{"id":175392,"date":"2026-02-12T19:29:09","date_gmt":"2026-02-12T19:29:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/175392\/"},"modified":"2026-02-12T19:29:09","modified_gmt":"2026-02-12T19:29:09","slug":"san-jose-faces-tough-choices-as-officials-confront-up-to-65m-budget-deficit","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/175392\/","title":{"rendered":"San Jose faces \u2018tough choices\u2019 as officials confront up to $65M budget deficit"},"content":{"rendered":"<p>San Jose leaders are warning of \u201ctough\u201d\u00a0financial decisions and \u201chard choices\u201d as this year\u2019s budget\u00a0season officially gets underway.<\/p>\n<p>The\u00a0<a href=\"https:\/\/www.sanjoseca.gov\/your-government\/departments-offices\/office-of-the-city-manager\/budget\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">months-long process<\/a>\u00a0kicked off Thursday with a\u00a0<a href=\"https:\/\/sanjose.legistar.com\/View.ashx?M=F&amp;ID=15167200&amp;GUID=86C22EAB-3F43-40BC-8A68-3C74BE78A74D\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">special study session<\/a>\u00a0considering how to balance a projected deficit of up to $65 million. While the city\u00a0<a href=\"https:\/\/sanjosespotlight.com\/san-jose-shrinks-budget-shortfall-prioritizes-temporary-shelters\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">managed to balance<\/a>\u00a0last year\u2019s shortfall\u00a0<a href=\"https:\/\/sanjosespotlight.com\/san-jose-workers-rally-against-hiring-freeze\/\" rel=\"nofollow noopener\" target=\"_blank\">without laying off any workers<\/a>, officials said pulling off the same fiscal feat this year could be a daunting task.<\/p>\n<p><a href=\"https:\/\/sanjosespotlight.com\/\" rel=\"nofollow noopener\" target=\"_blank\"><img loading=\"lazy\" data-recalc-dims=\"1\" decoding=\"async\" width=\"780\" height=\"243\" data-attachment-id=\"158536\" data-permalink=\"https:\/\/localnewsmatters.org\/2025\/06\/17\/santa-clara-county-wraps-up-depressing-budget-cycle-in-anticipation-of-trump-cuts\/lnm-20250616-sjspotlightlogo-01\/\" data-orig-file=\"https:\/\/i0.wp.com\/localnewsmatters.org\/wp-content\/uploads\/2025\/06\/LNM-20250616-SJSPOTLIGHTLOGO-01.jpg?fit=1024%2C319&amp;ssl=1\" data-orig-size=\"1024,319\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"LNM-20250616-SJSPOTLIGHTLOGO-01\" data-image-description=\"&lt;p&gt;San Jose Spotlight logo, for use only with SJS-produced stories.&lt;\/p&gt;&#10;\" data-image-caption=\"\" data-medium-file=\"https:\/\/i0.wp.com\/localnewsmatters.org\/wp-content\/uploads\/2025\/06\/LNM-20250616-SJSPOTLIGHTLOGO-01.jpg?fit=300%2C93&amp;ssl=1\" data-large-file=\"https:\/\/i0.wp.com\/localnewsmatters.org\/wp-content\/uploads\/2025\/06\/LNM-20250616-SJSPOTLIGHTLOGO-01.jpg?fit=780%2C243&amp;ssl=1\" src=\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/02\/1770924549_860_LNM-20250616-SJSPOTLIGHTLOGO-01.jpg\" alt=\"\" class=\"wp-image-158536\"  \/><\/a><\/p>\n<p>\u201cThis is the most difficult budget year I\u2019ve seen in my over seven years on the City Council \u2014 and the largest shortfall,\u201d Vice Mayor Pam Foley said during the meeting.<\/p>\n<p>Over two hours, councilmembers\u00a0staked out their\u00a0<a href=\"https:\/\/sanjosespotlight.com\/silicon-valley-health-care-leaders-say-federal-cuts-truly-devastating\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">budget priorities<\/a>\u00a0for Mayor Matt Mahan as he prepares his March budget message, a crucial document that guides city administrators\u2019 work drawing up concrete budget proposals. If all goes to plan, the back and forth budget talks will culminate on June 16 with the approval of a finalized budget for\u00a0fiscal year 2026-27, which starts July 1.<\/p>\n<p>\u201cAs we head into this process, we will collectively have to discuss service reductions,\u201d Mahan said. \u201cNone of the tradeoffs will be easy.\u201d<\/p>\n<p>While some amount of\u00a0<a href=\"https:\/\/www.sfgate.com\/news\/bayarea\/article\/san-jose-spotlight-proposed-state-budget-21314332.php\" rel=\"nofollow noopener\" target=\"_blank\">fiscal trimming<\/a>\u00a0is inevitable, councilmembers spent at least as much time Thursday\u00a0discussing what they\u00a0<a href=\"https:\/\/sanjosespotlight.com\/urbanowski-the-arts-need-more-investment-from-the-state\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">wanted to preserve<\/a>, with many voicing support for the city\u2019s public safety efforts, libraries, youth programs and\u00a0<a href=\"https:\/\/sanjosespotlight.com\/san-jose-parks-face-budget-cuts-amid-ongoing-work-backlog\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">parks<\/a>.<\/p>\n<p>\u201cI think when resources are constrained, the question is not just what we can afford, but what we can\u2019t afford to lose,\u201d District 8 Councilmember Domingo Candelas said.<\/p>\n<p>During the meeting\u2019s public comment section, several speakers urged councilmembers to continue funding legal services to protect immigrants from deportation. Last June, amid widespread alarm over President Donald Trump\u2019s immigration crackdown, councilmembers approved a\u00a0<a href=\"https:\/\/sanjosespotlight.com\/san-jose-allocates-money-for-immigrant-defense\/\" rel=\"nofollow noopener\" target=\"_blank\">$1 million allocation<\/a>\u00a0to fund local immigrant defense organizations.<\/p>\n<p>\u201cYou guys have a difficult decision to make,\u201d Misrayn Mendoza with Amigos de Guadalupe, one of the nonprofits that received funding, said. \u201cOur community has been making those same tough decisions every single day since this administration came into place.\u201d<\/p>\n<p>City Manager Jennifer Maguire said as her staff hammers out a budget proposal, they will try to avoid layoffs or deep cuts to city services, instead seeking cost savings through efficiency gains and eliminating vacant positions.<\/p>\n<p>\u201cI absolutely know, we all have the shared goal of ensuring our budget reductions are as invisible to our residents and businesses as possible and that employee layoffs are minimized,\u201d she said.<\/p>\n<p>San Jose\u2019s budget presently funds 7,009 staff positions.<\/p>\n<p>The city has already taken\u00a0steps to slow spending, including\u00a0a hiring freeze put in place in December that has halted recruitment for most open positions.<\/p>\n<p>However, officials have warned that after a long run of lean fiscal years, the city\u2019s bag of creative budgeting tricks may be nearly exhausted.<\/p>\n<p>\u201cI\u2019m very concerned about the potential budget impacts to the city workforce,\u201d Jean Cohen, executive officer of the South Bay Labor Council, told San Jos\u00e9 Spotlight. \u201cI think we need to make some really hard choices, and those hard choices shouldn\u2019t be placed on the backs of the city employees or working families in San Jose.\u201d<\/p>\n<p>San Jose\u2019s budget outlook has darkened considerably since last June, when\u00a0councilmembers\u00a0<a href=\"https:\/\/sanjosespotlight.com\/san-joses-5-5b-budget-tackles-controversial-plans\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">approved a $5.5 billion budget<\/a>\u00a0that balanced this year\u2019s $35.6 million deficit.<\/p>\n<p>At the time, budget officials predicted the coming fiscal year would see a somewhat smaller shortfall. However, tax revenue has not met expectations, and the latest projection pegs the deficit between $55 million and $65 million.<\/p>\n<p>San Jose is no stranger to deep budget holes. Over the past 20 years, the city\u2019s cumulative shortfalls have added up to $800 million, officials said. But in recent years, the city\u2019s longstanding cash flow problems have only grown worse as an anemic real estate sector and weak job market have sapped income from its two most important revenue generators \u2014 sales and property taxes.<\/p>\n<p>\u201cOur local economy right now is really not conducive to revenue growth,\u201d Budget Director Jim Shannon said. \u201cWhen jobs are stagnant, the revenue growth lags.\u201d<\/p>\n<p>Contact Keith Menconi at\u00a0keith@sanjosespotlight.com\u00a0or @KeithMenconi on X.<\/p>\n<p><a href=\"https:\/\/sanjosespotlight.com\/san-jose-faces-tough-choices-to-balance-budget-shortfall\/\" type=\"link\" id=\"https:\/\/sanjosespotlight.com\/san-jose-faces-tough-choices-to-balance-budget-shortfall\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">This story originally appeared in San Jos\u00e9 Spotlight.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"San Jose leaders are warning of \u201ctough\u201d\u00a0financial decisions and \u201chard choices\u201d as this year\u2019s budget\u00a0season officially gets underway.&hellip;\n","protected":false},"author":2,"featured_media":40422,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[16476,16752,4249,80201,83642,83643,6113,83644,88,5500,90,89,881,198,83645],"class_list":{"0":"post-175392","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-jose","8":"tag-budget-deficit","9":"tag-budgets","10":"tag-businesses","11":"tag-city-employees","12":"tag-hiring-freeze","13":"tag-jennifer-maguire","14":"tag-layoffs","15":"tag-public-service","16":"tag-san-jose","17":"tag-san-jose-city-council","18":"tag-san-jose-headlines","19":"tag-san-jose-news","20":"tag-san-jose-spotlight","21":"tag-santa-clara-county","22":"tag-south-bay-labor-council"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/175392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=175392"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/175392\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/40422"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=175392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=175392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=175392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}