San Jose adopts mayor’s budget plan amid calls for more funding

In his first major test as mayor, Matt Mahan won unanimous support for his budget plan — but not before his critics had their say.

Mahan and the city council dug into his March budget message on Tuesday — a roadmap that will shape the city’s budget for the next fiscal year. The document is one of the most important responsibilities a San Jose mayor faces and it shapes how city dollars will be spent to tackle San Jose’s biggest woes – homelessness and blight, public safety and economic recovery. Mahan called his plan a “back to basics” approach. 

In the 33-page plan, the mayor calls for increasing spending to build 500 more temporary homes for the homeless, hiring 30 additional police officers, investing in more technology to improve efficiency and hiring incentives to fill hundreds of vacancies across city departments like planning and police. He plans to scale back pandemic-era programs as federal dollars run out, but no specific cuts have been announced yet.

Several councilmembers and dozens of advocates called for Mahan to prioritize struggling families by continuing small business grants, youth programs and eviction support, as well as restoring libraries to pre-pandemic hours and focusing on wage theft enforcement.

“I’m comfortable with the aspirations and all of the recommendations but I would strongly recommend that we frame all of these as things for staff to explore and cost rather than giving final budget directions here today, (and waiting until) we fully understand the costs and trade-offs,” Mahan said during the meeting.

Mahan enters budget season with a handful of economic troubles – a looming recession, the winding down of millions in federal stimulus dollars and a tax base that is generally smaller than comparable cities. While San Jose is expected to see a $30 million surplus, the dollars are expected to dwindle over the next few years, according to a city analysis.

To prepare for the downturn, Mahan plans to scale back of some pandemic-era services funded through federal stimulus programs like the American Rescue Program Act. Those funds helped pay for food distribution, rent relief and eviction prevention, small business grants, childcare programs and efforts to close the digital divide. What will be cut hasn’t been determined.

Budget Director Jim Shannon said there will have to be trade-offs when federal dollars run out.

Councilmembers Peter Ortiz, Arjun Batra, Dev Davis, Omar Torres and Bien Doan called on Mahan to allocate dollars for library services, after school and childcare programs and expanding Project Hope. The councilmembers also want Mahan to fund a sexual assault analyst in the police department and more traffic enforcement officers.

“My office introduced what I believe is a people first oriented budget memo,” Ortiz said. “To support the working families (here), including our most vulnerable residents.”

Ortiz requested $375,000 to extend the city proposed pilot program for targeted wage theft enforcement, continue funding an eviction help center, more dollars for shelter services and funding for various cultural centers. Dozens of residents called in to support his requests.

Doan said he’d like to see funding allocated to the Vietnamese Heritage Garden — an unkept promise by the city for more than 30 years. Councilmember Domingo Candelas asked for funding to restore and clean Lake Cunningham, fund affordable housing projects in the pipeline and invest in more youth programs.

“The budget message focuses on public safety,” Candelas said. “Recreational programs are the best investment to prevent our youth from ending up in the system, and in the worst case, on the streets.”

Despite a barrage of funding requests, Councilmember Pam Foley applauded the mayor’s plan for focusing on retaining city staff. The budget plan forecasts no layoffs or furloughs. To help fill job vacancies and retain city employees, Mahan proposed removing the college degree requirement for city staff to be promoted or hired.

“We have a very small staff. We need a larger staff,” Foley said. “We need to show them that they’re respected. We need to pay them well, we need to retain them and promote them, as possible.”

Foley also supported Mahan’s plans to protect mobile homes and additional funding for Vision Zero, a program designed to eliminate traffic deaths.

A controversial part of Mahan’s budget plan calls for “no encampment zones” which prohibit homeless residents from camping in unsafe or economically significant parts of the city. A team of trauma-informed specialists within the San Jose Police Department would enforce those zones.

Mahan was also criticized by residents and some councilmembers like David Cohen for a proposal to use Measure E dollars, a property transfer tax approved by voters in 2020 to support affordable housing, to build a mental health facility. Many residents said this is a misuse of Measure E funds, especially as San Jose critically needs more affordable housing.

“We need to decriminalize homelessness, poverty and disability,” said District 10 resident Sandra Asher. “While we desperately need more mental health beds and substance abuse treatment, the mayor’s proposal to spend Measure E money to help the county build a mental health jail heads in the total opposite direction and takes money away from affordable housing. Where is the common sense in that?”

The mayor’s budget message approved Tuesday is the first step in a months-long process. Next, the city manager will release an operating budget in May and the council will give its final blessing and adopt a budget in June.