Los Gatos council pulls back support for specific sales tax hike

After voting in May to put a sales tax hike on the ballot this fall, the Los Gatos Town Council has yet to make up their mind on how to present it to the voters.

The council last month voted to put a one-eighth cent “specific tax” on the ballot in November, meaning the roughly $1 million in revenue raised from the measure would fund specific budget items under the town’s purview like wildfire prevention. But after extensive discussion at their June 18 meeting and consultation with the town attorney, council members instead voted against putting a specific tax on the ballot and called a special meeting in July to discuss a general tax instead.

The 4-1 vote, with Mayor Mary Badame dissenting, came after council members expressed skepticism that a specific tax would be able to receive the two-thirds vote.it needs to pass.

“Nothing in the polling indicates the 67% would happen,” assistant town manager Katy Nomura said at the meeting.

The general tax would be accompanied by an advisory measure that would indicate which areas voters would like the tax revenue to be directed if both measures pass. While the advisory measure would not legally require the town to abide by its guidance, both measures would only require a simple majority to pass.

Placing the general tax and its companion advisory measure on the ballot would cost $132,000, whereas the specific tax would have cost $66,000, according to town staff.

Town staff requested that the council endorse one of the two tax measures, but the council instead decided to continue its discussion to a July meeting after Vice Mayor Matthew Hudes questioned whether the council was being asked to reconsider a decision they had made in May to support a specific tax.

If so, he said, the council would need to follow the protocol for a motion to reconsider, which includes a discussion of the item at a later council meeting. Town attorney Gabrielle Whelan advised the council to consider scheduling an additional meeting to discuss the general tax.

The sales tax hike has been met with mixed support from community members. Jim Foley, who sits on the board of the Los Gatos Chamber of Commerce, said that the Chamber would support a sales tax hike as long as it was the general tax with an advisory measure.

“While these are really challenging times, and generally a tax increase would hurt businesses in light of inflation and rising costs, we believe that losing the chance to control the proceeds from the tax to the county or any other entity worsens the position of the business community in the long term,” he said.

But the general tax is opposed by the town’s finance commission, whose recommendations to support a specific tax encouraged council members to vote in favor of the measure last month.

Council member Rob Moore was initially opposed to the specific tax last month, especially in light of the parcel tax for the high school district that passed with just barely over two-thirds of the vote in a special election last month. But Moore went on to vote in favor of a specific tax after other council members expressed their optimism that the public would support it.

By the June 18 meeting, however, council members seemed to largely agree that a specific tax would not receive voter approval.

“Hearing from staff that nothing in the polling or past measures indicates that two-thirds is possible, I still cannot support this,” Moore said. “That’s why I think we need to go for a general tax with the advisory measure. I think that makes a lot of sense, and hearing directly from the Chamber of Commerce that they would like the business tax with an advisory measure I think is very telling about what our businesses would like to see out of this council.”