☆ Opinion: Prop 5 lost, but SJ Mayor Mahan and councilmembers still want easier taxes
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San Jose City Council recently voted 10–0 to endorse lower voter thresholds for new taxes (despite Prop 5’s rejection in Election ‘24), calling them a “tool” for infrastructure. But Howard Jarvis Taxpayers Association’s tax expert Susan Shelley rebuts their big gov’t arguments, calling the lower thresholds a “mortgage on someone else’s home”—which should demand a broad consensus. An Opp Now exclusive.
{Editor's note: The below comprises comments from CM David Cohen and Mayor Matt Mahan at the 1.14.25 SJ Council meeting, along with rebuttal arguments from Howard Jarvis Taxpayers Ass’n VP Susan Shelley. Timestamps align with this YouTube video of the Council meeting.}
San Jose City Councilmember David Cohen: I was proud to be on a council that had nine votes to support Prop 5 on last year's ballot. That represents the values of this council or the previous council, at least. (1:42:01)
There was clearly a misleading campaign that Prop 5 was going to raise everybody's taxes and was an attack on Prop 13, which it really wasn't. (1:42:30)
Howard Jarvis Taxpayer Association VP Susan Shelley responds: It was not a misleading campaign. Prop 5 would have made it easier to raise property taxes; and it certainly would have resulted in higher property taxes if local governments put bonds on the ballot and they passed more easily.
DC: Half the voters in San Jose support the idea of making it so that our city has more tools in its toolbox to be able to provide infrastructure bond money to do the work that our residents demand every day that we do. (1:42:39)
SS responds: This is not a question of tools in the toolbox. This is about people's homes. This is a question of whether it will be easier to raise property taxes. People who can't pay their property taxes can lose their homes. It’s like a mortgage on somebody else's house—that’s what it is. If you can’t pay it, you lose your property—and it's appropriate to have a two-thirds vote to ensure a strong consensus that it's necessary. In fact, they already do have this in their toolbox—they just need a two-thirds vote.
DC: We have continually raised sales taxes and done other things on our residents because having an infrastructure bond is very difficult, because it requires two-thirds [approval]. So, we rely on other sources of revenue, and we don't actually have a tool that is more appropriate for a lot of the infrastructure work we need to do. (1:43:06)
SS responds: The voters of San Jose may think that they are taxed enough, and the city government should prioritize the current budget.
DC: We know Measure T is going to expire, we know we have work to do on SAP Center and our other cultural buildings. We have a billion-dollar backlog of infrastructure. People are asking us to upgrade our parks, and we're going to need a bond for that. We should have this tool in our toolbox, and I think it's great that our city will continue to at least have a value that we should be just like school districts. (1:43:25)
SS responds: Statewide, voters said “no” by 10 points—55 to 45. They said that it should not be easier to raise property taxes for everything else outside of school bonds. In 2000, they said it should be easier for school districts to borrow money, with certain oversight. But in November, by 10 points, they said “no” to expanding easy approval to local infrastructure bonds because when you raise property taxes, it jeopardizes the ability of people to keep their property.
DC: When a school district goes out to get an infrastructure bond for their school facilities, they require 55% vote. It's not even a majority. They still require a supermajority of 55%. When the state goes out for a bond, like they did this year for climate and schools, it only requires a simple majority.
But yet, when a local jurisdiction—who is the closest to the residents, and we talk a lot about local control—when a local jurisdiction wants to have very targeted money in a bond, it requires two-thirds of the local voters to support it.
And I've been frustrated by that, and I think we ought to continue to stand for the value that we ought to consider aligning ourselves with the other jurisdictions on this. So I'm happy to see that remaining in this report. (1:43:48)
SS responds: Well, let me just clarify that in 1849, the very first California Constitution warned that the legislature had to limit the ability of municipalities to take on debt, to prevent abuses. This was codified in the 1879 Constitution as the two-thirds vote requirement to take on local debt. That's how old this is.
This is not from Prop 13. This is not from recent legislation. This is part of the Constitution of California because it is easy for people in elected office to say, “We need stuff. We don't care how much it costs. The property owners will pay for it.” They want to make it easier to do that, and the voters of California said “no” in November to making it easier to raise property taxes for local bonds.
Local governments should be more efficient in what they're requesting of voters; they should either ask for something that's smaller, or they should stop asking for everything to have provisions that raise the cost. They should look hard at what they're asking voters to approve and how much voters are already paying for school bonds and everything else.
Local governments should look at people's property tax bills and see what they're already paying, and consider that people are going to the grocery store and they can't afford what they used to be able to afford. Those dollar amounts are meaningful to people, and it's reckless for politicians to ignore that concern.
San Jose Mayor Matt Mahan: I’m very empathetic to the real frustration our constituents feel with the high and rising cost of living. It's top of mind for everybody. (2:20:36)
But I also want to remind folks that, really, ultimately, at least for local revenue, it generally goes through both the filter of the council having to get a majority to want to put something on the ballot, or a very aggressive bottom-up grassroots effort to go fight to get something on the ballot—and then goes through the hurdle of needing that, hitting that threshold amongst voters. (2:21:20)
SS responds: Elected officials should build trust with the voters, maybe with smaller projects that are accomplished effectively: a smaller ask, for a more important purpose, and not just blindly asking for the moon and raising taxes without regard to how much people can afford to pay.
MM: And personally, I've always found it strange that for completely open-ended, no accountability general measures, we just need a 50% threshold. When we go out and tell people very specifically, “We are committing to delivering these things that you very much want, and we will deliver, and we will be accountable, and we have a legal obligation to deliver the things we go out and tell you we're going to deliver,” we've got to hit the higher two-thirds threshold that is in these highly polarized times with all of the misinformation on social media, an increasingly difficult threshold to hit even for very popular initiatives. (2:21:41)
SS responds: Well, he can take that up with the California courts because in 1982, in the case of City and County of San Francisco v. Farrell, the California Supreme Court drew a distinction between general taxes and taxes for special purposes, holding that general taxes only need a simple majority.
MM: If I had my druthers, I would probably flip those and say the very specific prescriptive taxes for things we're accountable for delivering should be at that lower threshold, and the more general fund revenues would be at the higher threshold. (2:22:18)
SS responds: My personal preference is to have all taxes require a two-thirds vote because taxes in California are too high, and I don't think it should be easier to raise them.
MM: I also find it odd that other jurisdictions, from state bonds to our school districts, can repeatedly go get the resources they need to deliver on the things that their constituents are asking them to deliver on, and we have a higher and less accessible bar for those of us at the local level who are held accountable for the majority of the quality of life, public safety, infrastructure needs that affect people's daily lives.
And so, I personally don't see myself voting to go put another revenue measure on anytime soon. And it's got that filter of us and then the voters. So there are a lot of checks and balances here. (2:22:34)
SS responds: They should prioritize the current budget, instead of what we’ve seen in, for example, Los Angeles, where city officials starve the fire department while raising civilian union worker salaries. Governments should earn the trust of the voters.
MM: [I] very much appreciate the concerns about cost of living and size of government and our need to do what I think we all agree on, which is make government better, not bigger. And I think that's a mandate we all have right now, and the voters have been very clear about that… (2:23:09)
SS responds: That’s an admirable statement—
MM: …but I lean toward council member Cohen on this, despite feeling very torn, myself, I think having that option and leveling the playing field for different levels of government in the long run, I think would be a good thing, and it's a tool we may want to use. (2:23:29)
SS: Hahaha! I love politics. You know, if they don't have the trust of their voters, they should look in the mirror and figure out why.
They also might want to ask the voters if they're happy with the 55% vote threshold to approve school bonds, or if they'd like to return that to two-thirds. I mean, if they want it all to be the same, why not two-thirds for everything?
He wants to level the playing field to make it easier to raise taxes across the board. Maybe after 25 years of having it be easier to pass school bonds and still having the school districts come out during the election campaigns and say, “Well, we have to take the asbestos out of the walls, vote ‘yes’”—why is there still asbestos in the walls? Maybe voters would say it's too easy to raise school bonds. So, if you want to level the playing field, why level it down? Level it up.
Watch the whole January 14, 2025 SJ Council meeting here.
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