SAN JOSE, Calif. (AP) - The mayor of San Jose is warning city workers that if they don't agree to take steep cuts in pay and benefits, the city will have to eliminate hundreds of jobs.

As San Jose faces its ninth consecutive year with a budget deficit, Mayor Chuck Reed says if city employees don't agree to a 10 percent cut in compensation, the city will have to cut more than 500 jobs.

Reed says while the city's average employee costs have jumped 64 percent since 2000, while revenues have not kept pace.

The warning from the mayor comes after the City Council last fall asked employees for a five percent paycut, though city workers agreed to the cuts.

In a response to the call for paycuts, a statement from the South Bay AFL-CIO Labor Council questioned the mayor's strategy in dealing with the deficit.

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