SJ mayor delivers the state of the city

January 14, 2009 3:09:57 PM PST
The city that represents the heart of Silicon Valley is bracing for bleak times. Wednesday morning, San Jose Mayor Chuck Reed gave his state of the city address and warned of imminent layoffs and service cuts.

The city's budget shortfall is $60 million and likely growing. But amongst the grim financial picture - there was also talk of improvements in public safety, such as fewer homicides in 2008 and gang violence dropping by more than 20-percent. Still, the economy was at the forefront of this state of the city.

During this 2009 state-of-the-city address, San Jose Mayor Chuck Reed dived right into the top issue challenging the city -- the economy and the general fund budget shortfall of more than $60 million in this coming year.

"$60 million is more than the entire budget of parks, recreation and neighborhood services department. It's more than twice the budget for all of our libraries, and it's three times the size of last year's shortfall," said Mayor Chuck Reed, San Jose.

City revenues are down because of declining property and sales taxes, plus there are significant spending increases, such as the hiring of 25 more police officers and six new and renovated fire stations. So to trim costs, there are plans for city service cuts and layoffs, which are expected as early as February - employees will be cut from the planning department and airport operations first. But the mayor also told the sold-out crowd he's working on solutions for San Jose to pull out of this economic slump.

"Now we can see a new wave of innovation that is changing the way the world produces and uses energy. Will Clean Technology be the next new thing that drives our economy forward?" said Mayor Chuck Reed.

The mayor hopes so - already clean tech companies in San Jose created more than 1,500 jobs last year and the city is offering incentives and trying to facilitate swifter permitting to get more of these companies to establish their base in this heart of Silicon Valley.

The CEO of SunPower, a San Jose-based solar energy company, believes says the city is on the right track for being environmentally-friendly, and boosting revenue.

"The mayor really understands that you need business. It's a tax base and it also creates vibrancy in the community and so he's really reached out to green tech because that's a growth area," said Tom Werner, CEO SunPower.

In addition to growing the clean tech arena, in 2009 the mayor says the city will work to drive more business revenue in downtown San Jose. There are plans to expand the convention center and renovate the civic auditorium. Also, the city is working on becoming a transportation hub, with the help of a new sales tax approved to extend BART to the South Bay.