The Milpitas City Council is back to meeting again, after their July break.
And on Tuesday night, Council voted to place a sales tax measure on the November 3, 2020, election ballot.
If voters approve of the measure in November, the ¼ cent Transactions and Use Tax (TUT) would mean an increase in the City’s overall sales tax rate, from 9.00% to 9.25%. The tax would bring in an additional $6,500,000 annually for 8 years, providing, as written in the proposed measure…
funding to maintain the City’s finances and services, including: police and fire protection, 9-1-1 emergency response, and natural disaster preparation; youth, senior, and recreation services; repairing park equipment and maintaining parks and recreation centers; and attracting and retaining local businesses…
Back in May, Council directed City Staff to poll residents about the potential measure. Based on the results of the poll — in which 53% supported the measure with a sunset clause — staff prepared written language for a sales tax ballot measure.
At the meeting, Finance Director Walter Rossmann spoke of how dire the City’s financial situation is due to the COVID-19 pandemic. He brought attention to the month of June of this year, in which the City received only $200,000 in Transient Occupancy Taxes (TOT), which are the taxes received from occupants of hotels and motels. During a normal June, TOT revenue would have been $1,000,000.
“It may recover. Travel may pick up. But we don’t know that yet,” said Rossmann.
Rossmann also mentioned that during the months of March, April, May, and June, the City lost $11 million in revenue — and that number might get higher in the months to come.
One of the ways to make up for the revenue loss is to cut City services, like public safety and recreation services. However, the sales tax measure would be another alternative.
Earlier in the discussion, Councilmember Karina Dominguez had not been supportive of the ballot measure. She mentioned the possibility of exploring a different tax measure to put on the ballot in 2022, and taking the time to look at other ways of bringing in revenue, ones that would not require the working class to put money into the tax, such as a corporate tax.
After Dominguez spoke, Mayor Rich Tran drew attention to the fact that conversations about the proposal for the tax measure had started earlier in the Spring.
“For you to say you have an idea, this is the eleventh hour. So where were you in April, May, June, July? So we really need to look ourselves in the mirror and be held accountable,” said Tran.
These words did not seem to sit right with Dominguez.
“I will say that I am feeling that your words are gaslighting my ideas. And I want to be clear that I’ve been very present in our community,” said Councilmember Dominguez, who would go on to call out the Mayor for other instances during the meeting when she felt she was being “gaslighted.”
Councilmember Anthony Phan had ideas for using the funding to provide relief to residents who are struggling due to the pandemic.
“We need to start things that we haven’t been doing, or haven’t been doing enough,” said Councilmember Phan. For example, he wanted to see revenue from the tax go toward things like creating more full-time positions with the City, expanding the rent relief program, and supporting small businesses.
After nearly two hours of discussion, all five members of the Council voted to move forward with placing the sales tax measure on the ballot. New language was added to the ballot, bringing a citizens’ oversight committee into play, which Vice Mayor Bob Nuñez had asked for.
Even Councilmember Dominguez changed her mind and cast a vote for putting the tax measure on the ballot. When she was asked by The Beat afterward about why she decided to vote in alignment with the Council, she wrote in an email: “In a hard vote, we were able to compromise and reach an agreement to include the feedback of our citizens which includes an oversight committee, a public platform (this would show where the funds are spent) and revised ballot language that clearly states that the revenue will be spent on services vs. infrastructure. We need to invest in services, not infrastructure. New buildings without the staff to provide services doesn’t do enough for us. And during a pandemic, we need to address our public health and support our residents. And to always do so with THEIR input.”
When asked how she felt about how discussion of the item went on Tuesday, Dominguez also shared: “All of the excitement that I had returning to City Council to see something different was washed away by the continued misguided leadership AND behavior of our Mayor.”
In order to go into effect, the one-quarter of a cent tax will require majority (50%+1) voter approval.
“We know that consumers don’t like to pay sales tax but this proposed 1/4 cent Sales Tax is essential to alleviate the impacts of this global pandemic to Milpitas,” Councilmember Carmen Montano shared with The Beat, after making the vote. “COVID-19 is not going away anytime soon. Some businesses have unfortunately closed down for good. COVID-19 has hit our businesses hard and drastically reduced revenues that are essential to sustain core services to our residents.”