Santa Clara County’s decision to implement a sales tax increase has been upheld by the California’s Sixth District Court of Appeal, which on Sept. 23 affirmed the county Board of Supervisors’ declaration of an emergency. This ruling invalidates a lawsuit that challenged the county's application of an emergency clause to place Measure A, a five-eighths of a cent sales tax increase, on the ballot as a general tax during a non-general election year.
County leaders had stated that without the tax increase, federal budget cuts would severely impact California’s second largest public hospital system. Measure A passed last November with 57% of voters in favor. This appellate court decision marks a significant victory for the county, though additional legal challenges remain.
County Counsel Tony LoPresti emphasized the importance of the ruling. “This is a major victory for the county of Santa Clara, for the residents who rely on the county for healthcare and other essential safety-net services and for the voters who overwhelmingly supported Measure A,” LoPresti stated. He added that with this legal question addressed, the county is closer to ending what he described as "meritless challenges that threaten the lifesaving services our communities depend on.”
The core of the now-invalidated lawsuit, brought by conservative and libertarian groups, contended that federal spending cuts do not qualify as an emergency, which would legally restrict placing a sales tax vote outside of a general election year. The appellate court judges concluded that the groups did not provide substantial evidence to dispute the county's emergency claim, finding the Board’s determination of emergency "reasonable."
Measure A was designed as a general tax, meaning its spending is not legally restricted to a specific use. This classification requires only a simple majority for voter approval, a lower threshold than the 66.7% needed for special taxes, which legally restrict funds to a specific purpose like hospitals. County leaders have consistently described Measure A as a critical lifeline for their extensive public hospital system.
Brian Holtz, lead plaintiff in the lawsuit and Santa Clara County Libertarian Party secretary, noted that the appellate court decision was anticipated, given that a Santa Clara County Superior Court judge had previously rejected the lawsuit. Holtz expressed plans to consult with his lawyer regarding next steps but indicated he would not want to "clogging up the courts" with further actions. He maintained his belief that the county is not in an emergency, citing the region’s wealth, economic upswing, and the end of the pandemic. Holtz questioned the county's reliance on federal funds, stating, “you shouldn’t have been dependent on those dollars in the first place.”
The federal spending bill passed last summer cut Medicaid funding, known as Medi-Cal in California, by $1 trillion over the next decade. This is the largest cut in the program’s history, resulting in Santa Clara County losing an estimated $1 billion annually and necessitating service reductions and program shrinkage. Half of the patients in the county’s hospital system are covered by Medi-Cal, and one in four of the county’s nearly 2 million residents are enrolled in the program.
The county’s public hospital system serves as a vital safety net for both publicly-insured and uninsured patients in the region. County doctors have cautioned that any hospital cuts would broadly affect the community, as patients losing coverage may turn to emergency departments, leading to delayed critical care and ambulance transports across Bay Area hospitals. Santa Clara County hospitals frequently operate at capacity, contributing to longer wait times for care. The health and hospital system represents the county’s largest budgetary focus and expense.
Despite the recent ruling, Measure A still faces opposition from the Silicon Valley Taxpayers Association in a second lawsuit. This lawsuit is scheduled to be heard on Oct. 16 in Santa Clara County Superior Court and alleges Measure A is invalid because it was placed on a special election ballot last November instead of the general election this November. Revenue from Measure A, projected to be around $330 million annually, remains unavailable until both legal challenges are resolved.
Darcie Green, executive director of the nonprofit Latinas Contra Cancer, affirmed the decision’s importance. “The voters of Santa Clara County already stepped up and said yes to protecting the health and well-being of our community,” Green stated. She added that the decision validates the county's urgent response to the threat to healthcare and the safety net, an urgency she described as "real for the patients and families we serve every day."
