The Good News: The City has a counter offer from seven out of 11 unions to take a temporary reduction in compensation (by paying more of their pension contribution temporarily on a pre-tax basis). The Not So Good News: The offer is equivalent to $14.6 million of the $118 million deficit, thus layoffs and service cuts are inevitable.

The “Not So Good News” reminds me of what Bob Brownstein said at the meeting I attended about the budget deficit hosted by the labor unions last month: “Layoffs are unavoidable since the deficit is so large.”

The Mercury News editorial board recently offered its opinion on the difficulties surrounding the San Jose Airport.  The city is about to cut the ribbon on a slick new facility, but there’s not enough money to run the place.  “Airport Needs To Study All Options To Cut Costs,” read the headline.  No kidding.

This year, the San Jose City Council is forced to make drastic cuts. Unfortunately, the city of San Jose has had a deficit for the last decade even before the Great Recession. In fact, even without the recession, San Jose’s financial obligations are significantly higher then revenues coming into the city.

As a result current elected officials are left with trade offs often having to pit necessary services against each other. This year the deficit is $118 million. This is more then the entire library, transportation, planning, code enforcement, information technology, city attorney and public works departments combined.

Sometimes when I read the blog responses to my weekly post I feel like my opinion on educational funding issues is in the smallest of minorities. Sometimes I wonder if I am a lone voice in the wilderness. I was quite heartened when I recently read the results of a new survey by the Public Policy Institute of California funded by William and Flora Hewlett Foundation that places my opinion with most of my fellow Californians. I now feel vindicated, but so what?

A joint Mercury News/KGO TV poll indicated that Santa Clara’s Measure J (The 49ers’ Stadium) is likely to pass. Weeks prior, a poll was commissioned to measure the level of support among voters for a baseball stadium indowntown San Jose.

QUESTION: When will some agency or press outlet sanction a poll to ask local residents about their feelings towards breaking the unions’ vice-grip on the delivery of city services? (“Would you support allowing 50 percent of city services to be done by the private sector?”). I’ll bet the “yes” category would approach 90 percent.

California public education is in deep crisis, but more to the point, a huge fiscal crisis. The depth of the lack of funding and its instability due to the economic downturn is unparalleled in my career. There is folk etymology that was popularized by John F. Kennedy that indicated when the word “crisis” is written in Chinese, one character means “danger” and the other means “opportunity.” For the sake of argument let’s say the etymology is true.

Last week I attended evening budget meetings in Districts 3 and 5. The center of our city (District 3) had a high turnout from residents who find great value in community centers. Particularly, the Gardner and Washington Community Centers. Both facilities provide a place to go and where residents can be positively impacted. Classmates and friends of mine from Willow Glen High grew up in the Gardner area, formerly known as “Barrio Horseshoe.” It was a problematic neighborhood with many gang issues.

A poll in the Merc asks readers to vote on which proposed budget cuts they would least like to see. The options include cutting back on the police and fire departments, closing community centers and pools, or cutting funding for Christmas in the Park. It also includes reducing the days that local libraries operate to just three per week.

The latter would be tragic. How many people realize that the San Jose Public Library system ranks Number 1 among the ten biggest cities in the United States—even higher than such famous systems as the New York Public Library.

Do the citizens of San Jose have an advocate on the San Jose City Council?  At times like these I’m not so sure.  When it comes to talking about the San Jose City Government budget and the efforts to close the over $116 million deficit, the focus of debate is not about providing for optimum city service levels, it’s about making payroll.  Seriously, no one is really talking about quality of service, they’re talking about salaries and pensions.  In San Jose, the emphasis is on filling pockets instead of potholes!

Last week, I attended budget meetings in council districts 9 and 10 as well as the labor unions’ budget meeting at the Tully library. The people that attended this meeting were mostly union members and city council staff. It was admitted at the meeting that significant layoffs were inevitable since the deficit is enormous.

Ideas were presented on what money-saving measures could be implemented and what new sources of revenue could be found to balance the $118 million budget gap. Ideas ranged from replacing natural lawns in parks with artificial turf (lower ongoing maintenance costs, but more costly upfront) to turning down the air conditioning at city hall during the summer.

City Manager Debra Figone held a press conference late last night to announce that the San Jose budget deficit, long estimated at $116 million, is the result of an accounting error and a misplaced decimal point. The real deficit is one order of magnitude smaller—just $11.6 million. Figone attributed to the error to the furloughs imposed on city employees: “With fewer employees and less time, no one has gone over the figures until now. It really does make a difference where you put the decimal point in your Excel spreadsheet.”

The City Manager will release the list of proposed cuts to balance the city budget today (March 29). These cuts are based on no concessions from any of the labor unions nor savings gained through outsourcing of janitorial services (among others) to save money.

Money saved from outsourcing could help pay for library hours or the aquatics program, for example. The question of concessions has been out there for months and could be included in the budget. Agreement would need to be reached in early April since layoff notices would start going out April 19. If concessions are made then some of these cuts could be avoided but in lieu of an agreement in hand here are some of the proposed/likely cuts.

Rather than lay off workers due to budgetary constraints, the state decided last year to impose mandatory furloughs, which effectively meant a 15 percent pay cut. These furloughs were overturned yesterday by a Superior Court Judge, Frank Roesch, of Alameda County. Some 70,000 workers at 66 agencies will now be going back to work full time. They account for about one-third of state employees who have been subject to compulsory furloughs for the past year.

At last night’s City Council meeting, Mayor Chuck Reed asked all city employees to accept a 10 percent cut to their salaries. Without this, he said, either 450 workers will have to be laid off, or hours at the city’s parks, libraries, and community centers would be “cut dramatically.” Though some City Councilmembers countered with a sliding scale proposal, the Mayor’s request received the Council’s support by a vote of 8-3. The proposed cut would affect all city workers, including police officers and firefighters.

City Hall Diary
Monday: No Impact Man Film at City Hall
Nearly 300 San Jose residents attended to watch this documentary, which portrays a family that adopts environmentally friendly choices over the course of a year.  For example, they bike instead of driving, buy only locally produced food and give up their television. The main point of the evening was that we do not have to wait for government to mandate behaviors that help the environment but that collectively we as residents can choose to compost, use less electricity, bike vs. drive today, etc..

There seems to be no end in site for San Jose’s budget woes. On Wednesday, city officials announced that because of market losses pension costs for city employees will jump up as much as 43 percent—$60 million—in the coming budget year. This year retirement expenses were $138 million.