Budget Priorities

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This week in San Jose, the City Manager released a budget proposal for fiscal year 2026-27 that outlines millions of dollars in service cuts to address a $50 million deficit. The proposal comes amid ongoing challenges including weak sales tax revenue, rising pension costs, and a workforce reduced to minimal levels. To help close budget gaps, the city is also pursuing a hotel tax increase through Measure A, which would raise the tax rate from 10% to 12%, targeting visitor contributions. Key points from recent activity in San Jose include: - The City Manager’s budget proposal details broad cuts across city services to manage the shortfall. - Measure A, if approved by voters, would increase hotel taxes to generate additional revenue. - The city continues to face a $56 million budget shortfall driven by multiple fiscal pressures. - Mayor Mahan emphasizes protecting funding for housing, homelessness, and public safety despite budget constraints. What to watch: The outcome of Measure A and further budget discussions will be critical in shaping San Jose’s fiscal outlook and service levels in the coming year.

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