In a blow to Mayor Matt Mahan’s accountability agenda, the San Jose City Council Tuesday struck down his proposal to tie a portion of elected officials’ pay to performance.
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While Mahan had argued that pay-for-performance could drive better outcomes, a majority of the City Council — who rejected the proposal by a 7-4 vote — felt that applying a private sector methodology could create perverse incentives, including a focus on short-term goals over the city’s long-term health, and discourage dissenting opinions.
“In the private sector, success is measured by growth, efficiency and return on investment,” District 5 Councilmember Peter Ortiz said. “You chase profit, you reward conformity to organizational goals, and dissent is often viewed as inefficiency. But in the public sector, our sector, we serve the public good that includes protecting vulnerable populations, defending civil rights and cleaning up blight in neighborhoods that may never yield a high economic return on investment.”
Mahan unveiled the first version of the pay-for-performance proposal in March, which initially sought to use a ballot measure in 2026 to ask voters to support tying merit raises for the City Council and upper rung of the city’s administration to clearly defined goals. That proposal would not have impacted base salaries, cost-of-living adjustments, or employees below the senior management level.
Looking to simplify the process, Mahan and Vice Mayor Pam Foley presented a revised proposal last month that aimed to utilize a provision in the city charter, which allows councilmembers to voluntarily reduce their salaries and would allow San Jose to save taxpayers approximately $1 million to put the measure on the ballot.
The revamped initiative also dropped senior administration officials from the proposal as they were already subject to performance evaluations.
Mahan had argued that the accountability measure would drive government efficiency and deliver the outcomes residents consistently called for in community surveys. While each council district has its own issues, Mahan said that polling showed no significant variance between the city’s different regions in terms of residents’ top priorities. He also added that the council did not make district-specific policies and made decisions on a citywide basis.
“This doesn’t just align compensation with results, which, on its own, I think is valuable, but it strengthens our overall budget process by integrating performance targets directly into our annual budget deliberations and our quarterly scorecard and dashboard updates,” Mahan said. “We’re ensuring that our goals and resource allocations are not only aligned but are publicly visible, publicly debated, and grounded in real accountability.”
Drawing on his own experience in education and the nonprofit sector, Mahan also disputed that pay-for-performance would curb dissenting opinions but instead would encourage more discussion if the city failed to make progress on the issues important to residents.
However, while the concept of accountability and driving better performance outcomes was appealing in theory, several council members outlined problems with the proposal.
District 3 City Councilmember Carl Salas, who came into office from the business world, said he has learned that public service is not “a performance-based contract,” and could not think of a relevant metric that would encompass all 10 districts.
Although he acknowledged that the budget was passed citywide, District 4 Councilmember David Cohen noted that every office comes with its own priorities, which are incorporated into it.
District 1 Councilmember Rosemary Kamei, along with Cohen and District 8 Councilmember Domingo Candelas, also authored a memo noting that the city’s Salary Setting Commission already served as an independent body to ensure salaries were insulated against political interests.
“It appears logical, but frankly, elected office is not a corporate role, and I don’t think should be treated as such,” Candelas said. “We are not driven by a profit motive or incentive. Our motivation is greater than that, and I think we have a wide range of duties as elected officials, and ultimately, the primary mechanism for performance for us as elected as councilmembers is at the ballot box.”
District 10 Councilmember George Casey and District 6 Councilmember Michael Mulcahy joined Mahan and Foley in supporting the pay-for-performance proposal. Mulcahy expressed disappointment that the City Council would continue with the status quo.
“I trust that our city can do great things, and hopefully, there’s an iteration of something like this that we can consider moving forward,” Mulcahy said.
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