Los Gatos faces multimillion-dollar deficits as rising costs outpace revenue growth

One West Valley town may have to brace for some rocky years as it faces multimillion-dollar shortfalls.

Los Gatos could be looking at an estimated $5.6 million deficit for fiscal year 2025-26, a significant number for a town with a roughly $60 million budget for the current fiscal year. The shortfall is largely due to anticipated revenue not keeping pace with rising costs and inflation, according to the town’s mid-year fiscal report and five-year forecast released last month.