Los Gatos services could be hit by federal funding cuts

The shifting political tides in Washington, D.C. have Los Gatos officials strategizing ways to protect vital services.

The Los Gatos Town Council voted 4-1 March 18 to review federal funding changes every two months to determine the effect on town services, with Councilmember Mary Badame voting no. The small West Valley town has yet to receive roughly $5.6 million out of $10 million in federal funding and grants this year — money it relies on to supplement its $60 million budget for costs it can’t cover alone.

Los Gatos is waiting for nearly $3.7 million in vegetation management funds from the Federal Emergency Management Agency and U.S. Forest Service to help prevent wildfires in the high-risk town. Once received, the town will contribute an additional $1.7 million from the general fund, some of which has already been doled out. It’s also waiting on a roughly $2 million Federal Highway Administration reimbursement to pay for its nearly completed Los Gatos Creek Trail connector project to Highway 9.

The funding uncertainty is largely due to fluctuating policies under the Trump Administration, including a January executive order freezing federal funding. While the administration later rescinded it, it maintained it will continue to push for the freeze, leaving municipalities across Santa Clara County, including Los Gatos, in limbo.

Mayor Matthew Hudes said the town is paying attention to any federal changes that could affect its residents, ranging from local funding sources to Medicaid money, known as Medi-Cal in California. He said now is not the time to reallocate funds because everything is still uncertain, adding the town can pull from reserves for critical services if needed.

“We jumped on this right away, and we’ve put (in) an ongoing way of monitoring it,” Hudes told San José Spotlight. “The town is well managed financially.”

The discussion comes just before a budget review for the upcoming year. The town is projecting a $5.6 million deficit for fiscal year 2025-26, with the shortfalls expected to grow in future years. Projections don’t account for federal uncertainty.

Several residents at the meeting voiced their support for the current administration, but many expressed concerns over what national decisions could mean for Los Gatos.

Deborah Lowe, who’s lived in town for about 30 years and serves on the Library Board, said a large concern is wildfire management because Los Gatos is so close to the mountains. The town is hiring a full-time emergency preparedness manager.

“The federal government is Big Brother. They do oversight,” Lowe told San José Spotlight. “They protect all their citizens from the poorest to the richest, and they’re trying to take that away.”

Karla Albright, a resident for 30 years, said while the news is worrisome,  it’s encouraging to see the town monitoring the situation. She said the town must become more self-sufficient and rely on the community during uncertainty.

“The best case scenario is that we’re overreacting, but better to be prepared than to be caught off guard,” Albright told San José Spotlight.

The town council will discuss the budget, including any federal changes, in May.

Contact Annalise Freimarck at [email protected] or follow @annalise_ellen on X.