Voters would have to approve such income tax. Considering they would be the ones affected, the proposition is unlikely to pass.
I doubt it's the income situation though, from the article:
"Visit the main street of Palo Alto, where Stanford and numerous startups are located, and you’ll see dozens of fancy restaurants and stores and may not be able to snag a parking spot among the luxury cars parked there. Castro Street in downtown Mountain View has a slightly more relaxed vibe, with candy stores and book shops and restaurants and bars."
Palo Alto and Mountain View don't collect any income taxes and are subject to the same Prop 13 restrictions as every other city in California.
For San Jose troubles, you'd have to look towards its pension obligations. For a while the pension system for municipal workers allowed the pension to be pro-rated to the last salary mark, not average salary over the years of service.
That does not seem so bad, but the union contracts had a fairly generous allowance for sick days. That does not sound so bad either (who wants to deal with a sick coworker?) but it also allowed unlimited accumulation of those sick days throughout the years of service. At retirement the accumulated sick hours would be paid out pro-rated at last salary mark.
You can see what incentives this provided for city workers (of a fairly large city): never take a sick day, accumulate the maximum amount of them, push for promotions as you're closer to retirement age, retire the week after you get promotion and salary bump.
While it's true Californians pay high effective tax rates, the specific rates you are referring to are the top marginal fed and california rates, not effective rates:
Propery and business tax is almost neglible around here in northern Europe, compared to income tax and vat.