☆ Silicon Valley Business Alliance takes on Measure A: SC County’s latest sales tax
A 5/8 cent sales tax might not seem like much, but it’s part of a “death by a thousand cuts” for small and medium-sized businesses in Santa Clara County. So says SVBA Board Member and Treasurer Pat Waite, who argues Measure A will push prices up and hurt local businesses, forcing retailers with thin margins out of business—if they haven’t been shuttered already. An Opp Now exclusive Q&A.
Opportunity Now: Why did the Silicon Valley Business Alliance decide to oppose Measure A?
Pat Waite: Whether you call it a tariff, a gas tax, sales tax, property tax, or business fees, all of these have an effect on the cost of goods and services to the consumer. So Measure A will hurt businesses, especially small business owners and entrepreneurs, because it will put more pressure on consumers. It's already very hard to do business in this area. This will make it less affordable for the customers, which means it will make it harder for businesses and that's what concerns our group the most.
ON: The Measure A sales tax would push Campbell’s rate up to 10.5%, and Milpitas and San Jose to 10%. On its own, 5/8 of a cent may seem like a small increase, but what’s the real-world effect on businesses?
PW: This is like death by a thousand cuts. Measure A wouldn’t be the only tax that has been passed in the last decade. Numerous new taxes, regulations, and even tariffs have affected the cost of goods. A lot of retailers operate on lower margins, so either they have to increase the cost to the consumer or go out of business. A lot of them have gone out of business.
ON: The SVBA represents small and medium-sized businesses. How are they feeling about this new tax hike on the ballot?
PW: They feel that they have been abused by local and regional government, and frankly that nobody cares about the plight of small business and retailers. We don’t represent big businesses like Costco and who are more able to afford higher fees.
ON: Do you think a sales tax increase could benefit the larger chains and big box retailers?
PW: Absolutely. They’re driving the small guys out.
ON: The Board of Supervisors says this tax hike is needed to respond to a funding emergency for local hospitals. How effective do you think previous emergency taxes and spending increases have been?
PW: Local governments have called the housing crisis an emergency. Same with the homelessness crisis. Even though new taxes were enacted, housing remains unaffordable for too many and the number of unhoused people continues increasing.
Government is quick to propose new taxes and regulations to deal with emergencies, when, in fact it’s their poor decision making and poor management that has put us in the situation that we're in. The county should have known about the costs of the hospitals that they purchased. O'Connor and Regional Medical Center were not making money, yet the county still made the decision to purchase them. They can say it's an emergency, but it's because they haven't really dealt with the underlying reasons why they are in the financial situation that they're in. Government needs to address that issue before asking taxpayers for more of their hard-earned money.
ON: If you were on the BOS, would there be a better way to deal with the funding crisis than propose another sales tax?
PW: O'Connor Hospital is less than two miles from Valley Medical Center. It doesn't make financial sense to have two county run hospitals right next to each other. Maybe they could sell the O’Connor building to a private sector business that could turn it into a mental health institution.
ON: Measure A is a general tax, meaning it doesn’t isn’t required to go to the public hospitals. What do you think tends to happen to money from these general taxes?
PW: The county has a history of prioritizing perks over people. A recent example is using over $75 million of COVID funds to give bonuses to all county employees, regardless of their salary level or whether they were essential workers. The county also has a history of being generous with labor negotiations. They are not good stewards of our tax dollars, and because of this I tend to oppose general tax measures.
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