Jennifer Maguire, San Jose’s budget director, has worked for the city for for 18 years, and says she has never seen anything this bad. And she is not hopeful that things will improve fast. “Most economists are predicting a slow recovery,” she said ruefully.
Maguire addressed the City Council as it prepared to vote on the 2009-2010 budget. Within the hour, the Council would unanimously approve Mayor Chuck Reed’s Budget Message, as well as the Operating and Capital Budgets. But leading up to the unanimous decision, which closed an $84.2 million shortfall, Maguire was one of many local leaders who adopted a solemn tone while making dire predictions.
Reed began the discussion by reeling off a list of losses that the state would be handing down to the city, from cutbacks in public safety grants to reductions in state sales tax revenues, totaling $58 million. He then reminded the council that just yesterday, it was reported that the city’s own sales tax revenues are down by 30 percent, adding $9 million to the deficit.
Introducing the vote on his Budget Message—the narrative describing the numbers in the actual budget—he re-stated, for probably the hundredth time, his hope that the city will “get through this together by sharing the pain.” He thanked the bargaining units that have handled the negotiations with the city’s unions, and then expressed hope that “next year things won’t be as bad as we fear.”
Councilmember Sam Liccardo continued the theme. “There’s no such thing as a good budget in times like these,” he said, calling the one on the table “only the best among a list of alternatives.”
Councilmember Pete Constant called on his colleagues to change the city’s budgeting process.
“By next year, we will gave cut a half-billion dollars from our budget, total, over the past eight years,” he said. “We have trimmed all of the fat, and are getting near the vital organs. We came dangerously close to them this year.
“It’s been an illusion that we have control of our budget. I don’t really think we do.”
There were two pieces of good news to offset the gloom. The first came in the form of federal stimulus dollars that will help the city pursue some overdue infrastructure improvements despite the hard times. The second came from a special election in which the city’s hoteliers approved an expansion of the city’s convention center—which is projected to add $80 million to the city’s coffers in the form of direct business and bed-tax revenues.
Scott Knies of the Downtown Association made a valiant effort to elevate the mood in the Council Chambers. “This is a great time,” he said smiling. “Let’s celebrate a little bit!” Nobody in the room responded.