Campbell officials are asking residents to raise the city’s sales tax in November to the highest rate in Santa Clara County to raise revenue they say is necessary to maintain quality of life.

The Campbell City Council voted unanimously last week to put a half-cent sales tax increase on the ballot. That could raise the tax from 9.375% to 9.875% and generate about $7 million in revenue annually. Just over 50% of the vote is needed to pass the tax. If the tax passes, the city will have the highest sales tax among the county’s municipalities, followed by San Jose and Milpitas at 9.375%. About 60% of voters surveyed by the city said they would vote for the increase. The measure is expected to cost the city $133,000 to put on the ballot.

The money from the tax increase will be used to help stabilize the city as it deals with expected deficits and to fund maintenance of community facilities such as public parks, as well as address aging infrastructure and public safety. The city has identified about $42.4 million in deferred maintenance projects that would be useful over the next five years.

Vice Mayor Sergio Lopez said the city needs the additional funds to maintain the quality of life in Campbell.

“I hope people see the value in this: shared costs and responsibility, but also shared benefits for our entire community,” he told San José Spotlight.

The decision to put a sales tax increase on the ballot came after Campbell faced a deficit of about $4 million in the 2024-25 fiscal year, largely due to factors outside the city’s control, including an annual loss of about $600,000 in sales tax revenue and an annual increase of $1.25 million in pension costs.

The city imposed a hiring freeze on open positions and used some of the remaining funds from the American Rescue Plan to balance the budget, but it expects deficits in the millions of dollars between $1.9 million and $3.9 million for the coming years through 2031, according to its seven-year financial forecast.

Campbell also saw an increase during an election cycle when the city put a quarter-cent sales tax increase on the ballot in 2008. According to election results, about 70.5% of voters approved the increase.

Not everyone supports the possible increase.

Amber Hatzke, owner of Pink Carnation clothing store in downtown Campbell, said she wants the city to consult more with the local business community on decisions that affect them. She said she is not enthusiastic about the possibility of a tax increase, but could support it if the funds were primarily used to promote businesses in the city.

She added that the city is suffering from budget deficits due to business closures.

“I understand why they want to implement this, but I think about how hard it is already to run a small business,” Hatzke told San José Spotlight. “You see the difference in customer traffic or how much people are spending on the economy – it’s quite a lot. So that’s a little disheartening.”

Campbell recently implemented an economic development plan to retain local businesses in town and encourage the opening of new ones.

City Manager Brian Loventhal said he understands businesses’ concerns, but the city doesn’t see customers leaving Campbell to shop in other municipalities because of lower sales taxes there. Other cities in neighboring San Mateo County already charge sales taxes of 9.875% or more.

“It’s more about continuing to make the community viable with all the things we want to do with this partnership, not just supporting businesses alone,” he told San José Spotlight. “It’s about balancing that and quality of life.”

Other cities in the West Valley, including Los Gatos and Cupertino, have decided not to pursue a raise this election cycle.

Barry Shilman, a Campbell resident for 47 years and president of the Downtown Campbell Neighborhood Association, said he would vote for the measure because he believes it makes sense to modernize aging infrastructure, such as City Hall, and to fund traffic safety measures.

The measure would also help the city intensify its housing construction efforts.

“I think it’s time for some modernization in the city, to fix some old problems and bring it up to date,” Shilman told San José Spotlight. “You have to pay for something like that, so I’m willing to pay a little more.”

Contact Annalise Freimarck at (email protected) or follow @annalise_ellen on X, formerly known as Twitter.