Higher taxes in these times?By John Woolfolk
Like so many families these days, the Gravelles of San Jose feel squeezed. Their home has lost about $250,000 in market value, their monthly gasoline bill hit $394, they've got one son heading to college and another to Catholic high school.
But valley officials are urging them to keep their pocketbook open, with more than a dozen local revenue measures filling the November ballot. The county hospital needs an earthquake retrofit. A long-planned rapid transit extension needs operating funds. Schools and libraries need refurbishing. City budgets are potholed with deficits.
And Andrea Gravelle isn't sure her family can afford to be so generous this year.
"More money in a family's pocket is what makes sense to me right now, with how things are going," said Gravelle, 46, a teacher's aide at St. Leo the Great School.
Local officials have aimed their revenue measures at the November ballot because conventional wisdom holds that presidential elections draw younger and more diverse voters who are more likely to approve taxes and bonds for public needs.
Yet with so many measures competing for voters' dollars, the costs add up. Depending on where in Santa Clara County they live, homeowners would have to dole out anywhere from an extra $101 to $351 a year should every measure pass.
An $870 million bond measure to fund required earthquake safety retrofitting at Santa Clara Valley Medical Center is projected to cost average county homeowners $65.05 in the first year.
It's hard to say how much more county voters might pay each year if they also approve the Santa Clara Valley Transportation Authority's proposed one-eighth-cent sales tax to fund operation of a planned Bay Area Rapid Transit extension. But a rough estimate based on the measure's projected $42 million annual revenue, assuming businesses and tourists would contribute half of it, is that the tax would cost an average household about $36 a year.
San Jose and some of the school districts also hope voters will agree to renew payments they already make. The city has offered residents a 10 percent discount from current rates if they approve new versions of two existing phone charges.
That means the $1.75-a-line monthly fee they now pay to support San Jose's 911 emergency dispatch center would drop to $1.57 a month. The 5 percent telecommunications tax they now pay would shrink to 4.5 percent. Total annual savings for one landline and one cell phone: about $7.
But there's a hitch. The current 911 fee, adopted in 2004, expires next year and is considered legally shaky unless voters renew it. And the proposed update of the telecom tax also would broaden its scope to include out-of-state calls made over landlines and ensure it applies equally to new technologies such as text-messaging. City officials expect that will at least partly offset the rate reduction.
So while families like the Gravelles might save $7 a year on city phone taxes if both city measures are approved, the savings could be three times that if the 911 fee were simply allowed to expire.
Because they live in the Oak Grove School District, the Gravelles also are paying school bonds that cost the average homeowner $153 a year. That cost would be maintained, rather than gradually decreasing, if a proposed $125 million district bond measure passes this fall.
The state also has its hand out. Gov. Arnold Schwarzenegger has proposed a temporary 1 percentage point sales tax increase to help deal with a multibillion-dollar state deficit. While that wouldn't go on the ballot, if Schwarzenegger can get legislators to go along, it would boost what Californians have to pay before voting on a single tax or bond proposal.
And the November ballot includes four statewide measures calling for a total of nearly $17 billion in bonds for high-speed rail, alternative-fuel cars and renewable energy, children's hospitals and veterans, plus an initiative to raise public safety spending that the state legislative analyst says probably would require additional revenues down the road.
While the state measures don't automatically raise taxes, they do add to the state's costs. Critics of the biggest bond measure, $9.5 billion for high-speed rail, argue it will cost the state general fund a total of $20 billion, or $2,000 per average California family over the 30-year life of the bonds. It would require the state to pony up $67 million a year at a time leaders in Sacramento are already struggling to patch a $15 billion shortfall.
San Jose gas station owner Joseph Lai, 50, has deep reservations about approving more government borrowing and said government officials "need to prioritize our budgets and control the costs."
"I'm very skeptical," Lai said. "I don't believe we can continue to borrow to stay afloat. You can't continue to borrow and pass your debt to your children and grandchildren."
Indeed, local officials fear voters will be so overwhelmed they'll keep a tight grip on their wallets. "I know people who have about had it," said County Supervisor Don Gage. "They're just going to say no to everything."
Gage, who also sits on the VTA board of directors, worries the proposed BART sales tax, which he opposes, might derail support for the critical public hospital retrofit. If the bond measure fails, he said, the county would be forced to close half of VMC, including the trauma and burn centers. The proposed $6 billion BART extension wouldn't break ground for at least five years.
But Silicon Valley Leadership Group Chief Executive Carl Guardino, who is leading the charge for the BART tax, said operating money is critical to securing federal funding to help pay for the line's construction.
Besides, Guardino, a veteran of local tax measures, believes Silicon Valley voters will spend the money on a good investment, citing persistent public support for BART in polls and in previous elections.
If Gravelle is any indication, he may have little to fear. Despite her doubts about increasing her family's taxes, she believes both the hospital and BART are necessary.
"We need more of that kind of transportation, less cars on the road," Gravelle said, adding that "the Valley Med thing, that has to happen - that's just a huge trauma unit."
If she's looking askance at any of the proposed measures, it's those from the city and school district. The Gravelles pay private-school tuition in part because they lack confidence in the school district. As for San Jose's phone measures, she's not sure what the benefit would be to maintaining the charges, even at a reduced rate.
"You don't know where the money's going anyway," Gravelle said. "All of our money is going to feeding two kids."
But San Jose Mayor Chuck Reed said the measures' failure would be dire for the city. The two phone charges currently raise about $48 million a year - about twice the size of the deficit the council had to close to balance this year's budget.
"If voters don't approve this," Reed said, "we'll be cutting core services."
Copyright ©2008 San Jose Mercury News. Published 08/10/2008.