SJ faces $96.4 million budget deficit

November 5, 2009 7:06:18 PM PST
San Jose has a big budget problem. A projected $96 million difference between what they've got coming in, and what they've been planning to spend.

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It's the earliest the City Council has ever started working on the next year's budget and it's because San Jose is facing its worst budget deficit since the dot-com bust a decade ago -- $96.4 million.

"The state continues to have bad economic times. That's dragging us down along with the greatly increased pension costs that we have paid in this year due to losses in the market over the past couple of years," said San Jose Mayor Chuck Reed.

Mayor Reed would like to avoid layoffs. He says that leads to reductions in service, so his priority is to go after employee costs.

San Jose has 800 fewer employees than 10 years ago, however, average pay and benefits have gone up 64 percent to an estimated $120,000 per employee.

Pay and benefits for police and fire have risen 78 percent, while their retirement benefits have jumped 174 percent. Employee costs make up 75 percent of the city's budget.

Cindy Chavez, a former vice mayor and now head of the South Bay Labor Council, doesn't want to see city workers become scapegoats.

"All of these people who work for the city of San Jose, they're not the bad guys. They're those people who are providing service every day, and they're giving back. And last year they gave back $6 million. I think they're prepared to give more money this year. They just want to be part of the solution," she said.

San Jose is already planning to add 25 police officers next budget year, while cutting back its crime prevention unit.

Mineta San Jose International Airport is not included in the $96 million budget deficit, but it also will be facing pressure to reduce costs as its revenues fall as a result of fewer flights and a drop in passengers.

San Jose has 11 employee bargaining units. Nine of them have contracts which have already expired or will be expiring in the next few months, giving the city an opportunity to bargain hard for money-saving concessions.

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