San Jose’s projected budget deficit balloons to $60M as city copes with lost tax revenue

AS SAN JOSE crunches the numbers in its upcoming budget, a larger than expected shortfall looms on the horizon, along with another round of department cuts and potential layoffs.

San Jose initially anticipated a budget shortfall of $39 million for the upcoming 2025-26 fiscal year, but it has since ballooned to $60 million, according to a memo from City Manager Jennifer Maguire. The almost 50% increase is due in part to an 11% drop in sales tax revenue from the previous year.