Divvying up the Deficit

There’s one thing that everyone in city government agrees on—the deficit is growing. It now stands at $96.4 million, the worst it’s been since the dotcom bust, and there seems to be no end in sight as it inches ahead to the $100 million milestone.

Last night, the City Council voted 10-1 to share the burden more or less equally between three distinct sectors. Inevitably, the taxpayer is up there on the frontlines, with several new taxes proposed. A quarter-cent sales tax could raise $33 million, hiking the business tax could add $13 million, and a parking lot tax might raise $4.5 million. Together, that comes to $50.5 million—well over one third. It remains for the city to decide which additional taxes its citizens can absorb.

An additional third is supposed to be covered by “operational efficiencies and restructuring.” This leaves one question: After nine years of budget deficits, are city operations still inefficient to the tune of $32 million?

The third sector, city employees, is the most contentious of all. In the past decade, the city has cut its workforce by more than 10 percent. That hasn’t made a dent. City Manager Deb Figone says that in that same time, the average cost per worker ballooned by 64 percent, to $120,418. According to the Mercury News, in that same time the costs of salary and benefits for police and firefighters shot up 78 percent. If they had kept pace with inflation, average costs per worker would have increased by only 18 percent.

Much of the blame goes to pension benefits, which account for more than $38 million in this year’s deficit alone. In a letter to the Mercury News, one resident called this “appallingly shameful,” Another resident suggested that city employees “be put on 401k-type retirement plans like most taxpayers.” Inevitably, the unions reject this.

In a debate over how City Council should conduct its upcoming negotiations with nine of the eleven labor unions, only two councilmembers, Sam Liccardo and Pete Constant, supported Pierluigi Oliverio’s proposal that labor negotiations be conducted publicly, rather than behind closed doors. As local resident Nick Cochran pointed out in his letter to the Merc, “Less than 1 percent of our city’s population … effectively control the city’s ‘spending’ gate.”

Read More at ABC 7.
Read More at the Mercury News


  1. How THICK are our mayor and council?  They keep wanting to raise taxes in a down economy.  DOA!

    Efficiencies are needed.  Work rules for all city employees need to be re-negotiated. No, they need to be changed, unilaterally if necessary.  If the unions balk, hire new people who will work hard for their money. The stranglehold of labor on our city govt. needs to be broken.

    The other day I watched, bemusedly and then pissed off, as a worker in St. James Park hand raked leaves into a pile.  The he took a break to talk to a fellow worker for a while.  Then, to my utter amzement, he spent the next ten minutes re-raking the same pile of leaves into another pile FIVE FEET AWAY!!!!

    Personnel costs dominate the budget.  I doubt this little episode I saw is anecdotal.  I firmly believe this happens throughtout city staff, both blue collar and white collar.

    Until we get an honest days work for an honest days pay, we are BLOODY DOOMED to continue this structural deficit BS.

    • JMO,
      At least you saw someone with a rake! You must live in Willow Glen. I live in D9. The day I see a City worker here at all I’ll probably offer to help them rake to keep them around!

      • No, K., it was St. James Park in DT.  Until a year or so ago they mowed it about once/week with a motorized John Deere type driving mower.  The entire process took less than half a day.

        Then they changed to guys walking with individual power mowers and edgers, and other guys raking leaves by hand.  The process takes more than a full day now.  In any even, it now takes several guys more than one full day to do what one guy did in a half day! 

        Since personnel costs are the big driver of the deficit, why would any responsible government hire more workers to do the same job?

  2. We all know the tired old strategy for the city’s sales tax increase: pick a popular service such as libraries or crossing cards and threaten residents with severe cutbacks or eliminations if the tax measure does not pass.

    Once again our city leaders fail to make the tough choices necessary to reduce the runaway personnel costs at city hall.

    • Yeah, Ms. Figone wanted to eliminate 32 positions….out of 6000+.  And those really wouldn’t be eliminated, since folks with seniority could bid into other positions, perhaps positions on the books but not filled.

      The big issues remain work rules that allow people to loaf half the day and get a full day’s pay, and runaway pension costs.

    • > We all know the tired old strategy for the city’s sales tax increase: pick a popular service such as libraries or crossing cards and threaten residents with severe cutbacks or eliminations if the tax measure does not pass.

      I believe that I once heard a Congress critter refer to this time worn ploy as “the Gold watch”.

      The allusion being that times are so tough that we are being forced to sell off the only thing of value we have left, the family’s heirlooms, i.e. Grandpappy’s gold watch

  3. This is disgusting! Taxpayers not being able to listen to how our money is spent.  What are the unions hiding? Are their negotiation tactics/demands so ridiculous that we can’t handle it? What is the rest of the city council afraid of?  And why does the city have to negotiate with ELEVEN different unions? Are there any plans to outsource more? Like me, I’m sure there are a lot of other taxpayers that have many more questions.

  4. Bob Brownstein, Cindy Chavez and the South Bay Labor Council and their takeover of the San Jose City Council in 1998 are to blame for this. Voters need to get smart and vote out all the SBLC aligned councilmembers.

  5. I say we tell each of the ELEVEN union bosses that the city has set a budget and that they are going to have to deal with one another to see who gets what for the year.
    We can setup an MMA cage down at the Shark Tank and sell tickets, though we might have to share in paying for the medical bills that will ensue with such hard negotiation!
    We will get nowhere until there is complete disclosure of out tax dollars.