San Jose budget team presents $5.6 billion operating budget to city council

The San Jose City Council held a budget study session on May 7, 2025, focusing on the proposed operating budget for the upcoming fiscal year. The meeting highlighted the city's financial challenges, including a projected shortfall of $35.6 million in the general fund, which has been revised down from an earlier estimate of $45.7 million due to improved revenue forecasts.

Budget Director Jim Shannon presented an overview of the proposed budget, emphasizing the need for a multi-year strategy to address ongoing financial issues. The council aims to balance the budget while also prioritizing key areas identified in the March budget message, including public safety and community services. The proposed budget totals approximately $5.6 billion across all funds, with the general fund representing about 25% of this total.

Shannon outlined the budget balancing strategy, which includes reallocating $39.2 million from the general fund to support homeless services and identifying new revenue sources. The budget also proposes cost reductions and service adjustments, such as deferring the activation of Fire Station 32 and delaying the opening of a police substation in South San Jose.

The council discussed the importance of maintaining essential services while navigating the financial shortfall. The proposed budget reflects a commitment to addressing immediate needs while planning for future fiscal stability. The next steps in the budget process will involve further discussions and adjustments before the final budget is adopted.