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Dear Neighbor,
I’ll get straight to the point: we’re facing a difficult budget deficit this year. Costs, particularly the City’s cost of labor, are currently going up faster than tax revenues. This requires us to dig into each department, streamline how we operate, drop non-essential programs, defer some capital projects, and in some cases, make tradeoffs that are more painful. But this is what governing effectively and responsibly requires.
With a projected $56 million shortfall to resolve in the coming fiscal year, we must exercise restraint and stay squarely focused on our priorities: increasing community safety, reducing unsheltered homelessness, cleaning up our neighborhoods, building more housing, and growing our economy.
The good news? By focusing City Hall in recent years we’re in a position to protect our progress in key areas of responsibility while keeping down costs elsewhere. My budget message will protect the critical services we all rely on each day and outline some small new programs that we believe will have a big impact. Ultimately, we will work with our City Manager to put forward a proposed budget that reinforces the relentless focus that has led to better outcomes for all of us over the past few years.
On homelessness, we made it our top priority to bring people indoors — and we built the capacity to do it. We expanded interim housing, converted motels, opened safe parking and safe sleeping sites. We built more placements than any other city on the West Coast. Now, it’s time to optimize the system we’ve built. We can negotiate to lower operating costs systemwide by standardizing our agreements with service providers. We also have a new partnership in place with the County that will start to improve services in our interim system while reducing operating costs. Finally, we are making investments to ensure people spend less time in our shelter system by reconnecting them with loved ones or graduating them to permanent housing faster.
On neighborhood cleanliness, residents consistently tell us they want a city they feel proud of. And we've made progress on that front — last year resident satisfaction in the City's trash and litter pick-up services went up 13%. To continue our progress, we’ll focus on tracking illegal dumping and graffiti in hotspot areas and strengthen enforcement. We’ll also improve programs like Free Junk Pickup, so residents are more inclined to use it.
On safety, we reclaimed our title as the safest big city in the nation last year. But safety is not a box to check. It is something we build on every day. By adopting new AI-powered tools, we can reduce administrative burdens on our dispatchers and other staff, freeing up time for higher-impact work. By modernizing emergency response, we can ensure our 911 resources and our emergency rooms are focused on true emergencies. Innovation should help us work smarter, not just spend more.
On economic growth, we are seeing real momentum. Major events are drawing hundreds of thousands of visitors Downtown and supporting our small businesses. By modernizing the SAP Center and organizing our venues into a coordinated Sports and Entertainment District, we can turn big moments into long-term opportunities — attracting investment, driving foot traffic year-round, and making Downtown a premier regional destination. Moreover, San José is poised to attract new investment in manufacturing and data center solutions that will generate the growing tax base we need to expand city services in the coming years.
And on housing, we must hold ourselves accountable for results. A number of departments touch the development process, increasing complexity and slowing down approvals. We can change this. Accountable leadership, a public permitting dashboard, and established timelines for approval will send a message that San José is ready to build. If projects meet our zoning and building requirements, they should move forward quickly.
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