Structural Budget Deficit — Cuts, Layoffs & a $22 Million Federal Funding Risk

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Hayward's most urgent challenge is a structural deficit that has been years in the making and is only partly resolved. Mayor Salinas identified the main causes of the budget deficit as paying for overtime, new programs and services, saving St. Rose Hospital, buying a movie theater on B Street, and pay increases for all city employees — with steps to reduce the shortfall including cutting all executive position compensation by 40% and $6.7 million in personnel savings. The fiscal pressure is compounding: the city currently relies on approximately $22 million in federal funding, which is primarily project-based, but the potential for reduced funding could further complicate budgetary challenges — and the Trump administration's federal cuts to sanctuary cities and DEI programs have put that revenue at risk. Mayor Salinas has been actively advancing a balanced FY 2026–2027 budget through responsible planning, cost controls, and sustainable solutions, but the structural gap requires longer-term revenue solutions that have yet to be put to voters.

Related cause: Budget priorities

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