltrain from Gilroy to San Francisco and an Airport People Mover, to be collected
only if sufficient state/federal funds are secured to match local con struction dollars?"
City of Campbell
Sales Tax, Measure
O
Nov 2008
General
"In order to maintain and protect City services and facilities, such as City streets and
pothole repair, fire protection and 911 emergency medical services, police patrols,
neighborhood watch and crime prevention programs, the Community Center, recreation
programs, and parks, shall the City of Campbell be authorized to enact a one -quarter cent
sales tax, with all proceeds placed in the City's General Fund with independent annual
financial audits?”
Sales Tax Ballot Measure Timeline
Provided below is an estimated timeline in the standard ballot measure sequence of Election (E)
minus requisite days format. The timeline provided is based on last year’s schedule posted by
the Santa Clara County Registrar of Voters. The current year’s schedule has yet to be posted
but staff doesn’t anticipate that dates will differ materially from the information below.
Date(s) E Minus Action
June 19 E-140 Last day to adopt Ordinance
June 19 E-140 Suggested last day for Council to adopt resolutions
June 19 E-140 Suggested last day to post Notice of Deadline for Filing Arguments and
Impartial Analyses
No deadline except
ONCE before Election
Day
Elections Official to publish Notice of Election – Measure(s) Only, No
Candidates
PAGE 5 OF 6
SUBJECT: REVIEW AND DISCUSS UPDATE ON A POTENTIAL 1/8 CENT SALES TAX
MEASURE FOR THE NOVEMBER 2018 BALLOT
DATE: NOVEMBER 29, 2017
N:\MGR\AdminWorkFiles\Council Committee - FINANCE\2018\2-12-2018\Item 5 Attachment 1.docx 2/9/2018 4:40 PM SLL
7-14 days after Council
puts Measures on the
ballot
Suggested last day to file Arguments & Impartial Analyses
August 10 E-88 Last day to Call Election for Ballot Measures
August 10
by 5 p.m.
E-88 Last day for County to receive Resolutions requesting services for
consolidation
August 15 E-83 Last day to Withdraw Measures from the Ballot
August 23 E-75 Time to Cancel Election – Insufficient Candidates
November 6 ELECTION DAY
Based on the timeline above, staff believes that pending the outcome of Council Finance
Committee deliberations in February, sufficient time exists for Town Council deliberations, and
if directed, drafting ordinances for submittal in June.
CONCLUSION:
Staff is continuing to review previous ballot measures and will bring proposed ballot language
and additional information to the Council Finance Committee in February.
COORDINATION:
This report was coordinated with the Town Manager’s Office, the Town Attorney’s Office, and
the Finance Department.
FISCAL IMPACT:
Total election costs for the Town for three Council seats and on e ballot measure are yet to be
determined, however, the cost for two seats and one ballot measure in 2016 was
approximately $120,000. In addition under the Revenue and Taxation Code section 7272, the
Board of Equalization (BOE) will bill a new special taxing jurisdiction for preparatory charges to
PAGE 6 OF 6
SUBJECT: REVIEW AND DISCUSS UPDATE ON A POTENTIAL 1/8 CENT SALES TAX
MEASURE FOR THE NOVEMBER 2018 BALLOT
DATE: NOVEMBER 29, 2017
N:\MGR\AdminWorkFiles\Council Committee - FINANCE\2018\2-12-2018\Item 5 Attachment 1.docx 2/9/2018 4:40 PM SLL
administer the new district tax based on actual costs after the tax has been submitted by the
various BOE units’ actual charges. The statutory maximum amount of preparatory costs shall
not exceed $175,000.