San Jose 2010

This is a big year for the City of San Jose and its future. The City faces a $100 million budget deficit. Mayor Reed and the rest of the council will have to pull the proverbial rabbit out of a hat. Unfortunately, things may get worse before they get any better. Truth is, there’s no rabbit…there may not even be a hat!

Earlier this week, KLIV Radio reported on the current conditions of the commercial real estate market in Silicon Valley. According to researchers at CB Richard Ellis, around 43 million square feet of office space is currently available in Silicon Valley, the equivalent of 15 Empire State Buildings! “Analysts say local office foreclosures will double in 2010 as property owners struggle to fill that space with companies willing to pay appropriate prices.” That can’t be good.

San Jose’s greatest problem however, is the high labor costs for its many thousands of current and former employees. It’s a big problem at every level of government. In a recent column, former Mayor Willie Brown outlined the issue perfectly:

“If we as a state want to make a new year’s resolution, I suggest taking a look at the California we have created. From our out-of-sync tax system to our out of control civil service, it’s time for politicians to begin an honest dialogue about what we’ve become. Take the civil service. Over the years…the civil service system has changed from one that protects jobs to one that runs the show.

“The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life. But we politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers.

“Talking about this is politically unpopular and potentially even career suicide for most officeholders. But at some point, someone is going to have to get honest about the fact that 80 percent of the state, county and city budget deficits are due to employee costs. Either we do something about it at the ballot box, or a judge will do something about it in Bankruptcy court. And if you think I’m kidding, just look at Vallejo.”

If Willie Brown is right, what is San Jose as a city and a people going to do about it?

19 Comments

  1. > This is a big year for the City of San Jose and its future. The City faces a $100 million budget deficit.

    The state of Illinois got hundreds of millions of dollars from the federal government for converting an unused prison into a maximum security center for Guantanamo detainees.  Why not ask Senator Di Fi or Barbara Bouncer to get four or five hundred million from Obama to convert Agnews or the old city hall to a Maximum Civil Rights Protection Facility and Spa for misunderstood middle eastern community organizers who are victims of American anti-Islamic bigotry.

    New York City is demanding four hundred million dollars from the feds for providing security for the trials of the Guantanamo detainees.  Why doesn’t San Jose demand the right to put a detainee or two on trial so it can get its rightful share of federal security dollars?

    Do I have to do all the thinking around here?

  2. How about the creative minds on the 18th floor really thinking outside the box? Do we really need a full-time council? How about a part-time council that only meets every other week or once a month? Lots of dollars could be saved and how many citizens would notice a difference? It won’t solve the deficit but it would save money and might even increase efficiency in the city. Justa thought.

    • The council budget for 2009-2010 is a whopping $8.2M. Eliminating them would do virtually nothing for the deficit.

      Better than 2/3 of the spending is employee salaries and benefits. Unfortunately, solving a $100M budget hole will have to affect the employees somehow.

      • > The council budget for 2009-2010 is a whopping $8.2M. Eliminating them would do virtually nothing for the deficit.

        I walk a block past Starbucks to get a senior coffee at McDonalds for fifty cents instead of $1.60 at Starbucks.

        When I go to City Hall to get a permit to build a fence (two permits, actually) I note that the bureaucrats luxuriate in their Class A+ office space and dine in a wonderful, tastefully decorated, and abundantly provisioned cafeteria, with multiple selections of (taxpayer subsidized) designer coffees.

        But it’s only fair.  After all, the bureaucrats are hardworking public “servants” who only want the best for the community. And I’m just a greedy businessman selfishly trying to steer another $1.10 into my pocket.  Who can begrudge the bureaucrats a lousy $8.2 million bucks.

        • You have no idea what you are talking about. there is no cafeteria in city hall. employees aren’t even provided with drinking water let alone designer coffees. get a life.

        • > there is no cafeteria in city hall.

          WHAT!!!  Can this be true?

          The old city hall had a cafeteria.

          You mean the dumb clucks built a NEW $650 million city hall WITHOUT a cafeteria?

          We got screwed even more than I imagined.

          Our poor underpaid and overworked public servants are also UNDERNOURISHED!!!

          This is an absolute crime!  Someone should tell the President.

      • $8.2 million is virtually nothing? Wow, I wish I had virtually nothing because it is much more than I have now.

  3. San Jose would be in good shape if we hadn’t spent $650 million dollars on a new city hall we did not need. Also, business is fleeing not only this area, but California, because of the over regulation of local and state government. Cut the regulation, reduce fees and taxes, and it would increase spending in the state. Those that work for the city are not all to blame.

  4. Does anyone really know where our taxes are being spent?

    San Jose city budget looks great until you read it and realize NO one including Council and Mayor really knows where our taxes are going

    WHY AFTER ALMOST 10 YEARS OF BUDGET DEFICITS HASN’T COUNCIL SET REAL BUDGET PRIORITIES AND MEASURABLE PERFORMANCE STANDARDS ? 

    Every city cost or service is top budget priority with special interest groups ( mismanaged non profits, sports teams , corporations,  developers ) asking Council who can’t say NO for millions tax dollars while cutting city services

    • > Does anyone really know where our taxes are being spent?

      Well, apparently $400 million federal taxpayer dollars will be spent to provide security for the show trials of Guantanamo detainees in New York City.

      This, after Obama has basically said that the alleged perps are guilty and will be convicted.

      Now, I’ve never gone to Harvard or been a community organizer, but it seems to me that a good hard whack on the back of the head with a nightstick might save a few hundred million.

      But it’s just taxpayer money.

      • Article by Greg Knapp:

        If you needed another reason to be against trying KSM and his band of merry maniacal Islamists in NYC, here it is.

        New York City projects it will cost more than $400 million to provide security if the pre-trial preparation and trial of the suspects in the Sept. 11 terror attacks if it takes two years, which insiders say is virtually certain, according to New York City Mayor Michael Bloomberg.

        It will cost another $206 million annually if the trial runs beyond two years, which some fear is possible, the mayor’s office estimates.

        There may be some who think this is a Great way to make the liberal elites on the upper west side put their money where their mouth is when it comes to giving terrorists the same rights guaranteed to American citizens under the U.S. constitution, but, of course, we will ALL have to pay for this.

        Security is expected to include the closure of many streets around the court house, a very heavy uniformed police presence, snipers, heavy weapons teams, undercover police officers and a massive federal and local intelligence and counter terror operation.

        Senator Charles) Schumer (D) released a statement today saying, “Not a nickel of these costs should be borne by New York taxpayers, because terrorism is a federal responsibility and this is a federal trial. I will do everything I can to see that the federal government fully owns up to its responsibility.”

        Money isn’t the main reason trying these terrorists in civilian courts is a bad idea. It’s not even in the top five. But it is one MORE reason the decision by President Obama and AG Eric Holder should be reversed. Most Americans want them tried in military courts.

        This is a complete waste of our money and it would set a precedent for ALL terrorists who perpetrate acts of war on us to be tried in civilian courts. How can we justify “minor league” terrorists facing military tribunals if the 9-11 plotters get full access to our civilian system with the right to remain silent, three hots and a cot and a microphone to the world?

        This is obviously the way Obama plans to deal with terrorists who attack America. Look at how we are charging Umar Farouk Abdulmutallab. If he’s convicted he only faces life in prison. Wow.

        The good news is we are still killing the bad guys over there who are plotting and carrying out terrorist attacks.

        So, Obama’s approach seems to be kill terrorists overseas without a trial, but terrorists who attack innocent civilians on American soil get constitutional rights. And, of course, we lose the right to interrogate for actionable intelligence that could save countless American lives.

        Great plan.

        Not to worry, we’re going to start using full body scanners. Whoops.

        Well, the bomb sniffing dogs are foolproof. Whoops. Maybe we should start focussing on finding the terrorists instead of finding their weapons.

  5. > But we politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers.
    “Talking about this is politically unpopular and potentially even career suicide for most officeholders. But at some point, someone is going to have to get honest about the fact that 80 percent of the state, county and city budget deficits are due to employee costs.

    If you as a politician know what the problem is, and if you also know that advocating a real solution is career suicide, then why not draft a ballot initiative that imposes a real solution, put on your best “Deep Throat” disguise, arrange a rendezvous with a Howard Jarvis Taxpayers Association operative in Cesar Chavez park, and stuff the draft initiative in his rolled up newspaper.

    Just a thought.

  6. Investment grows the economy through a multiplier effect.  But if you do it poorly its like pissing on a forest fire, its gone and you can barely note its effect (other than you probably burned up by getting to close.)

    Part of the barrier to economic growth is the shortfalls in our educational feeder system.  At the same time that many are looking for ways to retrain and retool for new jobs, community colleges, CSU and UC campuses are cutting offerings and raising fees.  There’s a direct linkage between biotech clustering and proximity to CC and CSU campuses.  Of course proximity to major research universities is important, but you can always pay what it takes to get those PhD’s.  The shortfall is with biology majors with AS and BS degrees who can work in the labs.

    This is just one industry.  There are many others.  Why don’t we partner and produce what’s needed, when and where its needed.  I’d rather see a bond measure to raise $1 billion statewide for targeted partnerships than another public works boondoggle.  Let companies describe their needs with their checkbooks and make the program tied to matching public with private dollars.  Build in incentives for innovations that can grow business and industry in California (and not just be patented and then produced oversees and sold back to us.)

    The City of San Jose suffers from the fact that they bet too heavily on sustained economic growth and cashed in on it during a good run (1990-99) with some foolish hiring binges and real wage increases that far exceeded inflation.  In a smaller, less political city, a strong manager would have reigned in the tax and spend politicians who only had to perform for 8 years before handing reigns over to the next batch of stair climbing professional politicians.  The system of checks and balances were removed in the strong mayor system reforms.  If we really wanted to go that direction, we probably should have annexed Sunnyvale, Santa Clara, Cupertino and Campbell and done a combined City and County government.  It wouldn’t have worked any better, but at least it’d be clearer who did what and we might have some economies of scale (HR, etc.)

    I still think smaller is better and city departments should all be run like enterprises tied to performance and have to bid on their own job functions or have it outsourced if they can’t competitively and competently deliver.