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.”