Update: Measure to extend sales tax for 20 years passes handily

Seventy percent of voters Tuesday agreed with Measure K, a proposal to extend by 20 years a 10-year countywide half-cent sales tax that would have expired in 2023.

With all precincts reporting, the count on Tuesday was 131,536 for the measure and 57,181 against.

While most tax measures require approval of two-thirds of voters to pass, Measure K needed only a simple majority, or just over 50 percent, because the revenues are not earmarked for a specific purpose.

The tax has been adding about $85 million annually to the county’s general fund, advocates say.

County supervisors in support of the measure say the revenues will be vital to efforts to provide affordable housing for “seniors, people with disabilities, veterans and families.” Other priorities include enhancing public transit, combating human trafficking, addressing sea level rise, and maintaining safe schools and neighborhoods.

“I’m extremely excited to see the overwhelming support for Measure K,” Supervisor Dave Pine said. “The support exceeded my expectations. To see 70 percent approval of a sales tax hike is extraordinary.”

“I’m happy about the outcome, obviously, Supervisor Horsley said. An approval of 70 percent of voters is a bit higher than it was when Measure A passed in 2012, he noted.

It may reflect, he said, that the board kept promises on how they were going to spend the money. “I think people have a lot of trust in board members doing what they say they’re going to do,” he said. “We did it with Measure A and we’ll do it again with Measure K.”

How to spend it

The Board of Supervisors will be considering a two-year budget in the first half of 2017 and will be making decisions about how to invest in affordable housing, Mr. Pine said.

With 27 years of income from both Measure A and Measure K, the supervisors will look into lease revenue bonds to build affordable housing, perhaps as was done to build the new jail and a juvenile hall.

County Counsel John Beiers has said that while projects for such “core county facilities” are common in the bond market, affordable housing may not be in the same category.

“Whether a similar financing structure is feasible for affordable housing is a complex issue,” Mr. Beiers said in an email, “and the County would need to work with bond counsel and its financial consultants if the measure passes and the County ultimately decides to explore it.”

It’s possible, Mr. Beiers said, that Measure K revenues would go to support affordable housing in ways not involving construction.

The Board of Supervisors could also pursue public/private partnerships with developers, Supervisor Don Horsley has said, noting that the county is considering a $200,000 loan to Peninsula Open Space Trust and Blue Horse Farm to buy two mobile homes for farm labor housing.

Opponent comments

Matt Grocott, a San Carlos councilman and chair of the “Committee to Stop K, Why Now?”, said he wasn’t surprised that it passed because it had significant institutional and union support and proponents who put a lot of money into it “and a ton of advertising.”

The latest campaign finance report from the Elections Office showed more than $1 million in contributions in support of Measure K, including several five- and six-figure contributions.

“With that kind of organization, with that kind of money and support, it’s hard to overcome,” he said. “(Unions) always have the means of organizing any time they put a campaign together, which leaves the other side scrambling.”

Housing crisis

Between 2010 and 2014, Supervisor Horsley said, businesses in the county created 55,000 new jobs while developers built just 2,100 new housing units.

“We have a housing crisis now that has been developing over the past several years,” he said. “The business community (is) telling us that it is becoming difficult to recruit and retain employees because of the lack of housing.”

Opponents argued that with seven years yet to run on the current tax, it didn’t make sense to extend it now.

“If housing is as compelling as (Mr. Horsley) says it is, what the county should have done was to put a bond measure specifically for housing on the ballot. If you’re going to do this, do it right,” Mr. Grocott said.

Supervisors in Santa Clara and Alameda counties proposed bond measures for the Nov. 8 election to fund housing by borrowing up to $950 million and $580 million, respectively. (Both measures passed, according to unofficial counts from the respective county election offices.)

By July 2017, Measure A, the current San Mateo County half-cent sales tax, will likely have added a total of $322 million to the county’s general fund, about $104.6 million of which has been spent. The 2016-17 budget allocates $178.3 million for Measure A spending.

Following are examples of expenditures from the half-cent sales tax revenues: $15 million for public transport for the disabled; $14 million for technology infrastructure; $12.5 million in North Fair Oaks to put utilities underground, add street lights and make other changes to improve the neighborhood; $2.1 million for new fire engines; $1.7 million for homeless shelter operations in East Palo Alto; $900,000 on summer school reading programs; and $307,000 on housing for farm laborers.

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