Why Some Politicians Like Bad News

City officials in San Jose have been cooking the books. But instead of exaggerating the city’s financial health in order to justify better services for residents, they are doing just the opposite.

A couple months ago, it came to light that the city was overestimating pension costs for the coming fiscal year by more than $50 million.  Last week, a report by City Manager Debra Figone revealed that the reserve set aside for next year’s budget shortfall had grown to $22 million, which reduces the deficit to just $3 million, but she and Mayor Chuck Reed continue to represent the shortfall as $25 million. Then on Wednesday, NBC Bay Area investigative reporters showed that the Mayor and others had overstated the city’s projected pension costs by $250 million (scroll down to watch the video). 

Why are the Mayor and others bent on exaggerating San Jose's financial problems? 

It is hard for casual observers of City Hall to understand why the Mayor would risk the city’s good credit and undermine his own ability to restore basic city services, but to insiders the answer is clear. The Mayor and his allies want to increase the political power of his office at the expense of the city’s workers. 

At its heart, the debate over San Jose’s pension and budget problems is not about money; it is about power. City workers have offered pension reform and other concessions worth so much that the City could start restoring services now. The Mayor has rejected those concessions. His so-called 'pension reform' ballot measure is a power grab that will decimate the city's workforce and hamstring their ability to bargain with the city in the future.  

The policy of San Jose is not austerity for the sake of recovery, but austerity for the sake of a political agenda. What’s so bad about that?  Aside from the unfairness to cops, firefighters, librarians, and other dedicated city workers, the Mayor’s political agenda is already damaging the city’s ability to deliver essential services.  In addition, the lawsuit that will result if his ballot measure passes could cost the city hundreds of millions of dollars.  Ironically, there is no financial threat to San Jose greater than the Mayor’s ballot measure.

In San Jose, “transparency” is the motto, but things often are not as they seem.  What looks like a money issue is really a power issue, and what looks like fiscal conservatism is really financially reckless.