Milpitas council poised to put quarter-cent hike on ballot

MILPITAS >> In a few months, Milpitas residents could be asked to approve a quarter-cent sales tax to help the city cope with potential revenue losses.

The City Council signaled Tuesday it likely will place a sales tax measure on the November ballot that, if approved, could rake in about $7 million a year over the next eight years. The city currently has a 9% sales tax rate.

The council voted 4-1 during a special meeting to direct staffers to return Aug. 4 with specific language for the ballot measure. At least four council members would have to approve it.

To pass, the measure would require a simple majority of yes votes from residents.

Councilwoman Karina Dominguez was the sole dissenter, saying there should be more clarity about how the money would be spent.

Some residents who emailed the council said the proposed tax hike seemed reasonable, and others indicated they would oppose it.

Jamie Schletzbawn said she wouldn’t vote for a tax increase this year, even though she has supported taxes.

“General taxes are regressive and impact the poor the most, and right now people are out of work due to COVID(-19),” she said. “Now is not the time to tax people. I can guarantee you that this will not pass.”

Allysson McDonald suggested the city consider a tax on large businesses instead of a general sales tax.

“Please don’t do this on the backs of our hardworking, lowincome residents,” she said.

But city officials said the tax increase is needed to help offset revenue shortfalls, noting the city already is leaning on reserves to balance its budget and is considering service reductions and possible layoffs.

“Retail sales being down, hotel tax being down, all the revenues that we enjoy to provide the services we have, some of them are down to zero,” City Manager Steve McHarris told the council.

“And we can’t make up for that,” he added.

A city-commissioned survey in May by consultant Fairbank, Maslin, Maullin, Metz and Associates polled 626 likely voters in multiple languages, either online or by phone.

The survey asked about two different quartercent sales tax options: one with an eight-year cap focused on “maintaining city services given the economic downturn” and the other without a cap, “focusing on both city services and public infrastructure.”

The survey found that on first blush, 64% supported a tax increase with an expiration date and 60% would say yes to one without a time limit, according to a city report.

But after hearing arguments for and against the measure, support dropped to 53% and 48%, respectively, the survey revealed.

The council chose to move ahead with a tax that ends after eight years. Vice Mayor Bob Nuñez and Dominguez asked staffers to bring back more information about how the money would be used.

In surveys, people were told the money could go toward police and fire protection; 911 emergency response; youth, senior and recreation services; and park maintenance, among other uses.

However, general sales tax revenue must go into the city’s general fund and could be spent as the council sees fit.

Councilwoman Carmen Montano said she “wholeheartedly” supports the measure.

“This council needs to ensure that we sustain a quality of life in this city with our public services,” she said.

Mayor Rich Tran called the tax measure idea “forward-thinking,” saying it would ensure the city can weather potentially rough financial patches caused by COVID-19.

“It’s going to be a huge difference maker in this period of time in Milpitas,” Tran said. “It’s a time when we all have to do our part.”