SJ considers new taxes to avoid fiscal emergency

February 17, 2010 6:24:52 AM PST
San Jose is considering new taxes and other revenue makers to avoid a fiscal emergency. The city is facing major layoffs -- ones that directly affect public safety.

'We need your help to balance the budget or else' -- that's the message coming from city officials trying to figure out how to close a $100 million deficit.

The council says the choices are clear, increase taxes or make huge cuts to public services, including the police and fire departments. The solution -- council proposes a couple new tax measures. One that would affect all residents is a proposed quarter-cent sales tax that would go on the November ballot and raise about $30 million.

The other is a tax increase on the city's two card rooms, Garden City and Bay 101. If approved, this possible June ballot measure could gather about $5 million from gambling profits.

Aside from new taxes, the city's plan includes boosting efficiency, like outsourcing more work and selling off its money-losing golf courses. Even the city's 11 employee unions have been asked to agree to a five percent cut in compensation, but none so far have accepted the request.

The Bay Area's biggest city is facing its ninth straight year of budget shortfalls, and if it cannot cut labor costs and raise new revenues, then San Jose's budget director says service cuts and layoffs will happen, even in public safety.

In total, the city may have to cut 550 of its 6,500 jobs; police would lose 140 sworn positions, mostly in patrol. The fire department staff would also lose staff. Plus, 88 fulltime library jobs may have to go, reducing branch hours almost by half.

The budget deficit has some council members suggesting the city consider declare a fiscal emergency, which would allow the city to bypass policies like living wage requirements that get in the way of reducing costs. The city's proposed budget is due out in May.