City Manager Debra Figone held a press conference late last night to announce that the San Jose budget deficit, long estimated at $116 million, is the result of an accounting error and a misplaced decimal point. The real deficit is one order of magnitude smaller—just $11.6 million. Figone attributed to the error to the furloughs imposed on city employees: “With fewer employees and less time, no one has gone over the figures until now. It really does make a difference where you put the decimal point in your Excel spreadsheet.”
Mayor Chuck Reed, who could not attend the press conference, responded with the following statement: “It is a huge relief to have this burden taken off the city. This will allow us to proceed with many of our most cherished projects, and ensure San Jose’s growth and development over the next decade.”
The good news was greeted by calls from interest groups across the board, suggesting how the windfall might be spent. The teachers union demanded that all pink slips be withdrawn. Police and fire department representatives demanded a 15 percent raise, and threatened to strike if they did not receive it. Meanwhile, Councilmember Pete Constant called on the city to declare a tax holiday for the next two years to attract new businesses. Councilmember Pierluigi Oliverio suggested that the city consider subsidizing medical marijuana instead of taxing it.
There is also no news as yet whether the sudden windfall would be gobbled up by state officials in Sacramento, looking to ease their own budget woes. According to Sacramento insiders, however, Governor Arnold Schwarzenegger has instructed state officials to pore over the state budget to see if a similar error was made there.
Read More at the San Jose News and World Report.