Proposed sales tax hike headed for November ballot

The Los Gatos Town Council voted 4-1 Tuesday night to place a 1/8-cent sales tax hike on the November ballot.

If approved by voters, the measure would raise approximately $800,000 annually over 20 years and would increase the cost of a $100 purchase by 13 cents.

General sales tax proposals have a 50 percent plus-one vote approval margin.

Since much of the money raised would come from shoppers and diners, the Chamber of Commerce has indicated it will oppose the measure.

Vice Mayor Steve Leonardis, who supports the measure, thinks “the impact will be insignificant to shoppers as well as merchants.”

Money raised by a general tax can be spent on anything. But in this case, town officials said it would be used to maintain neighborhood police patrols, improve traffic flow to reduce congestion, repair potholes and streets, and maintain the town’s longterm fiscal stability.

Councilwoman Barbara Spector voted against the proposal.

“What ballots try to do is they try to put the wording at the beginning like police and streets and potholes,” Spector said. “That’s very attractive and allows people to think that’s what all the money is going to be used for. (But) that is not necessarily what all the money will be used for.”

Spector thinks any new sales tax funds should be used to pay down the town’s $70 million debt for unfunded pension liabilities. There will not be any restrictions on how the money is spent, and the ballot measure will include wording that says the taxes would also be for “unrestricted general revenue purposes.”

The town’s campaign will likely focus on the fact that all the money raised will stay in Los Gatos.

The town’s current sales tax is 9 percent.