FOR IMMEDIATE RELEASE
June 8, 2022
Media Contact:
Rachel Davis, Chief Communications Officer, Office of Mayor Sam Liccardo, rachel.davis@sanjoseca.gov
SAN JOSÉ, CA – Today, Mayor Sam Liccardo announced that for the first time in two decades, San José’s pension and retirement costs are declining. The result: for the first time in anyone’s memory, the City’s budget officials project a balanced budget for the next half-decade. The Mayor revealed this milestone as part of his June Budget Message, released today, outlining his final recommendations and changes to the Proposed Budget for the 2022-2023 fiscal year.
“Our struggles over pension reform–through years of negotiations, ballot measures, and litigation–have yielded an important dividend for our community: our first long-term projections of balanced budgets,” said San José Mayor Sam Liccardo. “We finally have achieved the budgetary stability needed to begin restoring critical city services and addressing homelessness, such as by constructing 1,000 quick-build apartments for unhoused residents, adding police foot patrols to high crime areas and Downtown, and cleaning up our city.”
By 2008, City leaders learned of a $4 billion unfunded liability in retirement costs, requiring rapidly increasing contributions that squeezed all other City spending–forcing layoffs, service cuts, and hiring freezes. The City’s workforce has never fully recovered, and still today, San José has the most thinly-staffed city hall of any big city in the country, with fewer employees than it had two decades ago–and 200,000 more residents to serve.
In 2012, Mayor Chuck Reed and a Council majority voted to put Measure B on the ballot to reduce pension benefits, passing with more than 70% of the vote. Court battles ensued, invalidating a portion of the measure, forcing a deadlock. In 2015, newly-elected Mayor Sam Liccardo and City Council went back to the bargaining table with the City’s 11 unions. Led by the City’s chief negotiator Jennifer Schembri and the City’s bargaining unit representatives, the parties successfully negotiated new pension and retiree benefits for new hires, saving taxpayers $3 billion over the next three decades. Voters then approved Measure F in November of 2016 supplanting the 2012 Measure B. The hard reset of retirement costs could only take effect, however as new employees with more sustainable benefits packages supplanted retiring employees, reducing City pension and healthcare obligations.
With the benefit of budgetary stability, Mayor Liccardo is proposing the several key investments in his proposed budget for the coming year, including:
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Accelerate the Development of Quick-Build Apartments: Mayor proposed funding to accelerate development of quick-build apartment communities, to get 1,000 pandemic-era prefabricated, modular apartments under development by the end of 2022, and to sustain operations of another 300 converted motel rooms for housing.
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Expand the San José Police Department and Establish Walking Patrols: This budget adds funding for twenty more police officers, focused on street outreach and walking patrols in Downtown in high-need neighborhoods. As a result of Mayor Liccardo’s commitment to rebuild the SJPD, the department has grown by more than 220 police officers since 2017.
This budget will continue expanding the impact of programs like San Jose Bridge, employing hundreds of unhoused San Joseans to pick up trash and beautify the city, while getting housing and job training.
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Opening Libraries on Sundays in High-Need Neighborhoods: For the first time in a decade and a half, 13 of San José’s libraries will open to the public in low-resource neighborhoods, in response to popular demand.
Finally, Mayor Liccardo cautioned that preserving San José’s essential services—and growing them in future years—requires saving now and in the future, adding millions to the City’s “rainy day” reserves, to 7.7% of the General Fund.
For more details on the proposed budget for the 2022-23 fiscal year, view the following documents:
The City Council will hold a final public hearing on Monday, June 13, 2022, on the City Manager’s proposed budget. The Mayor’s June Budget Message recommendations will be voted on by Council on Tuesday, June 14, 2022.
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About the City of San José
With more than one million residents, San José comprises the 10th largest city in the United States, and one of its most diverse cities. San José’s transformation into a global innovation center in the heart of Silicon Valley has resulted in the world's greatest concentration of technology talent and development.
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