SAN JOSE — Starting on Saturday, buying a car, a pair of new shoes or even a slice of your favorite pizza is going to cost more.
San Jose’s quarter-cent sales tax increase, which was overwhelmingly approved by 61 percent of voters in June, goes into effect Oct. 1. That increase brings San Jose’s sales tax to 9 percent, up from 8.75 percent, one of the highest rates in Santa Clara County.
That means grabbing a specialty pizza like the $29, 20-inch “white pie” with fresh basil or the “sweet and spicy” with chorizo and pineapple at Bibo’s NY Pizza in Willow Glen will now cost you an extra 7 cents. But owner Fred Elian doesn’t think the bump will chase away starving customers.
“Obviously with the increase, I’ll have to adjust the prices slightly,” Elian said. “But on a large scale, it won’t have a big impact.”
But, taking off his business owner hat, Elian says the increase irks him as a consumer.
“When I shop in San Jose and I pay 8.75 percent, and I go to another state where there is little or no state tax — it’s a little upsetting to see such a high rate,” he added. “If I was on the other side of the counter, I’d be a little upset about it.”
San Jose city leaders, including Mayor Sam Liccardo, warned of potential budget deficits in the city’s future and campaigned hard in favor of a tax bump earlier this year, saying the badly needed revenue would fill potholes and bolster public safety. The tax will be in effect for the next 15 years.
While there is little argument the city needs to increase its cash flow, some fiscally conservative council members worry that the money might not be used exactly how city leaders promise.
“There are no legal guarantees the money will be spent that way, and the next council could spend it any way they want,” said Councilman Pierluigi Oliverio, who opposed the tax and also worries it could impact taxpayers who struggle to make ends meet. “Every increment of tax increases impacts the lowest wage earners in the economy.”
Early projections estimate the tax could generate $30 million in its first year. A plan from City Manager Norberto Dueñas allocated $17.7 million in one-time funding to increase pavement maintenance on major streets and address deterioration.
That brings the city’s total investment to pavement maintenance in the next year to $30.6 million.
The plan also allocates $4.8 million to “improving response times” to fire and medical emergencies. Dueñas suggests hiring six new positions in the fire department. Roughly $3.4 million will go to ongoing funding to the San Jose Police Department for 41 sworn positions — though the city is having trouble filling its vacancies today.
While the pizzeria owner won’t need to increase his prices much, big-ticket items like TVs and cars will have San Jose shoppers digging deeper into their wallets. Buying a $25,000 2017 Toyota Prius will now run you about $2,250 in taxes, including an extra $63 from the new quarter-cent tax.
But Mike Bresee, a sales representative at Crow’s Auto Sales in San Jose, said people just need to deal with it.
“Nobody wants to pay taxes and everyone complains about it,” Bresee said. “But that’s just the way it is. If you don’t like it, you move out.”
Current sales tax rates in Santa Clara County
San Jose: 8.75%
Sunnyvale: 8.75%
Santa Clara: 8.75%
Palo Alto: 8.75%
Mountain View: 8.75%
Milpitas: 8.75%
Cupertino: 8.75%
Gilroy: 8.75%
Los Altos: 8.75%
Campbell: 9%
Morgan Hill: 8.75%
Monte Sereno: 8.75%
Los Gatos: 8.75%
Saratoga: 8.75%
Los Altos Hills: 8.75%
