{"slug": "as-san-jose-wrestles-with-budget-deficits-residents-have-one-last-chance-to-in", "title": "As San Jose wrestles with budget deficits, residents have one last chance to weigh in. Here’s what to know.", "summary": "San Jose residents have their final opportunity to weigh in on the city's $5.5 billion proposed budget at a June 8 public hearing and June 9 council meeting, as officials seek to close a $50.3 million deficit through service cuts. The budget, which Mayor Matt Mahan recommended approving, relies on reductions to homelessness programs, delayed police and fire station openings, and the elimination of 85 city positions to balance spending. The city council is scheduled to debate and vote on the budget package June 9, with formal adoption expected June 16.", "body_md": "**Getting your**\n\n[Trinity Audio](//trinityaudio.ai)player ready...For the past several months, San Jose officials have been ringing the alarm on the precarious financial situation facing the city as it contends with painful cuts to services and programs to close a $50.3 million budget deficit. While the $5.5 billion proposed budget is technically balanced, it hinges on reducing public services that affect the most vulnerable among the city’s nearly 1 million residents.\n\nWhen Mayor Matt Mahan released his initial budget message in March, [residents came out to ask the city to protect youth programs](https://www.mercurynews.com/2026/03/18/san-jose-city-council-budget-message-2026-2027-mahan-homelessness-housing/), immigrant services, homelessness initiatives and to assist with the rising cost of living. Since then, City Hall has held several study sessions, a public hearing last month, and town hall meetings with district council representatives.\n\nThe June 8 public hearing and the June 9 meeting will offer the community their last opportunities to weigh in on which programs and services the city should prioritize, and share their ideas on how to address the city’s long-term financial stability. The council is scheduled to debate and vote on the budget package on June 9, with formal adoption expected at the June 16 meeting.\n\nOn June 1, Mahan [released his June budget message](https://www.mercurynews.com/2026/06/05/even-with-hotel-tax-passing-mayor-warns-of-remaining-financial-threats-to-san-jose/) following these public consultations, and recommended approving City Manager Jennifer Maguire’s proposed budget, with additional direction to “preserve core services, maintain fiscal discipline, and fund targeted community priorities across San Jose.”\n\n**Q:** Why is the city facing deficits?\n\n**A:** San Jose’s $50.3 million budget shortfall this year is due to mainly economic conditions – a perfect storm of slowing revenues and rising costs.\n\nIn an interview with this news organization, City Budget Director Jim Shannon said the deficit was mainly because “the economy is still very soft” and is “not growing in a way that benefits city revenue generation.”\n\nAccording to the budget proposal, funding sources such as sales tax collections and property transfer taxes have slumped, yielding flat or lower-than-anticipated revenues compared to prior years.\n\nInflation — or rising costs — has also put pressure on the city, making basic expenses like fueling city vehicle fleets, maintaining public facilities and building public infrastructure more expensive.\n\nThe mayor’s June budget message identified other looming threats to the city’s financial stability – such as the potential loss of cardroom revenue due to changing state regulations and an upcoming state audit of local property tax distributions – which could cost the city up to $65 million.\n\nMaguire highlighted in her budget message last month that even as the budget is balanced, “additional ongoing solutions” to resolve a $27 million shortfall for 2027-2028 are required.\n\n**Q:** What programs face cuts?\n\n**A:** While voters are showing strong support for the San Jose hotel tax measure, the projected revenue from San Jose’s hotel tax measure — almost $10 million annually — helps, it is not nearly enough to close the city’s immediate $50.3 million budget shortfall. Meaning cuts are still expected, including proposed delays in opening police and fire station facilities, saving the city millions in the near term, [and closing public access to the King Library California Room to save nearly $400,000.](https://www.mercurynews.com/2026/05/06/san-jose-budget-california-room-library-pizarro/)\n\nAmong the expected cuts is a loss of 85 city positions, a majority of which are vacant. Mahan’s message noted that displaced workers will “have opportunities to be reassigned.”\n\nThe proposed budget also includes $5.4 million in near-term cuts to homelessness-related programs, including suspending operations at the Taylor Street Safe Sleeping site starting in January.\n\nIt proposes reducing general fund contributions to interim housing, which would save $1.25 million this year. It would also scale back community events, such as Viva Calle, reducing the popular open-streets event from three to two.\n\n**Q:** What are the city’s budget priorities?\n\n**A:** Among the priorities highlighted in Mahan’s budget message is improving public safety by working with county partners to track drug treatment and other rehabilitation programs. It also focuses on reducing unsheltered homelessness by sharing costs with the county, with the goal of reaching “functional zero homelessness.”\n\nThe budget, Mahan said, also addresses blight by “advancing a more coordinated approach to free Junk Pickup and BeautifySJ RAPID illegal dumping response; piloting fee-for-service graffiti removal on private property; strengthening the Downtown Enhanced Vacant Building Program; and funding targeted neighborhood cleanup, park, underpass and beautification projects.”\n\nThe message also highlighted moving toward “90-day approvals for housing projects,” eliminating unnecessary red tape and preparing a pilot to support up to 50 accessory dwelling unit builds.\n\nAccording to Mahan, the plan seeks to grow San Jose’s economy by supporting commercial corridors for small-business districts, while making sure publicly funded events are actually worth the city’s investment. He also noted that it supports immigrant families by maintaining $500,000 in immigrant services funding, and commits to drawing one-time reserve funds to respond if immigration enforcement activity in San Jose escalates.\n\n**Q:** How does this budget impact future years?\n\n**A:** While budget forecasts project diminishing deficits over the next five years — falling from an incremental $26.8 million gap in fiscal year 2027-2028 to eventual surpluses by 2029-2030 — the numbers sit on volatile ground.\n\n“It’s really important to make sure that we have an ongoing balanced budget where we are structurally aligning ongoing revenues to ongoing expenditures,” Shannon said. “If we solve anything just on a one-time basis… that automatically gets added to next year’s deficit. And so we definitely don’t want to do that… so that we don’t make ourselves worse in the future.”\n\nIn other words, relying on stop-gap measures, like dipping into emergency reserves, only moves the problem further down the road. While those funds can dry up, the city’s ongoing expenses that created the deficit remain.\n\nLong-term solutions like the hotel tax measure were proposed explicitly to secure permanent, ongoing revenue.\n\nHowever, because that new tax only covers a portion of the city’s long-term shortfalls, city leaders must continue finding permanent ways to close the remaining financial gaps — otherwise, those unresolved deficits will simply roll over and wait for them in the years ahead.\n\n**Q:** What can residents do?\n\n**A:** It’s not too late for residents to get involved and make their voices heard. [The final public budget hearing is scheduled for June 8 at 6 p.m](https://sanjose.legistar.com/)., where community members can share their ideas on how the city should manage its finances and express how they want San Jose to prioritize its spending.\n\nThey can also speak to the City Council in person during public comment, or submit written comments via email at [city.clerk@sanjoseca.gov](mailto:city.clerk@sanjoseca.gov) generally by 8 a.m. on the day of the meeting. Earlier this week, the council directed city staff to restore remote participation in time for the upcoming budget hearings and meetings for the first time since 2024.\n\n“Making your voice heard matters,” Shannon said. “The council listens. They’re faced with really tough choices. While they may not address everyone’s particular passions, it’s really tough to close a shortfall and make sure that everything is structurally balanced and resources are allocated to the city’s most important priorities.”\n\nStill, Shannon emphasized, “that voice is important to me.”\n\n**Q:** What happens next?\n\n**A: **The City Council is expected to debate the budget on June 9 — with another opportunity for public comment likely — before voting on the package, with final adoption scheduled for June 16.\n\nTo see specific details about the budget and other documents, visit the city’s website [here.](https://www.sanjoseca.gov/your-government/departments-offices/office-of-the-city-manager/budget)", "url": "https://wpnews.pro/news/as-san-jose-wrestles-with-budget-deficits-residents-have-one-last-chance-to-in", "canonical_source": "https://www.mercurynews.com/2026/06/06/san-jose-budget-deficit-faq-june-2026/", "published_at": "2026-06-06 12:30:31+00:00", "updated_at": "2026-06-06 13:27:05.588398+00:00", "lang": "en", "topics": ["ai-policy"], "entities": ["San Jose", "Matt Mahan", "City Hall", "San Jose City Council"], "alternates": {"html": "https://wpnews.pro/news/as-san-jose-wrestles-with-budget-deficits-residents-have-one-last-chance-to-in", "markdown": "https://wpnews.pro/news/as-san-jose-wrestles-with-budget-deficits-residents-have-one-last-chance-to-in.md", "text": "https://wpnews.pro/news/as-san-jose-wrestles-with-budget-deficits-residents-have-one-last-chance-to-in.txt", "jsonld": "https://wpnews.pro/news/as-san-jose-wrestles-with-budget-deficits-residents-have-one-last-chance-to-in.jsonld"}}