San Jose passes budget with millions of dollars in service cuts

The San Jose City Council passed a $5.5 billion budget Tuesday, balancing a $50 million deficit by tapping into reserve funds and making wide ranging service cuts — but no layoffs.

Over the course of the four-month-long budgeting process, San Jose leaders have warned the city may need to resort to painful fiscal trimming. However, in many cases, city officials have been able to blunt the most contentious of the budget shortfalls — including those related to immigrant defense and a popular library program — largely by reallocating funding from the city’s budget reserves.

When councilmembers unanimously voted to approve the budget for the coming fiscal year, which begins July 1, the decision was met with applause throughout the council chamber.

Mayor Matt Mahan was among those who expressed relief that the final document wasn’t any worse.

“I think we’ve landed in a place that’s about as good as it gets, given the circumstances,” Mahan said at the meeting.

In addition to cracking open reserve funds, city officials said they also found savings from a reduction in spending on homeless shelters made possible now that the city has completed what Mahan has called the final round of major encampment clearings.

Nevertheless, the budget still includes $18.9 million in “cost and service level reductions” across multiple departments. That’s the equivalent of cutting 85 full time staff roles, though it will not lead to layoffs because most of those roles are vacant. In other cases, workers will be reassigned to new positions.

In response to the barrage of service cuts, first outlined in the city manager’s May budget proposal, councilmembers submitted 78 budget documents that included proposals for $11 million in one-time spending, according to Mahan’s office. Of those, 67 made it into the mayor’s June Budget Message, shoring up support for spending priorities related to public safety, libraries and youth services.

“This budget proves that even in a challenging fiscal environment we can maintain focus on major priorities while continuing to support other core services such as health and wellness programs for older adults and keeping our libraries open,” Vice Mayor Pam Foley said in a press release following the council meeting.

Patching budget holes 

Among the last-minute revisions made to the budget, councilmembers voted to add an additional $500,000 of one-time funds toward the city’s immigrant defense services, bringing the total allocation to $1 million this year. Advocates protested after the May budget proposal from City Manager Jennifer Maguire included just $500,000, which would have marked a 50% reduction from the prior year’s budget.

The decision to restore the immigrant defense funding, which goes toward legal services and other work to protect undocumented residents from deportation, has won cheers from advocates.

“These funds will help families prepare, get support and stay together during difficult times,” Joanna Becerra, a community organizer with Amigos de Guadalupe, an organization that has received city funding for immigrant defense work, said Tuesday.

Some of Maguire’s proposed public safety cuts also proved contentious. Officials had sought to save $5.4 million by delaying the opening of two long anticipated facilities — a new police training center and Fire Station 32, located near Interstate 680 and Highway 101.

District 7 Councilmember Bien Doan warned existing fire stations in his district are overburdened, and that any further delays for Fire Station 32, which has already been built, would undermine public safety. Councilmembers approved his proposal to seek the funding needed to staff the station by applying for a federal grant.

Doan also submitted a separate proposal to allocate an additional $250,000 to the San Jose Police Department to boost officer patrols in District 7, but the measure didn’t gain traction. Doan argued the department needs such resources to effectively maintain public order.

“Officers are already stretched thin responding to Priority 1 and Priority 2 calls involving threats to life and safety,” Doan said at the meeting. “As a result, quality of life crimes and neighborhood concern often cannot, I repeat, cannot receive the immediate attention residents expect and deserve.”

The city also seems to have saved an imperiled library program — at least for now.

The May budget proposal included $1.2 million in cuts for the library system, and would have led to the closure of a popular room at Dr. Martin Luther King, Jr. Library that provides access to documents related to California’s history.

The news of the pending closure led to widespread outcry, but in the final budget, the city has committed to reallocating $245,000 from the Library Parcel Tax Fund for the program. The one-time funding will keep the room open for another year, but the city will still need to search for new funding sources to keep it open longer.

Councilmembers caught a funding break from last Tuesday’s primary election, when 67% of local voters cast their support behind Measure A, which adds roughly $10 million in annual revenue to San Jose’s budget by increasing the city’s hotel tax. Had it not been passed, city leaders had warned the fiscal fallout would have been severe.

“We would be having a very, very different discussion in trying to do a greater cut on many of our services today,” District 1 Councilmember Rosemary Kamei said Tuesday.

Contact Keith Menconi at [email protected] or @KeithMenconi on X.