Willow Glen Resident

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Less money for city libraries, parks a consequence of real estate slump

By Eli Segall

A dip in San Jose home sales could mean fewer library supplies and less park maintenance funding set aside in the 2007-08 city budget, according to the proposed operating budget released this month.

The construction and conveyance tax, generated from real estate transactions, is projected to drop from $34 million to $27 million next year. Most of the fund, 64 percent, goes toward park capital projects and maintenance; 14 percent buys library books and supplies; the rest supports fire station maintenance and equipment and other capital projects.

Reduced C & C funds mean fewer new parks and new facilities, said San Jose budget director Larry Lisenbee.

"It fits in with the city's overall economic situation," Lisenbee said. "We're having a heck of a time finding enough general fund money to maintain the parks we have."

The city, bracing for a five-year string of budget shortfalls, held 18 budget study sessions between May 7 and May 17.

The C & C fund is characterized by peaks and valleys. In 1992-93, it generated $9.2 million; nine years later, it jumped to $31.6 million; two years after that, it fell to $24.8 million, according to city figures. Lisenbee described a graph of its revenue history as "the Matterhorn."

"It's one of the more volatile funds," he said.

The tax is pegged to real estate purchases; 98 percent of the fund comes from a one-time fee--0.3 percent of the property's value--from new homeowners. Funds are down because San Jose homes are staying on the market longer--up from 43 days on average in March 2006 compared to 62 days on average one year later--and overall home sales are down 24 percent since last summer, Lisenbee said.

"Prices have reached a current high, and consumers are saying that's more than a house is worth," said Gary Marsh, a spokesman for Alain Pinel Realtors. Marsh estimated home sales are down 30 percent from May 2006 throughout all of Santa Clara County.

Budget problems are not unique to the C & C fund. Roughly $370 million is needed to bring San Jose's transit infrastructure up to an acceptable level; the police want nearly 600 more personnel over the next five years, and the city manager has proposed 15 new officers next year. The parks department has lost 23 maintenance workers since 1998 due to budget cuts.

Mayor Chuck Reed and nearly every top city official chose more funding for parks, pools and libraries among their Top 5 priorities at a budget forum in February.

The city's proposed $3.23 billion budget is scheduled for adoption on June 19.