Some people have called the fact that San Jose will have 9 million dollars more than anticipated a “surplus.” Having this money will allow the city to avoid layoffs and add funding for libraries, as well as anti-gang programs this coming fiscal year. The mayor has called it a 1-percent cushion, because this money came about from last year’s budget action of layoffs and across-the-board pay cuts for all employees.
Having enough money to provide some services does not equate to a “surplus” or a “cushion,” in my opinion. For an analogy, I picture a family with a limited amount money and needing to make certain choices in order to save their house. The family might start off with no longer going out to eat, conserving water and electricity, trimming the food budget even for home cooked meals, prolonging car/house repairs, and avoiding discretionary purchases. But, still their situation gets worse, so maybe they choose to refinance the mortgage and stretch out the term of the loan to lower monthly payments.
The family may pray for better days ahead to make up for the more money they must allocate to interest over the life of the new loan. But, alas the situation worsens again and leads to the sale of major household appliances.
Some time later cash flow improves for the family—but not enough to buy back the appliances, so they must continue washing the dishes by hand, hanging the clothes out to dry and are limited in what they can cook without an oven.
However, there is some extra money that they may choose to either save towards repurchasing the appliances, or they can spend the money on dining out—it is immediate gratification and less expensive than the appliances.
This is similar to San Jose, in that our surplus/cushion amount of money cannot buy back all the positions that have been laid off since that number is significantly higher than cash on hand. Therefore, the city simply has less options with less resources, much like our family hanging onto the house while their lifestyle has drastically changed due to the loss of the household appliances.
Perhaps the family income increases by good fortune or working harder, and hopefully so do the revenues of San Jose … or not. Clearly “not” is the case for the state of California, because the budget deficit has grown from 9 billion to 16 billion. Both at the city and state level, it seems impossible to make a down payment on the big ticket items that are deemed the most important.
