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April 12-18, 2006

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Carl Guardino

Photograph by Felipe Buitrago
On the A Team: Carl Guardino, head of the Silicon Valley Leadership Group, is a vocal supporter of Measure A.

Measure A Replay

The fight for moral high ground in the debate over Measure A comes from Silicon Valley's past as a tax trailblazer

By Najeeb Hasan

DAVID FADNESS, a long-time transit activist who has been involved in Santa Clara County transportation issues for two decades, remembers the first Measure A, in 1984. It was a 10-year, half-cent local sales tax increase that paid for Highway 85, improvements to 237 and widening 101.

It also made Santa Clara County the first California county to use local taxes for state roads. Fadness believes it set a pattern for a regressive tax policy for transportation improvements in the county.

At the time, remembers Fadness, 237 was essentially an increasingly congested street, and it was former state Sen. Dan McCorquodale (then a county supervisor) who came up with what Fadness considered a far more progressive solution. However, Peter Giles, the former president of the Silicon Valley Manufacturing Group (now the Leadership Group), was against it.

"There was a lot of push to try to get the funds to build a freeway," says Fadness. "Everybody was busting their hump trying to figure out a way to do that, and Dan stood up at the meeting and said, 'I know how to solve this problem: We'll just slap an assessment on the companies that are doing business on the 237 corridor.' Peter Giles was there, and, lo and behold, about two weeks later we read about Zoe Lofgren coming up with this splendid idea of Measure A, the half-cent tax increase, which was received with a lot of fanfare."

Fadness says he understood the appeal.

"It was obviously a clever new idea. All of these projects were planned for decades, and there was no funding and no prospects for funding," he says. "But the problem was that it was dependent on a very regressive tax and certainly shifted away [from McCorquodale's vision,] from those big buck guys who are in plush offices in Silicon Valley."

Now history seems to be repeating itself with the new Measure A, a local half-cent sales tax increase intended to be used for general county and transportation purposes and slated to appear on the June 6 ballot, which has sparked the same debate over who should shoulder the burden of transportation costs.

Ballot Déja Vu

Once again, opponents of Measure A—this time, an eclectic mix of anti-tax crusaders, environmentalists, transit watchdogs and what-will-this-do-for-my-constituency politicians—have labeled the tax as classically regressive, in the sense that the burden of paying for country services, including transportation, is on the shoulders of the individual. One figure that has been tossed around estimates that the half-cent increase would cost the average Santa Clara County family of four about $225 per year.

"It's a sales tax," says Greg Perry, a Mountain View city councilman and one of Measure A's most vocal opponents. "A vacation to Aruba doesn't show up as a sales tax, but a jumbo box of diapers does. The transportation part is essentially taxing poor people to bring in out-of-town commuters to compete with them for jobs."

And once again, the Silicon Valley Leadership Group, now headed by Carl Guardino, is firmly behind Measure A, along with a similarly eclectic group of proponents, many of them progressives themselves.

"I haven't seen a tax yet that everybody likes," says Guardino. "A sales tax, like any tax, has its pros and cons. A con is that some accurately refer to it as a regressive tax. But, if something is important to society, we are firm believers that everybody should pay because everybody prospers." Guardino also adds that sales taxes in California don't include some essentials for living, such as utilities and housing—a benefit, he says, for the state's poorest residents.

Meanwhile, at the same time that the Leadership Group has thrown itself into the center of the Measure A debate, its opponents point out that SVLG has been the primary mover behind legislation reintroduced in California's Senate that would exempt businesses from paying state sales tax on a broad range of manufacturing and research and development equipment. The California Board of Equalization, in analyzing an earlier version of the legislation that did not pass (which was also sponsored by the Leadership Group), estimated that the bill would have cost the state government $2.1 billion annually had it passed. Additionally, the earlier version also asked for a local sales tax exemption, which the Board of Equalization estimated would have cost local governments $1.1 billion annually. Thus, concluded the government analysis, California would have stood to lose $3.3 billion annually—or, $2.9 billion if the economic activity sparked by the tax exemptions was factored in—had the Leadership Group's bill passed (the Leadership Group disputes the government figures).

While the new version of the bill, which was introduced by state Sen. Elaine Alquist (D-San Jose), does not ask for the local sales tax exemption, the irony is not lost to the Leadership Group's critics: had the older version of the bill passed, the companies represented by the Leadership Group would have been exempt from the half-cent increase in local sales taxes that the same organization is now pushing through Measure A.

"It's interesting how much Carl sounds like a politician," says Eugene Bradley, the founder of the VTA Riders Union. "He's talking from both sides of his mouth, just like a politician."

Guardino, however, accuses his critics of misleading the public on the earlier bill, saying the bill had an opt-out provision to protect local governments from losing much-needed sales taxes and that it wouldn't go into effect unless there was a healthy economy. "I don't think anyone is angrier than Elaine Alquist about how her bill has been misrepresented," says Guardino, who says the purpose of the tax exemption bills in California's legislature that SVLG is supporting—there have been at least seven of them since Jan. 1, 2004—is to prevent California from "double-taxing" its manufacturers. "To even imply that members of this organization haven't been supported or leading [initiatives to improve the county] doesn't stand up to historic truth. Besides, that's a dead bill. The new bill completely exempts cities and counties."

The BART Connection

Measure A has already been the subject of significant controversy in the county, thanks to the much-documented inefficiency of the Valley Transit Authority and the ever-present, ever-distant goal of bringing BART to San Jose. When voters approved 2000's Measure A, a 30-year, half-cent sales tax that could only be used for transit—BART, light rail, Caltrain, buses—and which kicked in two Saturdays ago, the promise of BART finally reaching San Jose seemed almost achievable. But, the tech bubble burst, and, along with it, the financial projections for the new tax, and BART again seemed impossible. That led to the county's transportation leaders examining the possibility of putting a quarter-cent sales tax measure on the county's November 2006 ballot. The quarter-cent tax increase faced a stiff challenge by California's Proposition 218, which stipulates that tax increases for specific projects be passed by two-thirds majority, not a 50 percent plus one majority.

Additionally, reports surfaced in late January that Guardino, whose Leadership Group has been a vocal proponent of BART to San Jose, was circulating the results of poll undertaken by the Leadership Group to politicians and other stakeholders that demonstrated, among other findings, that a quarter-cent sales tax for transit would not fly with county voters. The poll itself was never made public. In a letter that described the results, Guardino wrote that the same poll showed that the quarter-cent tax, if combined with another quarter-cent tax that the county wanted to float for general use, would be passed by voters as a half-cent sales tax increase. If the two taxes were combined as a "general" tax without mentioning specific projects like BART, then the measure would side-step the two-thirds majority demand of Proposition 218 and only require 50 percent plus one vote to pass.

And so, 2006's Measure A was born—along with accusations by its opponents that the Leadership Group and other BART proponents were pulling a fast one. The ballot statement makes no mention of BART; instead, it refers to revenue that will be used for "general county purposes, such as"—and here several poignant examples of county need are listed—"the County hospital and clinics; trauma and emergency services; affordable homes for families and seniors; health insurance for uninsured children; prevention programs for at-risk youth, families and seniors; for abused and neglected children." In the middle of this list is, "transportation improvements approved in city and countrywide transportation plans."

Fadness has asked Guardino to attend an election forum scheduled for April 25 for Blossom Valley's VEP Community Association. The forum features appearances by the five major mayoral candidates as well as a debate about Measure A.

"I invited Carl to come," relates Fadness. "He said, Dave, I can't talk to you about this [Measure A]. Carl has to be very, very careful about being seen as a direct link to this tax because he'd had that strong push for BART. You want to ask him how can he legitimately distance himself from this tax. How can he honestly say this is not a special tax, when in fact everybody knows what it's for?"

"I'm not the campaign spokesperson," Guardino responds. "I'm running the Silicon Valley Leadership Group. That is a full-time job. I'm volunteering with this when I can."

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