Should Milpitas voters approve Measure K? (November 3, 2026 ballot)

What's this about?

People disagree about whether Milpitas should pass Measure K on the Nov. 3, 2026, ballot.

The plan would change the city’s business tax and raise about $3 million each year.

What supporters say

• The tax would charge firms, not people’s homes or paychecks, so most folks would not pay it right away.
• The plan would fix a tax system that has stayed much the same for about 50 years.
• The plan would give the city a steady flow of money for safety, clean streets, and city work.

What critics say

• Firms may pass the cost to people through higher prices, lower pay, or fewer jobs.
• Money for the city’s main fund does not promise better city work or more aid for each area.
• A tax on total sales, not profit, may hurt firms that earn only a small amount.

How to read this

The number of points on each side does not show who is right; the strength of the proof matters more.

Milpitas voters will decide on Nov. 3, 2026, whether to approve Measure K, which would update the city’s business-tax system and raise an estimated $3 million a year. The measure offers a recurring source of local revenue, but its effects on businesses, households and city services remain uncertain.

The case for

Measure K would replace a business-tax system that is about 50 years old. City materials say the current structure can leave some smaller businesses paying substantially more per employee than larger companies. The proposed system would use flat rates along with a tax based partly on gross receipts, or total revenue, to address that imbalance. Official sources support the city’s explanation, although the fairness calculations have not been independently verified. 1

The measure would also provide recurring local revenue for the city’s general fund. Official ballot materials estimate collections of about $3 million annually, with possible uses including fiscal stability, neighborhood safety and cleanliness. Unlike a one-time grant, a continuing revenue stream could give city leaders more flexibility when planning future budgets. 2

The tax would legally be imposed on businesses, not directly on residents. That may make it more attractive than a broad household tax, such as a parcel or consumption tax, because it would not charge every resident directly. In that narrow sense, the measure could be viewed as more progressive. 3

Still, that distinction does not settle who would ultimately bear the cost. Businesses may respond in different ways depending on their size, industry and profit margins.

The case against

The main concern is the measure’s gross-receipts component. Because this type of tax is based on revenue rather than profit, it can affect companies with narrow margins even when they are not earning much. Tax-policy research warns that it can also cause “tax pyramiding,” in which the tax is passed through several stages of production, and may influence business decisions. Measure K would apply gross-receipts rates of 0.025% to 0.035% to larger businesses, but the available evidence does not show how many Milpitas firms would face serious hardship. 4

Residents could also feel indirect effects. Businesses might pass some costs on through higher prices, lower wages, reduced investment, changes in suppliers or higher rents. Government and institutional analyses support the possibility of such pass-through, but they do not establish its size, timing or effect on Milpitas households. 5

Another concern is accountability. Measure K’s revenue would go into the general fund rather than being reserved for a specific program. That would give the city flexibility, but it would not guarantee improvements in safety, cleanliness or neighborhood maintenance. Voters cannot determine from the $3 million estimate alone how much money would reach those services. 6

The estimate itself is official, but it is not guaranteed. Collections could change with business turnover, economic conditions, compliance and administrative costs. The available materials do not independently forecast the measure’s effects on business closures, relocation, employment, investment or consumer prices.

The largest gap is the lack of an independent, Milpitas-specific study. No reviewed source quantifies the businesses affected by industry or profit margin, estimates likely pass-through to consumers and workers, or measures how the tax might change business decisions. The available research on local taxes and economic development is mixed and depends heavily on local conditions.