As Milpitas voters choose from a crowded field of mayoral and city council candidates in November, the question of whether the city can shore up a looming multimillion-dollar deficit – and how much of a problem the forecasted deficit is – has risen to the forefront of the debate.
Early this year, city staff forecasted a deficit of over $19 million dollars by 2031, driven primarily by the rising costs of labor and benefits. That prediction followed an even gloomier financial outlook the year before and has sparked efforts by the city to analyze its budget, cut costs and bring in businesses that generate revenue – including change to business taxes appearing on November’s ballot.
This year, the mayor’s seat and two spots on city council are up for grabs. With incumbents running in both the mayor and city council races, the election has the potential to remake the council majority or change only a single seat.
In the mayoral race, three candidates seek to unseat current Mayor Carmen Montano, who was elected as the first Latina to lead the city in 2022. Hon Lien has been on city council since 2022 and opted to challenge Montano rather than run for reelection for her city council seat. With a background in technology, political outsider Santosh Sahoo and Voltaire S. Montemayor, a former geologist and perennial mayoral candidate, round out the field. Montemayor did not respond to requests for an interview.
Milpitas City Council candidates, from top left, Jennie Ha Phan, Bill Chuan, Seema Kanani, Garry Barbadillo, and Dipak Awasthi. (Courtesy Photos)
In the city council race, five candidates contend for two seats as Lien finishes her term and incumbent Garry Barbadillo looks to hold on to his seat. Former planning commissioner Bill Chuan, social worker and labor worker Seema Kanani, planning commissioner Dipak Awasthi and Jennie Ha Phan, who recently retired from a career in finance, join the race against Barbadillo.
Across the board, candidates argued that some mix of cutting costs or bringing in revenue would serve to alleviate any financial woes, but differed on the severity of those woes.
The incumbents in the race acknowledged the importance of improving the budget outlook, but pointed to an improved financial outlook and efforts by city staff that brought the projected shortfall in 2030 down by half compared to last year’s prediction.
The city also expects a recent deal with electric vehicle manufacturer Rivan to bring in $19 million dollars to city coffers over the next eight years, while taxes from other businesses, like an incoming Amazon warehouse, could also help alleviate the deficit. Should the tax reform measure, Measure K, pass, it would add another $3 million in revenue for the city.
Even so, the influx in revenue and the possible tax reform were not factored in to the city’s most recent forecast earlier this year.
“I’m confident that we’ll bring (the deficit) down,” said Mayor Montano, noting that the city hired an economic development director with the goal of bringing small businesses to the city. “We’re doing good so far … We want to close that gap, get closer to balancing the budget.”
Councilmember Lien echoed the sentiment, while adding that she would like to push to speed up the permitting process to help bring more businesses into the city and noting that the turnover of staff made that streamlining difficult.
Barbadillo also lauded the efforts of the city staff to reign in the budget shortfall and pointed to Measure K as another possible balm for the issue. Still, he noted he was “very focused on a balanced budget” to ensure that additional revenue could go to programs to benefit residents of Milpitas.
Many, however, argued that the city must do even more to address budgetary concerns.
Chuan thinks bringing “the right types of businesses that residents want” to “optimize economic growth” in collaboration with the economic development director, help the community grow and improve the quality of life for residents
While all said they would welcome more businesses, some focused on cutting costs. Phan boasted over 40 years working in finance departments, and argued that “there are many areas that you can cut without affecting the workflow of the city.”
Similarly, Awasthi said that he would look “line by line” to find places to save money, though he acknowledged there are many expenses that could not be cut. He added that he was opposed to any new taxes. “Basically, that’s their milking cow,” said Awasthi of taxes. “Why don’t you look at the spending?”
Neither Phan nor Awasthi specified what they would cut when asked by this news organization, but said they would analyze the budget to find what to cut.
For others, the very nature of the budget deficit indicated a lack of transparency by the city.
Kanani – a labor organizer and social worker – noted particular concern about what she considers stagnant wages for fire and police even as the city hires outside consultants for other issues. She maintains that makes it difficult to retain staff and leads to heavy use of overtime in the fire department, increasing costs.
“It always comes down to, ‘no, we can’t give raises’ … It’s always about what we can’t do, as opposed to having a solution-focused mindset,” said Kanani.
Sahoo, a businessman in tech, went further in his critiques. “They’re just manipulating the numbers to make it look nice,” he said. “A lot of these issues are fixable, but you know the current leadership doesn’t want to address that. They would rather focus on their political aspirations.”
City staff argue that in Milpitas – as in many local governments – revenue has not kept up with rising costs, especially of labor and benefits, which has driven projected deficits.
Sahoo maintained that the city should conduct an overview of the budget, increase transparency regarding the city’s spending and use more grants to bring in funding from outside the city.
For more information on the candidates and where they stand on issues affecting Milpitas, see their websites — linked online when available — and their candidate statements at milpitas.gov/193/Candidate-Information.