Wall St Journal 
July 19, 2010
Faced with a $118 million budget deficit, the city of San Jose, Calif., recently decided it could no longer afford its own janitors. So the city’s budget called for dropping its custodial staff and hiring outside contractors to clean its city hall and airport, saving about $4 million.
To keep all its swimming pools open and staffed, the city is replacing some city workers with contractors.
“These are cases where the question is being asked, ‘Is this a core service at the city level?’ ” said Michelle McGurk, senior policy adviser to the San Jose mayor.
After years of whittling staff and cutting back on services, towns and cities are now outsourcing some of the most basic functions of local government, from policing to trash collection. Services that cities can no longer afford to provide are being contracted to private vendors, counties or even neighboring towns.