Measure W

County Sales Tax

Ordinance

Alameda County Sales Tax Intended for Homelessness Programs

Establishes an additional 0.50% sales tax in Alameda County for 10 years to fund programs for people without housing. 

Vote YES
 

What the Measure Would Do

Measure W would add an additional 0.50% sales tax in Alameda County. The current rate is 9.25%; if the measure passes, the new county rate would be 9.75% (see “The Backstory” for a breakdown of the county’s sales tax). 

Measure W is expected to raise $150 million per year and would expire in 2031. Since it would be a general tax, all of its revenues would be deposited into the county’s General Fund. However, the county intends to use the revenues to fund programs that serve county residents without homes, according to the recommendations of the Home Together 2020 Plan.1 Funded programs would include rapid rehousing, ongoing rental subsidies, expanded emergency shelters and permanent supportive housing in certain cases. The county plans to allocate funding from this measure to cities and unincorporated areas based on their population of people without housing, as determined by the upcoming 2021 Point-in-Time count, but the measure would not legally require the funds to be used in this way.

The measure also would establish a citizen oversight committee, which would review independent audits of the use of the funds and report annually to the Alameda County Board of Supervisors.

The Backstory

Over 8,000 people experience homelessness in Alameda County each night, nearly 80% of whom live on the street, in tents or in vehicles. Homelessness in Alameda County has doubled since 2015.2

In 2008, the Alameda County Board of Supervisors established Everyone Home, a network of county staff, service providers, advocates and policymakers to develop the county’s strategy on ending homelessness. Beginning in 2019, this group engaged with people who have experienced homelessness and with the broader public to develop the Home Together 2020 Plan, which makes policy recommendations based on the geographic distribution of people without homes across the county, on an assessment of the county’s current programs and on modeling the impact of increased resources and interventions over time. The Home Together 2020 Plan calls for significant investment in a number of strategies over five years to bend the curve of homelessness in Alameda County. Measure W is intended to provide funding for these investments. 

The state of California levies a 7.25% sales tax on the retail sale of many goods. Beginning in 1969, the state allowed local governments to levy additional local rates, called Transactions and Use Taxes (TUTs), which must be approved by the voters. Alameda County has created several such TUTs, and the current county rate is 9.25%; several cities, including Hayward and Union City, have passed their own additional increases. Along with San Mateo County, Alameda County’s sales tax rate is the highest in the Bay Area. 

 

Current Alameda County Sales Tax Components

Current Rate

Purpose 

Year Approved

7.25%

Combined State and Local Sales Tax Rate 

1933

0.50%

Bay Area Rapid Transit District 

1970

0.50%

Alameda County Transportation Improvement Authority

2002

0.50%

Alameda County Essential Health Care Services  

2004

0.50%

Alameda County Transportation Commission 

2015

9.25%

 

 

Source: State of California, “Direct Sales and Use Tax Rates,” https://www.cdtfa.ca.gov/formspubs/cdtfa105.pdf
 

This measure was placed on the ballot by a unanimous vote of the Alameda County Board of Supervisors. As a general tax, it requires a simple majority (50% plus one vote) to pass. 

Equity Impacts

Sales taxes are a regressive tool for raising revenue because they levy the same rate on consumers regardless of income. While everyone pays the same tax rate at the register, low-income people end up paying a greater percentage of their income on sales taxes. In fact, recent SPUR research shows that low-income households in the Bay Area pay more than three times as much in sales taxes (as a percentage of income) than those in the top income quintile. 3

Yet, even as an increase in the sales tax will put an uneven burden on lower-income people, the revenues generated by Measure W could help the same communities. Low-income residents and communities of color are disproportionately represented among those without homes in Alameda County. Black and Native American residents are experiencing homelessness at a rate four times greater than the general population.4 By directing resources to homelessness prevention and affordable housing, this measure would likely benefit low-income communities of color. 

Pros

  • The intended use of the funds from this measure would address the growing challenge of homelessness in Alameda County, which has become more urgent during the COVID-19 pandemic. 
  • The plan for Measure W’s funds emerged from an inclusive and data-driven process that has broad support from county officials, and the measure would establish an oversight body to ensure funds are used as intended.
  • Despite their regressive impacts, sales taxes are an effective revenue-raising tool for a large and ongoing need like homelessness services: they raise a lot of money, are generally stable over time and are straightforward to administer. 

Cons

  • The measure includes no provisions that would mitigate the regressive impacts of the tax, such as tax relief to low-income households. 
  • Alameda County faces a $72 million budget deficit as a result of the COVID-19 pandemic. While the county might intend to spend Measure W revenues on homelessness programs, there is no guarantee that the money wouldn’t be diverted to other budgetary needs that ultimately take precedence. 

SPUR's Recommendation

Serving Alameda County’s residents who don’t have homes requires significant collective investment. Particularly in the midst of a public health crisis and at a time of heightened economic insecurity, the county should mobilize resources to prevent homelessness and better serve those living through it. SPUR acknowledges that impacts of Measure W would be disproportionately felt by the lowest-income households in the county, many of whom are already impacted by the COVID-19 pandemic and its economic fallout. We wish Measure W included a provision to create a sales tax rebate for low-income households, and should the measure pass, we urge the county to create such a program. However, the people who would benefit from Measure W’s intended expenditures are also the lowest-income residents of the county, including those without homes and those at risk of homelessness. On balance, the cost of doing nothing to support the county’s efforts on reducing homelessness would be severe, and Measure W is worth supporting. 

Vote YES on OAK Measure W - County Sales Tax
Footnotes 

1. Alameda County, “Home Together 2020 Plan,” https://www.hometogether2020.org/read_the_plan

2. Ibid.

3. SPUR, “Undue Burden: Reforming Bay Area Sales Taxes,” 2020, publication pending

4. See note 1.

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