Surplus or Cushion or Neither

Some people have called the fact that San Jose will have 9 million dollars more than anticipated a “surplus.” Having this money will allow the city to avoid layoffs and add funding for libraries, as well as anti-gang programs this coming fiscal year. The mayor has called it a 1-percent cushion, because this money came about from last year’s budget action of layoffs and across-the-board pay cuts for all employees.

Having enough money to provide some services does not equate to a “surplus” or a “cushion,” in my opinion. For an analogy, I picture a family with a limited amount money and needing to make certain choices in order to save their house. The family might start off with no longer going out to eat, conserving water and electricity, trimming the food budget even for home cooked meals, prolonging car/house repairs, and avoiding discretionary purchases. But, still their situation gets worse, so maybe they choose to refinance the mortgage and stretch out the term of the loan to lower monthly payments.

The family may pray for better days ahead to make up for the more money they must allocate to interest over the life of the new loan. But, alas the situation worsens again and leads to the sale of major household appliances.

Some time later cash flow improves for the family—but not enough to buy back the appliances, so they must continue washing the dishes by hand, hanging the clothes out to dry and are limited in what they can cook without an oven.

However, there is some extra money that they may choose to either save towards repurchasing the appliances, or they can spend the money on dining out—it is immediate gratification and less expensive than the appliances.

This is similar to San Jose, in that our surplus/cushion amount of money cannot buy back all the positions that have been laid off since that number is significantly higher than cash on hand. Therefore, the city simply has less options with less resources, much like our family hanging onto the house while their lifestyle has drastically changed due to the loss of the household appliances.

Perhaps the family income increases by good fortune or working harder, and hopefully so do the revenues of San Jose … or not. Clearly “not” is the case for the state of California, because the budget deficit has grown from 9 billion to 16 billion. Both at the city and state level, it seems impossible to make a down payment on the big ticket items that are deemed the most important.


  1. Mr. Oliverio,

    You’re leaving something out of your household budget analogy.  This family has millions of dollars available in special accounts, designated for things like a private landing strip behind their house, refurbishing the homes and landscaping of poor neighbors, supporting dozens of non-profits, lending money to low-income friends at very low interest so they can buy houses of their own, providing free lunches for others, and this list could go on.

    Here are three analogous examples of the City’s spending:
    1.  $797 million annually is set aside for the airport.  I thought the airport was supposed to be self-sufficient.
    2.  $152 million annually to provide financial assistance to individuals for home purchases and rehabilitations
—Achieve success with “Destination: Home,” a program that provides services and financial assistance to the homeless and those at-risk of homelessness.
    3.  $410 million annually budgeted for “other.”  How specifically is the “other” money being spent?

    Just adding up these three examples comes to $1.36 billion each year!  And we’re arguing over the pension problem of less than $300 million over five years?

    The City of San Jose only designates 33% of their total annual budget of 2.8 billion (with a B) toward the general fund.  This is a very low number compared to other cities of similar size.  Increasing that percentage by 5% would completely solve the general fund budget problem.  “But that would mean the City charter would have to be amended.”  With some limitation, what the Council has built, the Council can tear down.  The Council doesn’t seem to have a problem with drafting ballot measures, as long as they’re politically expedient.

    San Jose needs to get its priorities straight.

  2. This is NOT a SURPLUS!!!! Its ALL OF THE PAY CUTS FROM ALLLLLL OF the City of San Jose workers. Its Families LIVELIHOODS and BLOOD MONEY!!! Thats what its really called!Its taken from the College funding for our kids, PG&E bills, Morgages,San Jose Water bills (but why pay that if the City doesn’t have to pay their bills/commitments).

  3. The dirty uncle of this family is then discovered to have stolen millions of family dollars over the good years and the bad and hidden that money under his mattress. He then watches the family struggle while he secretly eats out in restaurants and tells his pal the bank loan officer to keep up the pressure because soon he will be able to buy he house in foreclosure.
    Now, you figure out who the dirty uncle is. Yes, the dirty uncle is always the one that does all the unspeakable acts,

    Truth is stranger than fiction.

  4. P.O.,
    I don’t think you can compare the budget of a family to that of the City, State, or County. Government agencies receive grants, tax revenues, funds from permits, licenses, etc., and monetary breaks families don’t. Government agencies don’t budget well, and they are known for notoriously overspending tax dollars of hard working families on things we do not need.

    When I do my budget, I know where every cent of my money goes, and believe me, I’d know if I had an extra 9 million laying around long before I cut my budget for much needed things like appliances.

    My point? Why did you cut back services and lay people off when you had this extra 9 million dollars in the coffers? Answer: Because you don’t budget correctly, and you didn’t know it was there in the first place. Why is that?

    Every time I turn around I hear that we need to lay people off, cut services, pay for legal consultants, a costly ballot measure that will end up in court costing millions of TAX dollars to defend if it passes, when all along you keep finding millions of dollars hidden in the City’s coffers? This whole thing makes NO sense to me…This is tax payer’s money so why is it being hide from us?

  5. “Perhaps the family income increases by good fortune or working harder…” Wow, I bet they never thought of that.  I bet they’re out buying lottery tickets now with their windfall.  What’s Measure B?  Hard work or good fortune?

  6. Right now I have $15 cash in my pocket.. I won’t give a dollar amount, but I owe way more than that on my mortgage.

    Do I have a $15 surplus?  What about when my daughter is on summer vacation, and I’m not paying $100@week at the pump, does that mean I have a $1200 surplus at the end of summer?

    Not really…

    4,000,000,000 RDA debts

    If we started paying that off with the surplus we have now, we’re looking at 400 years before the RDA loans are paid off.

    We’ve already killed most commissions and city run social programs.  We’ve had paycuts across the board, and a lot of basic city services aren’t even getting by with the budget/staff they have anymore.

    Even after all that cutting, we still have some ways to go.  400 YEARS?  That’s like, my children, their children, and the children to come for the next 20 generations. 

    I’ve had to do a lot of thinking about this lately… Unless we have another tech boom to re-create a surplus, what other options are there for getting that paid off in time for my great grandchildren?

    Hate to say it… Hate to actually agree with PLO on something… Maybe we do need a stadium.  Bunch of minimum wage workers shuffling out cheap food/drink at overinflated prices?  1sqft (1 seat) going for $100@sqft?  Not even the parking lot can do that.

    Thing is though I’d like to see it built out at Alviso.  I’d like to see a restored marina, bigger/better than before. Not that it ever would happen, but it would be kind of cool if we could create our own version of Venice out there, complete with canals and condo’s.

    San Jose might be more attractive to international tourists if we actually had some kind of nice waterfront.

  7. Nice analogy, comparing the government’s behavior to the family’s. Let’s see how this comparison works in reality:

    When deciding how many children to have, my family took into account its revenue stream (income) and infrastructure (house size). When deciding how many poor children to educate, families to serve, and foreign criminals to incarcerate, our leaders in government, including Chuck Reed, took into account only the number of votes they might garner from the Hispanic community, then announced to all of Latin America, “Bienvenidos.”

    When deciding what constitutes academic progress in our children, my family took into account traditional standards and individual differences in ability, with an emphasis on effort and accountability. When confronting the same issue, our government has treated standards as disposable, individual differences in ability as a racist concept, and effort and accountability as condemnable artifacts of an unfair, Eurocentric system.

    When deciding what to do with the occasional financial windfall (a bonus, inheritance, or investment payoff), my family turned its attention to the future, in respect for the uncertainty it bodes, before ever considering any elective expenditures. Our leaders in the government, on the other hand, have blown every financial windfall (and there have been many) on buying votes through corruption, pandering, and divisive partisanship.

    Things in my house are fine, Mr. Oliverio. Despite its share of setbacks, my family doesn’t owe a dime and has enough money to take care of its needs, and then some. Of course, we don’t own a bunch of garish monuments or lavish, mortgaged-to-the-hilt buildings, and haven’t bought the tens of thousands of “friends” that you politicians have; but then, our family Rolodex isn’t filled with leaches, losers, and professional liars.

  8. Remember we voted SF Giants down before!.  It wil happen again for the A’s!  Too much money when we cannot even open libraries and support public safety, and the city wants to spend millions on roads and buying land for a ball park that will not come. 

    PLEASE!  Out of control spending and you want to punish dedicated city workers!

  9. Pierluigi,

    Why is the council using a one time surplus to open four libraries and a community center that will create recurring costs for years to come?  The city can barely afford to keep the current libraries open.

  10. PO,
    a couple of questions:
    1 – you stated:  IN “1984”, my good where were you then, we gave up pay raises to buy into this crap!

    “If unions had agreed to pay a little something towards the unfunded liability when they agreed to a 50-50 split in 1984, we would not face the peril of running out of funds to pay for retiree health care”. I PAID FOR 29 YEARS, AND NO THERE IS NO FREE MEDICAL, WANT MT W-2, OVER 4K LAST YEAR WITH NO MAJOR MEDICAL PROBLEMS.

    2 – So you have a little extra money! Why are you spending this money on BS projects?

    At tomorrows Council meeting, our pro-business Council will likely vote to expend tens of thousands of scarce general fund dollars to shut down part of a downtown street to enlarge a “large traffic island” into an expanded park.

    This waste of taxpayer money, strongly supported by downtown’s Councilmember Sam Liccardo, will eliminate 23 parking spaces on South First Street, negatively impacting all of the businesses in the area—causing a loss of jobs and forcing customers to hunt for scarce parking.  WHERE IS SCOTT KNEIS ON THIS?

    In all, the plan is to authorize the City Manager to spend nearly $100,000 at a time when even Mayor Reed’s allies are scrambling to find more money to restore police services:  OR BUILD A BALL PARK!

    Now Vice Mayor Madison Nguyen, who is fed up with the [homeless] encampments near her Communications Hill home, is proposing to find a way to restore the funding cut from the police department’s budget earlier this year to reinstate patrols near camps in hopes of stopping drug use, burglaries. prostitution and even violent crimes.  YOU CANNOT USE POLICE RESOURCES TO DETERMINE WHERE THEY WILL BE DEPLOYED!!!  ILLEGAL ACTIVITIES ARE GOING ON EVERYWHERE AND YOU WANT TO PROTECT YOUR HOME?

    “So residents can feel a little bit safer,” Nguyen said. “They are concerned that illegal activities are going on.”  SO ARE THE REST OF US!

    This is exactly why the council is out of control, from Measure B to your own little neighborhood.  This is why the city, state and country is in such a mess. TOO MANY PERSONAL AGENDAS!

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