San Jose Mayor Chuck Reed calls it the “toughest” budget year in city history, and residents are poised to feel the brunt of a new city budget in July with potentially fewer police and firefighters on the street, library hours pared to three days a week and other services reduced.
“It’s clear that this is the toughest year we’ve ever seen, and it’s the most difficult budget we’ve ever seen in the history of San Jose,” Reed said at a budget study session on May 10.
City leaders must close a $118.5 million budget deficit by July 1, which recently rose from $116 million because of reduced development fees collection. Roughly $63 million of the deficit would be slashed if the unions that represent the city’s 6,600 employees agree to a 10 percent pay cut. As of May 10, a bargaining unit of the city’s top managers had taken a 5 percent pay cut and was expected to take another 5 percent cut, city manager Debra Figone said.
City leaders can force the terms of a “last, best and final offer” on union contracts that are set to expire, but many contracts of the city’s 11 bargaining units are not due for renewal, and union leaders have not agreed to open talks. Management has the right to lay off employees outright, but seniority rules of “bumping” mean that laid-off workers can take lower positions until the least senior staff member is ultimately laid off.
Laying off 960 of the city’s 6,623 employees would leave 5,663 employees—the level of staff the city had in 1989—while the city population has grown nearly 30 percent. Losing city staff means losing police and firefighters, librarians and people who maintain parks and roads.
Even if pay and benefit concessions were reached among all the employee unions, the city would still face a deficit of more than $55 million.
To close that gap, the city manager’s office proposed on May 3 to use $9.5 million from the Healthy Neighborhoods Venture Fund. The fund had distributed money from a tobacco company settlement to fund Silicon Valley nonprofit groups that had provided programs such as gang prevention and services for the blind. Many other cities that receive tobacco money simply dump it in their general fund.
San Jose leaders also have proposed raising revenue by hiking the city sales tax by a quarter- or half-cent, but that would have to be approved by voters on the November ballot.
Mercury News
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