San Jose City Manager Debra Figone unveiled her proposed budget for the 2011-12 fiscal year on Monday, and the forecast is grim.
With a projected shortfall of $115.2 million, Figone’s budget says 588 city positions will likely need to be eliminated when compared to a year ago, which comes out to roughly 10 percent less workers (This is somewhat misleading though, Figone notes, because an agreement was reached to employ 62 police officers for one year after last year’s budget was adopted.)
Of the 588 jobs to be eliminated, 370 workers would be subject to layoffs. These numbers come under the assumption that the city will get all 11 labor unions to agree to an ongoing 10 percent cut in total compensation for city workers.
The elimination of positions includes: 195 positions in the police department; 64 positions in the fire department; 72 positions in the library department as well as limiting libraries to being open three days per week; and 182 in the parks and rec department. An additional 446 workers will be moved to different positions through the seniority/bumping process, including a number of who will move into lower-paying positions. Part-time workers will also be eliminated.
A doomsday scenario would be if the city cannot come to agreement with the six remaining unions on ongoing compensation cuts. If no agreement is reached, 156 more police officers could be laid off as well as 290 non-public safety employees.
Figone’s budget attributes the shortfall to a number of factors, but since 2000-2001, she writes, “the average cost per employee has risen 101%, while revenues increased by only 29%.”
Mayor Chuck Reed’s office put out a statement following the release of the budget: “San Jose is facing its most difficult fiscal situation ever. Closing this gap will have a drastic impact on the services that residents depend on every day from police and fire, to libraries and community services – and the situation could get worse.
“The City Manager’s budget proposal is built on the idea of shared sacrifice: 10 percent cuts in total compensation from all employees (based on 2009-2010 salary levels) to avoid cuts in services and some layoffs. However, many of our largest unions have not yet come forward to share the pain. If they don’t, San Jose faces even greater cuts that will decimate services to our residents. San Jose employees work hard and are committed to serving the residents of this great city. In times like these, we must pull together to save services and jobs.
“We cannot continue to cut services and layoff employees year after year. We must attack the root causes of our structural budget deficit so we can restore police and fire services, libraries and community centers. As bad as it is, San Jose’s situation could get worse if retirement costs aren’t brought under control. Retirement costs are the largest single driving factor of our structural budget deficit. By 2015, San Jose is projected to be paying $400 million a year to cover the cost for commitments made to our employees and retirees – and that’s the optimistic scenario. It’s bad, and it could be worse. It’s time for Fiscal Reform.”