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There's an old fable I remember from my childhood about a monkey trying to get a grape contained in a glass jar. He sees the grape and decides that it would be better in his mouth than in the jar. He puts his hand in the jar and clutches the grape; however he can no longer extract his hand from the jar because his grasping hand that contains the grape is now too big to pass through the neck of the jar. He's faced with the dilemma of having to decide whether to continue to clutch the grape which he can't eat because he can't extract it, or release the grape, extract his hand and try another way to get to the grape. And so it is with the City of San Jose, California.

As a resident I read an article in the New York Times about the budget issues faced here in San Jose ( It's amazing to me how mainstream media - even the Times - can be so monochrome on an issue that has so many other facets that appear to have been deliberately ignored. Although it would be unbelievably easy to highlight San Jose city government as a primary example of how to squander public wealth, there's no difference whatsoever between this place and any other municipality in this country because of the political hive mind that has been stuck in the neocon mode of business pandering for the last 20 years. It could have been prevented by applying common sense and attention to historical performance of business cycles- but when corporate tax laws were pretty much rendered toothless by conservative arm twisting in state houses all over the country, local governments were doomed to financial ruin.

The incessant republican whine of "Taxes on business are too high!" forced city governments into the position of being "competitive" in order to retain jobs and attempt to preemptively stabilize a perceived exodus to other locations. So when a huge, successful local networking research and development corporation started to make noises about moving to a hot, humid anti-government enclave somewhere in the southern midwest with crumbling infrastructure and a fundamentalist education system because they'll pay next to nothing in taxes and the wage base there is below the poverty line (read: the possibility of insanely huge margins that no executive boardroom can ignore)  local government immediately launched into the "court and spark" mode. A favorite carrot hung on the end of the proverbial stick is to defer or drastically reduce business and/or property taxes temporarily, indefinitely or eliminate them altogether in order to bribe these already wealthy businesses to stay put. The idea is to then shift the tax burden onto residential home owners who watch their taxes go through the roof... Proposition 13 notwithstanding. And what do they use for workarounds without going through the customary legislative processes to levy taxes? The same tools Romney used as Massachusetts governor: fees and assessments for everything short of charging fees for breathing city air: city services rate increases, anything short of holding you up at gunpoint in front of City Hall to empty your pockets. For example the City of San Jose recently passed a law which allows them to obtain garbage collection fees through biannual property tax assessments. That one really smells of Romneyism because it means that the city will be able to pocket the wages of a half-dozen low-wage billing jobs that will be eliminated while enabling them to engage in uncontested rate creep. Meanwhile as interest due on municipal loans compounds from deferred payments and revenue dries up from all those tax concessions, so do services to the community.

The long-term effect on the direction for future municipal decision-making like this had been set long before even the old Susan Hammer days when the economy thrived here  - before Carly Fiorina arrived to destroy HP, before Meg Whitman built a bank within eBay with minimal intervention from the FDIC and tried to buy the governor's mansion, and the Wall Street Journal occupied itself with writing Apple's obituary every other week. To be sure, the kind of arm twisting that went on behind closed doors resulting in ridiculously generous fully-funded retirement benefits for law enforcement and other local government employees surely relied on the notion that prosperity would never go away... but it did. It's a cyclical thing that caught everyone all over the country with their pants down at their knees. In addition, making city and state workers ineligible for Social Security in lieu of union-negotiated retirement benefits was yet another in a long line of ideas based on financial tunnel vision that amplified the one component of  human nature that we've kept since our ancestors tried to get at that grape- greed. It had the same effect of privatizing pensions that it did on privatizing prisons... But again, as usual, nobody was paying attention.

Consequently the decomposing effects of a "rust belt" mentality has begun to set in on our community that used to have the lowest crime rate of any large city in the U.S.- upticks in marauding gang violence and activities, graffiti, home invasion robberies, suicides, skyrocketing murder rates. With fewer police on the streets due to "austerity" brought on by foolish decisions and  "good ol' boy" handshake agreements behind closed doors, it's like leaving the lids off garbage cans so that the vermin can feast. And now the entire community gets to suffer so that a few short-sighted, greedy people can fatten their portfolios and take our money with them when they've finished sucking the teat dry and eventually leave.

So what are San Jose city fathers doing about it right now? Well, all those unoccupied commercial buildings that are empty because of the stigma that neocons have placed on corporate taxation - and many have remained unoccupied since the Dot Com bust of 2001 - are being leveled. Instead of finding ways to fill those empty buildings with tax paying employees who would spend their wages locally and create their own kind of wealth - a stable community - the geniuses in City Hall have created a new cottage industry for local demolition crews who now go around the city destroying whole city blocks of empty buildings that once contained board stuffers, engineers and support staff. Piles of ground up concrete from the walls of tilt- up slab construction have given way to ....high density condos. That's right. They're betting the farm on that old Property Tax Gambit to give them an exit route out of the circular firing squad they've created for us.

The trouble is that nobody is saying where all those people who are supposed to buy these condos are going to come from, what they're going to do to come up with mortgage payments and property taxes, or where they're going to be employed. They can't possibly bring that many H1b visa workers into the state without Homeland Security going ballistic. But I'm sure that plan is being worked out in a posh board room somewhere... and a final executive decision will have to be made about getting at that damned grape by breaking the jar as all the other monkeys have done - or simply turning it upside down.

Originally posted to Anakai on Tue Sep 24, 2013 at 09:24 AM PDT.

Also republished by California politics and Community Spotlight.

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Comment Preferences

  •  It's a complicated problem and I sure as hell.... (9+ / 0-)

    ... don't know the answer.

    But I do see empty building after empty building on the North First Street corridor that are crying to be filled. Office space that has sat empty since 2002 or 2009, or whenever.

    Since the city cannot raise property taxes on businesses, when the likes of Adobe and Yahoo and eBay are on prime property, it just guarantees a failing system.

    The story mentions the pension issues that are adding to the problem, with police officers able to collect 90% of their very good salaries after a certain time in the job.

    Sweet deal there, and I don't deny the dangers job that police have, a job that should be well rewarded. And if you've been promised such benefits, the city needs to keep its word and pay those benefits.

    But where's the money going to come from? Until the city fills those empty buildings with workers who can pay local property and sales taxes, and until Proposition 13 is modified to allow easier tax increases on businesses, there's nowhere to go but down.

    Habit of eating have been found increased in people, they just need a sitting place where they can finish their hunger. -- spammer pauldavis 8/21/13

    by Senor Unoball on Tue Sep 24, 2013 at 09:56:29 AM PDT

    •  You get it. Thanks! So take a drive... (5+ / 0-)

      over to that intersection on Montague where Trade Zone and McCandless intersect. That place used to be full of medium-sized businsses. Where are the people that are supposed to fill those 6 floor condos going to come from? Haiti?

      It's sheer lunacy the way this place is being managed, and nobody from Guv'nor Moonbeam on down has the slightest clue... including the conservatives from the Central Valley who claim to be all about "jobs".


      •  Well... (2+ / 0-)
        Recommended by:
        Senor Unoball, Larsstephens

        .....I work in Palo Alto on not a great salary for this area and I'm paying $1650 a month in Burlingame for a 1 BR apartment (which is cheap for that area). I would definitely consider one of those condos if they were low enough, and if there are no people to take them it seems like that might occur. Of course, that's just me.

        Misconduct by the government is by definition NOT a government secret.

        by Doug in SF on Tue Sep 24, 2013 at 04:51:16 PM PDT

        [ Parent ]

        •  We're in Sunnyvale (2+ / 0-)
          Recommended by:
          Senor Unoball, Larsstephens

          paying about $1500 for a 1BR -- fortunately Mr. Scribe has a decent pension from VTA so we're doing okay. Too many of those new housing developments are in transit dead zones, though, so for those who either don't, can't or choose not to drive, we're pretty much stuck. (I've been looking at real estate for if/when the day comes when we have the wherewithal, though I'd really love to get out of the state and away from family -- long story.)

          There's only one rule that I know of, babies -- goddammit, you've got to be kind. -- Kurt Vonnegut

          by Cali Scribe on Tue Sep 24, 2013 at 08:43:02 PM PDT

          [ Parent ]

    •  I've always wondered how dangerous being (4+ / 0-)
      Recommended by:
      Senor Unoball, jabney, Sparhawk, hmi

      a cop really is. It's hard to say anymore, most cops that are killed are killed in routine automobile accidents - not surprising since they spend so much time driving. I certainly don't think they are in the top 10 or even top 20 most dangerous jobs in the US. In fact, because the police have no legal responsibility to protect citizens, they can turn around and run, wait for backup, or not even intervene in a situation (this is a fact that has in front of the SCOTUS numerous times). Now we are seeing police falling back on immediate use of force in situations - tase first and ask questions later. Shoot the dogs and then see what's happening. They are not being paid to take risks. After all, it costs the city money to put a cop on disability, so they pass the cost back onto the citizens who are injured in what should be a routine police encounter.

      "You can die for Freedom, you just can't exercise it"

      by shmuelman on Tue Sep 24, 2013 at 03:54:39 PM PDT

      [ Parent ]

  •  Good question indeed (11+ / 0-)

    Sacramento is just as culpable in what's happening in San Jose as San Jose is. We have a supermajority in both houses of the legislature, godammit, and somebody (is it our governor, perhaps?) doesn't want to use it to dismantle Prop 13, at least the provision about the legislative hurdle to change tax rates.

    But yes, workers making a living wage is the solution to this. All over the state, in fact.

    Seneca Falls, Selma, Stonewall

    by Dave in Northridge on Tue Sep 24, 2013 at 10:54:53 AM PDT

  •  Most Cities and States screwed by austerity (3+ / 0-)

    NYT is totally blind to the attack on government at state and local level.

    Part of the reason is NYC (and Wall Street) of done rather well thru the recession

  •  I've been down on the San Jose city govt (2+ / 0-)
    Recommended by:
    lunacat, Senor Unoball

    ever since they built a palacial city hall for themselves in the depths of what was a pretty significant downturn for the tech industry.

    The garbage fee stuff is small potatoes by comparison. But it is annoying. They will save a little because fewer humans will be needed, but it will cost them in the short run because they need to spend money to re-work their billing systems. In the end there is little savings and the payback period is long.

    •  It might be small potatos (0+ / 0-)

      But it speaks volumes about this crop of politicians and their contempt for middle class people in this community that's still trying to recover from the worst economic climate since the depression.

      And as far as that monument to self importance they built for themselves on Santa Clara St., I agree. It sends a clear message to everyone living here that isn't a mover, shaker or power broker in this valley: "We own your pathetic, ignorant ass, so get over it."

  •  same here in LA (1+ / 0-)
    Recommended by:
    Senor Unoball

      It's the banks doing the same scam with commercial & condos (that they can't sell that end up expensive apts.) with new investors from China and new money from emerging countries. They think what a deal, they don't realize the US doesn't have the population spurring that growth.
       The SICKEST thing is they build these LIVING spaces right on the busiest streets. THE CRIMINALS!

    March AGAINST monsatanOHagentorange 3/25/13 a time warp

    by 3rock on Tue Sep 24, 2013 at 08:40:12 PM PDT

    •  I wouldn't mind them being (1+ / 0-)
      Recommended by:
      Senor Unoball

      on busy streets, if those streets were busy with public transit. But they just end up adding to the existing traffic as it's impossible to get anywhere without a car, and those streets aren't usually bicycle-friendly either.

      What makes sense is to build housing alongside existing infrastructure; Mountain View has done it with development adjacent to the San Antonio and Downtown Mountain View Caltrain stations, and San Jose is doing a decent job with condo developments as part of the downtown revitalization, right there by transit, shopping and entertainment options. But it's not done enough, or too many people think they need the house with yard for the American Dream. Mr. Scribe and I never had kids; we'd be fine with a nice little 2-3BR condo right by transit, enough room to get the computer out of the living room and to give me some space for my crafts or a guest room for friends (maybe both, if I put in a fold-out couch).

      There's only one rule that I know of, babies -- goddammit, you've got to be kind. -- Kurt Vonnegut

      by Cali Scribe on Tue Sep 24, 2013 at 08:56:38 PM PDT

      [ Parent ]

      •  I (0+ / 0-)

         don't know what San Jose's wind weather is like. New York is next to the sea. S.F.'s beauty and comfort is the wind blows. You have no idea these box right next to the sidewalk of the busiest streets. Not downtown, here in the "NEW" Hollywood. This is LA. Stuffy a lot of the time. There should be a STATEWIDE LAW, apts. have to set so far back. 50 feet would be my preference.

        March AGAINST monsatanOHagentorange 3/25/13 a time warp

        by 3rock on Tue Sep 24, 2013 at 09:51:48 PM PDT

        [ Parent ]

  •  The board-stuffers are all in China now, and... (3+ / 0-)
    Recommended by:
    Anakai, Senor Unoball, bobinson

    ...few of the engineers and support staff remain stateside. But still, a good architect could figure out a way to subdivide those tilt-ups into units for small manufacturing-warehouse outfits.

    “It is useless to attempt to reason a man out of a thing
    he was never reasoned into” - Jonathan Swift

    by jjohnjj on Tue Sep 24, 2013 at 09:40:19 PM PDT

  •  Dear San Jose, (2+ / 0-)
    Recommended by:
    jabney, mkor7

      If there is not a new Church committee. FISA abolished. NSA dismantled & localized state by state, NO brilliant new gen tech is going to come to America where their emails and investment ideas can be read by the corporate 1 %.
       Good Luck with a lot of effin empty NEW buildings.

    March AGAINST monsatanOHagentorange 3/25/13 a time warp

    by 3rock on Tue Sep 24, 2013 at 09:56:35 PM PDT

  •  What a Waste (0+ / 0-)

    The least they could do is scrape those buildings down to the topsoil (maybe some is still there) and turn them back into farms. They paved over some of the best farm land in the U.S. The least they could do is restore a bit of it.

    •  Interesting observation- (2+ / 0-)
      Recommended by:
      milkbone, Liberal Thinking

      My wife is one of a very few actual natives I've known who was born and raised here. When she was a young girl she used to earn money for things like clothes and bicycles by picking apricots for 25 cents a flat. Occasionally when we've been driving around here she'd point out some locations where there used to be a cherry farm, an apricot ranch or another large ag planting. I can still see the sadness in her eyes sometimes when we're out doing errands and she points out another area that's now covered with abandoned commercial real estate.

      Yours is a good idea in a world of clear thinking - some world far away from this one.

      •  I've Since Moved Away (0+ / 0-)

        But when I moved there in 1983, you could still see the lights on in the greenhouses when you went over the bridge in Sunnyvale. The whole area out near 237 and 1st street was acres of farms. Olsen's still had a cherry orchard in downtown Sunnyvale, right practically across from City Hall.

        And that was after many years of paving over farm land and tilting up one and two story buildings.

        It used to be (literally) The Valley of Heart's Desire. But the same thing that made it the home of the jolly green giant brought in the masses.* I think it's great that we got all the people and all the success of Silicon Valley, but I wish they'd had a little better urban planning. And, the foresight to join BART.

        *Well, that and the universities, and then the feedback loop of growth.

  •  "H1b visa workers into the state without Homeland (0+ / 0-)

    Security going ballistic."

    Is that really a consideration? I've heard things about the "H1B backlash," and that companies are starting to discover that sending work and support functions halfway around the globe to people whose English isn't always good may not have been such a great idea. OTOH, I was forwarded an email from some joker who made it clear that the rate he was offering, $45/hr, was non-negotiable. And some company in TX wanted perm employees, but wasn't offering relocation reimbursement. Kind of suggests the market for cheap labor hasn't cooled down much.

  •  Mayor Chuck Reed is a Republican (0+ / 0-)

    If he's not, he governs like one. He came into office and immediately went after city employees pay and pensions. Too bad Cindy Chavez lost the Mayoral election by a hair. Chavez is probably one of the best union supporters of any candidate anywhere. I predict that in 10 years, she will be well known in state politics.

    i just baptized andrew breitbart into the church of islam, planned parenthood, the girl scouts and three teachers unions. - @blainecapatch

    by bobinson on Wed Sep 25, 2013 at 07:49:05 AM PDT

  •  Private businesses pay all taxes (1+ / 0-)
    Recommended by:

    Every dollar of tax revenue that San Jose brings in (whether residential property, business, income, sales, or whatever) comes in because a private company (or someone like the defense department, who is just a dollar sunk to some other city) is doing business in the city or nearby.

    The city needs to be competitive and make itself as attractive as possible to business. I don't think this is a bug, I think it's a feature. However, my opinion is irrelevant because that's the current state of affairs.

    This fact is not incompatible with progressive ideas, however. It's just a realization that local and state resources must be allocated effectively and carefully.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Wed Sep 25, 2013 at 09:42:24 AM PDT

    •  Huh? (1+ / 0-)
      Recommended by:

      Private business pays all of the taxes?  Every dollar that San Jose brings in, whether through ...residential taxes, income or sales taxes are paid for through private business?  This makes absolutely no sense and I honestly shouldn't event waste my time responding, but I will...

      Residential property taxes, are, by their nature, paid for by private citizens.  Most (if not all) sales taxes are likely paid for by citizens... The complaint of the diarist is that income taxes are NOT in fact being paid by private business.

      State and municipalities being competitive isn't really the issue (as pointed out by the diarist).  Its the way that the alleged competitiveness manifests itself-through a race to the bottom with local governments providing massive subsidies to businesses that in turn provide barely living wages to the massess.  Resources are not being allocated efficiently if the companies that are using public resources (like, roads, water, sewer, public and life safety) are actually paying for them, but instead, are having their use thereof subsidized by everyone else.

      •  Re (0+ / 0-)
        Residential property taxes, are, by their nature, paid for by private citizens.  
        Private citizens who get paid by...? If your friendly local corporation leaves, their jobs go with it and so do their property taxes. No corporation means no property taxes.
        The complaint of the diarist is that income taxes are NOT in fact being paid by private business.
        Except they are, for the same reason. All dollars entering a local budget from any source originated with local private activity. None of that means no money, no police, no fire, no mayor, nothing.
        Resources are not being allocated efficiently if the companies that are using public resources (like, roads, water, sewer, public and life safety) are actually paying for them, but instead, are having their use thereof subsidized by everyone else.
        By definition, business pays for all the things you mention. A subsidy is just taking money from one business and giving it to another.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Wed Sep 25, 2013 at 11:32:18 AM PDT

        [ Parent ]

        •  Your assertion has the appearance of being correct (0+ / 0-)

          ... but your logic is bass-ackwards because of one single word in your missive, above:

          "By definition, business pays for all the things you mention."

          It is not defined by it - it is a COMPONENT of it. As your position stands, it infers that all a business has to do is set up shop at a location, hire people, let them work and pay taxes on their income and property and the business in question has then completed its entire fiduciary responsibility to the community.

          If that's what "market solutions" and "free enterprise" is supposed to be by today's definition, then give me democratic socialism. NOW.

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