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12 Attachment A Historical Summary of Support for Sales Tax Ballot Measures 2009 to 2016 Change in Support for a Ballot Measure Enacting a One-Quarter Percent Sales Tax from 2009 to 2016 (Results among Likely Voters) Percentage (%) Vote July 2011 May July 2013 Nov Feb July 2014 Nov Feb Definitely yes Probably yes Lean yes TOTAL YES Definitely no Probably no Lean no TOTAL NO UNDECIDED Change in Support for a Ballot Measure Enacting a One-Half Percent Sales Tax from 2010 to 2016 (Results among Likely Voters) Percentage (%) Vote 2010 July 2011 May July 2013 Nov Feb Feb Definitely yes Probably yes Lean yes TOTAL YES Definitely no Probably no Lean no TOTAL NO UNDECIDED Differences in Support between One-Quarter and One-Half Sales Tax Measures (Results among Likely Voters) Percentage YES (%) Amount 2010 July 2011 May July 2013 Nov Feb Feb One-Quarter Cent One-Half Cent Difference

13 Attachment A Historical Summary of Support for Sales Tax Ballot Measures 2009 to 2016 Support for General Purpose One-Quarter Percent Sales Tax Support for General Purpose One-Half Percent Sales Tax One-Half Percent and One-Quarter Percent Since 2010

14 ATTACHMENT B TO: FROM: City Manager Norberto Dueñas City of San José David Metz, Curtis Below & Miranda Everitt Fairbank, Maslin, Maullin, Metz & Associates Catherine Lew & Jennifer Longley The Lew Edwards Group RE: Summary Findings from Recent Surveys Assessing a Potential City of San José General Purpose Sales Tax Measure DATE: February 26, 2016 Fairbank, Maslin, Maullin, Metz & Associates (FM3) in consultation with the Lew Edwards Group (LEG) recently completed three telephone surveys (November 2015, January 2106, and February 2016) with San José voters likely to participate in the June 2016 primary election. 1 The surveys primary goals were to test the electoral viability of a one-quarter or one-half percent, general purpose sales tax measure. A one-quarter percent measure was tested in all three surveys, and a one-half percent measure was tested in the January and February 2016 surveys. Overall, the surveys all found majority support for both measures results consistent with past surveys conducted since 2009 with slightly more support for a one-quarter percent measure. Additionally, in the February 2016 survey, different measure terms were tested 9 years, 15 years and no sunset as was a three-eighths percent sales tax option. (The November 2015 and January 2016 surveys only tested 9-year sunsets.) BALLOT LANGUAGE TESTED In each survey, respondents were read a hypothetical, ballot description and asked to indicate how they would vote on the measure. 1 The language shown on the following page contains all of the different combinations that were tested in at least one of the surveys. 1 Revenue estimates for a one-quarter percent sales tax were revised after the November 2015 survey from $38 to $40 million per year.

15 Page 2 Hypothetical General Purpose Sales Tax Measure Ballot Language San José Local City Services Measure. To fund local city services such as improving police response to violent crimes, burglaries, and other safety needs; improving 911, emergency medical and fire response times; repairing potholes and streets; maintaining city parks; expanding gang prevention programs; and creating jobs through economic development, shall the City of San José enact a (one-quarter/three-eighths/one-half) percent sales tax for (9 years/15 years/on an ongoing basis), providing about ($40/$60/$80) million annually, requiring Independent Citizens Oversight with public review of spending, and all revenues controlled locally? SUPPORT FOR A ONE-QUARTER OR ONE-HALF PERCENT SALES TAX In the most recent three surveys, 62, 61 and 60 percent of respondents indicated they would vote yes for a one-quarter percent measure. These surveys mark the 12 th, 13 th and 14 th times since 2009 that the City has asked voters about their willingness to support a one-quarter percent general purpose sales tax measure. Though these surveys tested slightly different variations of the hypothetical ballot language and looked at different modeled electorates San José voters have responded rather consistently to a potential one-quarter percent sales tax throughout the years. As shown in Figure 1, support has consistently been around 60 percent and exceeded the majority-vote threshold required for passing a general purpose sales tax measure, with a high of 70 percent in January 2013 and a low of 54 percent in January FIGURE 1 Support for ¼-Cent General Purpose Sales Tax Measure, 2009 to 2016

16 Page 3 In the most recent two surveys, 57 and 55 percent of respondents indicated they would vote yes for a one-half percent measure. These surveys mark the 9 th and 10 th times since 2010 that the City has asked voters about their willingness to support a one-half percent general purpose sales tax measure. As shown in Figure 2, support for a one-half percent measure has consistently been in the low to mid 50s, with a high of 65 percent in January and a low of 47 percent in January FIGURE 2 Support for ½-Cent General Purpose Sales Tax Measure, 2010 to 2016 Taken together, these historical survey results suggest a majority of voters are open to supporting either a one-quarter or one-half percent, general purpose sales tax measure. However, support for a onequarter percent measure has consistently been greater than for a one-half percent measure, and support for a one-quarter percent measure has generally exceeded the majority vote threshold by more than each surveys margin of sampling error, particularly in recent years, something that cannot be said for a onehalf percent measure. Additionally, in the January 2016 survey, support for a one-half percent measure dropped slightly below the majority vote threshold (49%) after respondents heard arguments both for and against the measure. Consequently, the electoral prospects for a one-quarter percent sales tax measure appear stronger than a one-half percent measure.

17 Page 4 SUPPORT FOR A THREE-EIGHTHS PERCENT SALES TAX In the February 2016 survey, a three-eighths percent sales tax level was also tested, in addition to the one-quarter and one-half percent levels. In aggregate, the three-eighths percent level tested identical to the one-quarter percent level both at 60 percent yes. However, there was modestly more intensity behind the one-quarter percent level (32 percent definitely yes ) than behind the three-eighths percent level (28 percent definitely yes ). Though these differences are within the survey s margin of error, they are consistent with voters expression of some level of price sensitivity when looking at the difference in support between one-quarter and one-half percent sales tax measures. MEASURE TERMS In the February 2016 survey, three different measure terms (or sunsets) 9 years, 15 years and no sunset were tested in two different ways. The first manner in which they were tested was to vary the ballot language heard by respondents, with one-third hearing each different term. In this first assessment, 57 indicated they would vote yes for a measure with a 9-year sunset, 62 percent for a measure with a 15- year sunset, and 56 percent for a measure without a sunset. In the second assessment, respondents were asked more explicitly about the terms and whether they would be more or less likely to support a measure with each. As shown in Figure 3, respondents were much less likely to support a measure without a sunset and modestly less likely to support one with a 15-year sunset. Taken together, these results suggest that when presented with ballot language for a general purpose sales tax measure, voters may not focus much on the term of the measure. However, if it is made explicit to them, voters do favor a measure with a shorter term, particularly in comparison to a measure without a sunset. FIGURE 3 The Impact of Different Measure Term Lengths Term Continuing the sales tax on an ongoing basis, with no end date Limiting the sales tax to no more than fifteen years Limiting the sales tax to no more than nine years More Likely to Support Less Likely to Support No Difference 20% 67% 14% 35% 46% 19% 53% 28% 19% Overall, these findings suggest voters attitudes towards a general purpose sales tax measure have been remarkably consistent and durable over the years, and that a measure establishing one-quarter percent sales tax with a sunset would have the greatest viability. While factors outside the City s control and difficult to predict such as the condition of the economy, electoral turnout, community-based yes and no campaigns, etc. would undoubtedly play roles determining the ultimate fate of a measure, these recent surveys confirm that majorities of voters are generally inclined support such a measure.