San Jose's projected budget deficit for 2025-26 has been cut from $60 million to $35.6 million, although challenges remain, notably a projected $52.9 million deficit for 2026-27. The City Council discussed reallocating Measure E funds towards homelessness solutions, with Mayor Matt Mahan emphasizing the urgency of addressing temporary housing needs. Despite a slight increase in staffing, the city has maintained a hiring freeze. Budget director Jim Shannon noted the significant impact of redirected funds on addressing these financial challenges while balancing the city's housing crisis.
"This budget would look very different if we didn't have the direction to reallocate funding for Measure E to support homeless, sheltering and supportive services."
"Funds originally prioritized for affordable housing development need to be used for San Jose's growing temporary housing stock, because it will minimize the impact of the city's budget shortfalls."
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