2026-2027 PROPOSED
OPERATING BUDGET
OVERVIEW
May 6, 2026
2026-2027 Budget Study Sessions
Slide 2
PRESENTATION AGENDA
• Opening Remarks
• Proposed Budget Overview
• Budget Balancing Strategy and Recommended Budget Actions • Next Steps in the Budget Process
• Economic Outlook
2026-2027 PROPOSED OPERATING BUDGET
GENERAL FUND OPERATING MARGIN
Slide 3
2026-2027 2027-2028 2028-2029 2029-2030 2030-2031
Five-Year
Surplus/
(Shortfall)
Incremental
Surplus/
(Shortfall)
($50.3)2 ($26.8) ($11.8) $13.8 $11.6 ($63.5)
Total
Cumulative
(Shortfall)
($50.3)2 ($77.1) ($88.9) ($75.1) ($63.5) ($63.5)
2027-2031 Revised General Fund Five-Year Forecast
($ in millions)1
2 This figure was revised from the $56.0 million shortfall as presented in the Forecast released in March 2026 as a result of continued analysis of projected revenues and expenditures.
1 Does not include 1) costs associated with services that were funded on a one-time basis in 2025-2026; 2) costs associated with unmet/deferred infrastructure and maintenance needs; and 3) one-time revenue sources or expenditure needs. 2026-2027 PROPOSED OPERATING BUDGET
OVERVIEW
Slide 4
• Balanced all funds (General Fund, Special and Capital Funds) • Fully resolves the General Fund projected shortfall of $50.3 million on an ongoing basis while minimizing community and employee impacts, and still makes targeted investments • Investment Priorities:
Reducing Unsheltered Homelessness
Improving Community Safety
Cleaning Up Our Neighborhoods
Growing Our Economy
Building More Housing
Other investment priorities included select areas of important and ongoing Core Service work within other community services, strategic support services, and infrastructure/technology • Budgeted Positions (all funds) decrease by 85 positions, from 7,009 to 6,924
2026-2027 PROPOSED OPERATING BUDGET
OVERVIEW
Slide 5
2026-2027 PROPOSED CITY BUDGET 1: $5.5 billion
TOTAL NUMBER OF FUNDS: 152
TOTAL NUMBER OF POSITIONS (FTE): 6,924
1 An adjustment of $921 million is necessary to arrive at the $5.5 billion net 2026-2027 Proposed City Budget to avoid the double-counting of transfers, loans and contributions between City funds.
General Fund,
$1,715.2 , 27%
Special Funds,
$3,492.8 , 55%
Capital Funds,
$1,177.7 , 18%
$ in millions
2026-2027 PROPOSED OPERATING
BUDGET OVERVIEW – FUND CATEGORIES
Slide 6
* Capital Fund expenditures include only personal services and overhead reimbursements. $140.44
$13.09
$43.12
$60.50
$92.21
$92.01
$139.20
$159.40
$198.00
$370.07
$573.83
$1,530.39
$(150) $100 $350 $600 $850 $1,100 $1,350 $1,600
Capital*
Parking
Convention & Cultural Affairs
Other
Internal Service
Development Fee
Benefits
Housing
Airport
Energy
Sewer, Storm, Waste, Water
General Fund
2025-2026 Proposed Operating Budget by Fund Category (exc. Transfers, Reserves, and Fund Balance) 2026-2027 PROPOSED OPERATING BUDGET
USES BY CITY SERVICE AREA (ALL FUNDS; $ IN MILLIONS)
Slide 7
Community and Economic Development,
$215.6 , 6%Environmental and Utility Services,
$940.0 , 28%
Neighborhood Services,
$386.6 , 11%
Public Safety, $961.5 , 28% Transportation and Aviation Services, $339.2 , 10%
Strategic Support, $580.0 ,
17%
* Excludes Fund Balance, Transfers, Reserves, and Capital Fund (project) expenditures. 2026-2027 PROPOSED OPERATING BUDGET
GENERAL FUND SOURCES
Slide 8
Total General Fund Sources: $1,715,206,318
2026-2027 PROPOSED OPERATING BUDGET
GENERAL FUND USES BY CATEGORY
Slide 9
Personal Services
71%
Non-
Personal/Equipment
12%
City-Wide Expenses
6%
Capital Contributions
1%
Transfers
1%
Earmarked Reserves and
Contingency Reserve
4%
Encumbrance Reserve
5%Total General Fund Uses: $1,715,206,318
2025-2026 PROPOSED OPERATING BUDGET
GENERAL FUND BUDGET BY CATEGORY
Slide 10
$541.26 $303.09
$151.02
$60.54
$0 $100 $200 $300 $400 $500 $600 $700
Police Department
Fire Department
Parks, Recreation and Neighborhood Services Department
Public Works Department
Transportation Department
Library Department
Information Technology Department
Office of the City Manager
Finance Department
Office of the City Attorney
Planning, Building and Code Enforcement Department
Mayor and City Council
Other Departments
City-Wide
Capital Contributions
Transfers to Other Funds
Reserves
Millions
Non-Personal Personal
Departmental
Non-Departmental
2026-2027 BUDGET BALANCING STRATEGY
PROPOSED BUDGET DEVELOPMENT CONSIDERATIONS
Slide 11
City Council-approved
Mayor's March Budget
Message
City Council and
Administration
Priorities
Budget Balancing
Strategy Guidelines
and Service Delivery
Framework
City Council Policy
1-18 and City of San
Jose Budget Principles
Budgeting for
Equity
Equity considerations were central to the development of the General Fund budget balancing strategy. T o mitigate service impacts, the Administration focused on solutions that optimized and realigned service delivery to achieve ongoing costs savings without significant impacts and maximized strategies to increase revenues. 2026-2027 BUDGET BALANCING STRATEGY
KEY GENERAL FUND BALANCING STRATEGIES
Slide 12
Homelessness services savings without compromising outcomes within the Reducing Unsheltered Homelessness Focus Area
• Beautify San José – Reduction of $4.2 million in 2026-2027 and $6.4 million ongoing • Interim Housing Portfolio – Reduction of $1.2 million in 2026-2027 and $14.2 million ongoing New or increased revenues
• Passage of Measure A (T ransient Occupancy T ax Increase) - $6.75 million in 2026-2027 and $9.5 million ongoing • T ransfers from eligible special and capital funds to the General Fund - $4.9 million in 2026-2027 and $3.2 million ongoing
• Adjustments to fees and charges to maintain cost recovery levels - $3.8 million Cost and service reductions
• Variety of targeted cost reductions totaling $18.9 million in 2026-2027 and $19.4 million ongoing • Includes $2 million from organizational realignments and optimizations with minimal negative impacts • Includes a two-year deferral of Fire Station 32 and the Police T raining Center (subject to reevaluation) Strategic use of the Budget Stabilization Reserve
• Allocates $35.0 million for key deferred capital maintenance and technology investments, key City priorities, and bridge funding in 2026-2027 to all full phase-in of Beautify San José and Interim Housing Portfolio reductions Resolves over
75% of the
ongoing
General Fund
shortfall
2026-2027 BUDGET BALANCING STRATEGY
GENERAL FUND
Slide 13
2026-2027 Ongoing
T otal General Fund Shortfall $ (50.3) $ (50.3)
Recommended Balancing Strategy
– Changes in Sources $ 66.3 18.4
– Changes in Uses 16.0 (31.9)
T otal Balancing Strategy $ 50.3 $ 50.3 Amount Remaining $ 0 $ 0 2026-2027 PROPOSED BUDGET ACTIONS
GENERAL FUND USES ($ IN MILLIONS)
Slide 14
Use of Fund 2026-2027
Adjustments
Ongoing
Adjustments
Unmet/Deferred T echnology, Infrastructure, and Maintenance $21.9 $0.7 Service Level Enhancements $7.3 $4.2
Earmarked Reserves
(Police Sworn Backfill, Essential Services, Children & Y outh Master Plan) $7.5 $0 Previously One-Time Funded Services (from 2025-2026) $3.7 $1.3 Other Fee Programs/Grants/Reimbursements $3.4 $1.8
New Infrastructure/Equipment Operations and Maintenance $0.2 $0.3 Service Reductions/Service Delivery Efficiencies/Fund Shifts ($18.9) ($19.4) Beautify San José ($4.2) ($6.4)
Use of Reserves (Committed Additions, Deferred Infrastructure, and Police Equipment Sinking Fund) ($3.6) ($0.3) Interim Housing Construction and Operation ($1.3) ($14.2) To t a l ($50.3) ($50.3)
2026-2027 PROPOSED BUDGET
BUDGET STABILIZATION RESERVE
Slide 15
Budget Stabilization Reserve Framework Amount
($ million)
Do not rely on the Budget Stabilization Reserve to address ongoing General Fund shortfalls given that the Reserve is a one-time source of funding. The 2026-2027 Proposed Operating Budget does not recommend the use of the Budget Stabilization Reserve to address the ongoing General Fund shortfall. $0
Address one-time urgent, unfunded capital rehabilitation and technology projects at critical City facilities.
$8.32
Consider limited, targeted investments for critical one-time services/projects or to yield long-term savings or efficiencies.
$11.48
Phase-in ongoing reductions over a two-year period, as necessary and on a limited basis, to allow the transition or wind down of the impacted services.
$15.20
2026-2027 Proposed Operating Budget T otal Budget Stabilization Reserve Use $35.00 2026-2027 PROPOSED BUDGET
BUDGET STABILIZATION RESERVE
Slide 16
Ensure sufficient funding remains to address potential shortfalls should the General Fund’s budgetary position worsen further in 2025-2026 or 2026-2027, either due to unexpected revenue loss or unforeseen expenditures Anticipated Budget Stabilization Reserve Balance in 2026-2027 = $32.5 million Potential Future Impacts to the Reserve:
• City’s Education Revenue Augmentation Funding (ERAF) – 20% ongoing loss beginning in 2025-2026 ($9 - $10 million annually). Claw back to 2020-2021 of $35 - $39 million • Cardroom Business Tax – Potential loss of up to $25 million beginning in 2026-2027 • Other critical capital needs
• Other unexpected revenue loss or expenditure need
General Purpose Reserves should be 10% of General Fund expenditures; currently at 4.9% 2026-2027
PROPOSED
BUDGET
CONTINGENCY
PLAN
Slide 17
Service impacts will be
significantly more
impactful if Measure A
does not pass
May also be needed to
address unexpected
revenue shortfalls or
expenditure needs
COMMUNITY AND ECONOMIC DEVELOPMENT CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 18
Growing Our Economy
Business Outreach and Development Staffing ($536,000)/City Manager’s Office of Economic Development and Cultural Affairs Major Events Staffing and Programming ($350,000)/City Manager’s Office of Economic Development and Cultural Affairs
Sports Authority ($250,000)/City-Wide Expenses
Downtown Stitching Districts ($250,000)/City-Wide Expenses Enhanced Infrastructure Financing District Assessment
($100,000)/City-Wide Expenses
East Side Revitalization Plan ($50,000)/City Manager’s Office of Economic Development and Cultural Affairs
Storefront Activation Grant Program ($50,000)/City-Wide Expenses Building More Housing
Tri-Element General Plan Update Consultant Services
($500,000)/Planning, Building and Code Enforcement
Historic Buildings Inventory ($250,000)/Planning, Building and Code Enforcement
Building Development Fee Program Staffing ($143,000)/Planning, Building and Code Enforcement
Planning Development Fee Program Staffing ($73,000)/Planning, Building and Code Enforcement
Cost Reductions/Service Delivery Efficiencies/Funding Shifts/Revenues Recruitment Staffing (-$308,000)/Planning, Building and Code Enforcement and Housing
Communications Staffing (-$211,00)/Housing
Administrative Staffing (-$146,000)/City Manager’s Office of Economic Development and Cultural Affairs
San José Works – Youth Jobs Initiative
(-$200,000)/City-Wide Expenses
ENVIRONMENTAL AND UTILITY SERVICES CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 19
Important and Ongoing Core Service Work
Residual Solids Management Operations Dredges ($2.4
million)/Environmental Services
South Bay Water Recycling Metering and Pressure Monitoring Improvements ($2.0 million)/ Environmental Services
Sanitary Sewer Cost-of-Service Study ($575,000)/Environmental Services
Storm Drain Inlet Marking Compliance ($375,000)/Environmental Services and Transportation
Fire Stations and Former Fire Training Center PFAS Investigation and Clean-up ($350,000)/ Environmental Services
Enhanced Street Sweeping for 100% Trash Load Reduction Compliance ($341,000)/Environmental Services and Transportation
Strategic Load Management Staffing ($300,000)/Energy
Solid Waste Enforcement Program Staffing ($179,000)/Environmental Services
Energy Hedging Program Review ($175,000)/Energy
Risk Management and Contracts Administration Compliance ($159,000)/Energy
Demand Side Power Portfolio Management Staffing ($159,000)/Energy
NEIGHBORHOOD SERVICES CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 20
Reducing Unsheltered Homelessness
Homelessness Response Division Staffing (Continuation)
($622,000)/Housing
PATH-CITED Grant Staff Funding ($604,000)/Housing
Enhanced Engagement Program Staffing (Continuation)
($476,000)/Housing
Homelessness Response and Housing Production Staffing Alignment ($204,000)/Housing
Interim Housing Construction and Operations
(-$1.25 million in 2026-2027 and $14.2 million ongoing)/City-Wide Expenses
Cleaning Up Our Neighborhoods
Enhanced Vacant/Dangerous Downtown Building Inspection
(Continuation) ($175,000)/Planning, Building and Code Enforcement BeautifySJ Grants ($50,000)/City-Wide Expenses
Beautify San José Program Optimization (-$4.2 million in 2026-2027 and $6.25 million ongoing)/Parks, Recreation and Neighborhood Services
Other Important and Ongoing Core Service Work
Fee Program Updates ($1.5 million, offset with revenues)/Parks, Recreation and Neighborhood Services
Alum Rock Park and City Parks/Open Spaces Vegetation
Management ($1.0 million)/Parks, Recreation and Neighborhood Services
Animal Care and Services – Trap, Neuter, and Release and Spay and Neuter Services Expansion ($289,000)/Parks, Recreation and Neighborhood Services
NEIGHBORHOOD SERVICES CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 21
Cost Reductions/Service Delivery Efficiencies/Funding Shifts/Revenues Biblioteca Latinoamericana Facility Renovation Closure
(-$821,000)/Library
San José Recreation Preschool Program
(-$439,000)/ Parks, Recreation and Neighborhood Services King Library California Room Public Access Closure
(-$388,000)/Library
Nonfunctional Turf Removal Water Savings
(-$384,000)/Parks, Recreation and Neighborhood Services Parks Maintenance Redistricting, Citywide Sports Programming, and Lease Management (-$332,000)/Parks, Recreation and Neighborhood Services
Viva CalleSJ and Viva Parks Events
(-$302,000)/Parks, Recreation and Neighborhood Services BEST Grant Program (-$142,000)/City-Wide Expenses
PUBLIC SAFETY CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 22
Increasing Community Safety
Police Department Sworn Backfill Reserve
($5.0 million)/General Fund Capital, Transfers and Reserves Police Sworn Compensatory Time Buydown ($1.9 million)/Police Bureau of Field Operations Overtime ($1.0 Million)/Police Police Equipment Replacement ($915,000)/Police
Community Paramedicine Pilot Program ($764,000)/Fire
Artificial Intelligence Report Writing Tool ($750,000)/Police Coyote and Guadalupe River Trail Patrol (Continuation)
($650,000)/Police
Fire Station Privacy Enhancements ($570,000)/General Fund Capital, Transfers and Reserves
Fire Alerting System Network ($475,000)/ General Fund Capital, Transfers and Reserves
Automated License Plate Reader Cameras ($420,000)/Police 911 Call Center Upgrades FF&E ($350,000)/General Fund Capital, Transfers and Reserves
Electronic Patient Care Table Replacement ($315,000)/Fire Cost Reductions/Service Delivery Efficiencies/Funding Shifts/Revenues Fire Station 32 Two-Year Deferral (-$4.7 million)/Fire
Unstaffed Unit Reduction (-$3.1 million)/Police
Police Training Center Two-Year Deferral (-$778,000)/Police Police Administration Building Front Lobby Hours – Friday Closure (-$605,000)/Police
Wildland Engine Staffing Reconfiguration (-$491,000)/Fire Disaster Preparedness and Emergency Response Modeling Software (-$310,000)/City Manager’s Office of Emergency Management School Crossing Guard Program (-$300,000)/Police
Emergency Medical Services Staffing (-$220,000)/Fire
Bureau of Field Operations Administrative Staffing (-$174,000)/Police
TRANSPORTATION AND AVIATION SERVICES CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 23
Increasing Community Safety
Automated Speed Enforcement Program ($412,000)/Transportation Senter Road Multimodal Safety Improvement Project Staffing (Continuation) ($223,000)/Transportation
Quick Build Projects on Priority Safety Corridors Staffing (Continuation) ($174,000)/Transportation
Growing Our Economy
Airport Real Estate Development ($150,000)/Airport
Other Important and Ongoing Core Service Work
Urban Forestry Grant ($1.8 million)/City-Wide Expenses
Willow Glen On-Street Parking ($297,000)/Transportation Airport Facilities Landscape Management ($200,000)/Airport Downtown Parking Rates and Hours ($106,000) /Transportation New Traffic Infrastructure Assets Operations ($105,000)/Transportation Airport FAA Mandated Wildlife Staffing (Continuation) ($64,000)/Airport Cost Reductions/Service Delivery Efficiencies/Funding Shifts/Revenues Traffic Capital Vacant Positions Eliminations
(-$381,000)/Transportation
Tree and Sidewalk Program Staffing (-$124,000)/Transportation Traffic Safety Data Collection Staffing and Funding Shift (-$111,000)/Transportation
Virtual Machine Migration to Cloud (-$20,000)/Transportation
STRATEGIC SUPPORT CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 24
Other Important and Ongoing Core Service Work
Information Technology Equipment Refresh ($5.0 million)/Information Technology
9-1-1 Dispatch Backup Generator Replacement ($3.5 million)/ General Fund Capital, Transfers, Reserves
City Hall Water Intrusion Remediation ($2.0 million)/ General Fund Capital, Transfers, Reserves
Customer Experience Transformation ($3.9 million)/City-Wide Expenses
Privacy and AI Automation Staffing ($825,000)/Information Technology Cybersecurity Operations Staffing and Services
($554,000)/Information Technology
Office of Racial and Social Equity - Immigrant Community Support Services ($500,000)/City Manager’s Office
City-Wide Grants Management Software ($500,000)/Finance Fleet Maintenance Services Staffing ($380,000)/Public Works San José 311 Migration ($276,000)/Information Technology Legal Representation Staffing (Municipal Code Enforcement) (Continuation) ($221,000)/City Attorney’s Office
Underutilized Vehicles Redistribution ($135,000)/Public Works
STRATEGIC SUPPORT CSA
KEY BUDGET ACTIONS (PARTIAL LIST)
Slide 25
Cost Reductions/Service Delivery Efficiencies/Funding Shifts/Revenues Public Works Department Staffing Plan – Capital Improvement Plan (-$3.0 million)/Public Works
Mayor and City Council Offices (-$383,000)/Mayor and City Council Budget and Finance Applications Support Staffing
(-$236,000)/Information Technology
Workforce Development Pipeline Staffing
(-$212,000)/Human Resources
Transfer to the Vehicle Maintenance and Operations Fund (-$250,000)/General Fund Capital, Transfers, Reserves
Unanticipated/Emergency Repair and Maintenance
(-$200,000)/General Fund Capital, Transfers, Reserves
Help Desk Staffing (-$193,000)/Information Technology
Legal Representation Staffing (-$160,000)/City Attorney’s Office Office of the City Manager - City Manager’s Chief of Staff Realignment (-$148,000)/City Manager’s Office
Finance Administration Staffing (-$144,00)/Finance
Payment Processing Staffing (-$139,000)/Finance
Utility Billing Staffing (-$139,000)/Finance
In-Person Interpretation Services (-$125,000)/City Clerk
RECOMMENDED BUDGET ACTIONS
FEES AND CHARGES ADJUSTMENTS
Slide 26
Utilities
– Storm Sewer Service Fee: No fee increase
– Sewer Service and Use Charge Fee: 1% overall revenue increase – Recycle Plus Rates: 7% increase for single-family and 4% for multi-family dwellings
– Municipal Water System Rates: revenue increase of 8% increase (rates will vary by user)
Development Fee Programs
– Building Development Fee Program fee decreases approximately 1.1%. – Planning Development Fee Program: No fee increase
– Fire Development Fee Program: 3% fee increase
– Public Work Development Fee Program: 3% fee increase
BUDGET STUDY SESSIONS
Slide 27
Wednesday, May 6 - 9:00am – 12:00pm
Overview, Community and Economic Development CSA
Thursday, May 7 - 9:30am – 12:00pm
Transportation & Aviation Services CSA, Environmental & Utility Services CSA Monday, May 11 - 9:30am – 5:00pm
Neighborhood Services CSA, Public Safety CSA, Strategic Support CSA/Appointees, Fees and Charges, Capital Program Overview
Wednesday, May 13 & Thursday, May 14 - 9:00am – 12pm
Held should additional discussion be required
NEXT STEPS FOR REVIEW, INPUT, AND APPROVAL
Slide 28
May 6th through 14th City Council Budget Study Sessions May 18th Virtual Budget Town Hall
May 12th/June 8th Budget Public Hearings
June 1st Mayor’s June Budget Message Released
June 8th Final Public Hearing
June 9th Council Review/Approval of Mayor’s June Budget Message and Proposed Budget
June 16th Adoption of the 2026-2027 Budget and Fees and Charges 2026-2027 PROPOSED OPERATING
BUDGET OVERVIEW
Jim Shannon
Budget Director
Bonny Duong
Assistant Budget Director
Claudia Chang
Deputy Budget Director
Selena Ubando
Financial Status Coordinator
Bryce Ball
Operating Budget Coordinator
Jennifer Tell
Capital Budget Coordinator
May 6, 2026
Jen Baker
Director
City Manager's Office of Economic Development and Cultural Affairs FY26/27
Economic Context
Agenda
• San José’s Economic Landscape
• Corporate Trends
• Employment Dynamics
• City Revenues
San José’s Economic Landscape
San José’s Economic Landscape
Levels of Analysis
National State Local
High Cost of
Living
Dynamic Tech Sector
Trade and
Tariffs
Competitiveness
Energy Generation
and Demand
Population and
Labor Market
Immigration
Housing Pressures
Development
Pipeline
Regulatory EnvironmentEnergy Market
AI Investment
San José’s Economic Landscape
Benchmarking Performance
Data: Zillow & BLS
United States
• Population: +0.5%
• GDP: +2.1%
• Employment: +0.1%
• Unemployment: 4.3%
California
• Population: - 0.02%
• GDP: +0.8%
• Employment: +0.5%
• Housing stock: +0.9%
• Unemployment: 5.4%
Santa Clara County
• Population: +0.3%
• GDP: +3.5%
• Employment: +0.6%
• Housing stock: +0.6%
• Unemployment: 4.2%
San Jose’s Economic Landscape
Capacity To Grow
Corporate Trends
Corporate Trends
37 Data from EDD WARN Notice Database
Narrative Reality
• Unemployment has been steady for 3+
years
• Employment totals have continued to
gradually rise
• Total layoffs through WARN represent
slightly more that 0.5% of total employment
in city
• Since 2023, San José jobs have remained
relatively stable, with year-to-year changes
under 4.5%
• Layoffs have cooled from recent highs
Corporate Trends
Office Use Stabilizing at New Baseline
Data: Kastle Systems
Corporate Trends
Source: Industry Statistics
Office
Retail
Industrial
Corporate Trends
Growth Industry Activity
40 Corporate Trends
New, Expanded, or Reaffirmed Presence in San José
Corporate Trends
Small and Family-Owned Businesses & Entrepreneurship
Employment Dynamics
Employment Dynamics
San José’s Unemployment Rate Remains Stable
Employment Dynamics
San Jose MSA 2025 vs 2024
Finance
- 700
Construction
+ 1,900
Sector Gains
Accommodation &
Food Service
- 500
Health care &
Social Assistance
+ 8,300
Sector Losses
Transportation &
Warehousing
- 800
Manufacturing
+ 1,100
Data is from EDD April 2025 and is for San Jose MSA December to December Dynamic Activity
Tech
+1,900
Employment Dynamics
Industry Mix Supports Stability
46 Workforce Demographics
• The average wage for a job in San Jose
is $128,139, but 20% of the population
lives on less than $55,376 per year
• About 49% of residents hold a
bachelors degree, while 22% hold a
graduate degree or higher.
• About 31% of workers commute 25+
miles, compared to 52% traveling under
10 miles
Data sourced from EDD
Employment Dynamics
Large Employers Anchor Jobs, Small Businesses Define Community 47 The top 1% of employers account
for 39% of total employment in San
José
The largest 35% of employers
account for 90% of total
employment
425,900 Total Jobs
The remaining 65% of employers
account for 10% of total
employment
Data sourced from EDD
Employment Dynamics
Major Private Employers
*As measured by Business license database and others
Employment Dynamics
Income Growth Driving Demand
CDTFA Resident Income & State Tax Paid
2013 2023 10-year +/-
Taxpayers 460,000 480,000 4.3%
Aggregate Income $35,710,000,000 $71,955,000,000 101.5% Average Taxable
Income $78,000 $150,000 92.3%
State Tax $1,735,000,000 $4,319,000,000 148.9%
• High incomes reflect a skilled workforce, raise labor costs • Higher earnings can fuel local spending
• Taxpayer trends help flag shifts in the resident workforce Employment Dynamics
Looking Ahead at the San José Workforce
50 <5
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
2010
<5
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
202421% in
2010
15% in
2024
45% in
2010
43% in
2024
10% in
2010
16% in
2024
Data sourced from Census ACS 2024
City Revenue Trends
City Revenue Trends
Tax Revenues and Market Forces
Data: City of San Jose Annual Report & Five-Year Forecast • Revenues have grown since 2020,
but down in real terms, -0.8% after
inflation
• Sales tax trends show uneven
growth across sectors
• County pool share of sales tax has
increased significantly from 12% to
25%, driven by online sales
• B2B activity remains a core
component of the City’s sales tax
City Revenue Trends
Sales Tax Recovery with Uneven Growth
Data: Avenu Insights
• Average 30% of overall
inflation since 2020
• Net increase of 8% in taxable
sales
• Food sales outpacing inflation,
other sectors lagging behind
inflation
• Construction has experienced
nearly 50% inflation since 2020
Year Taxable sales
2015 40.9 Billion
2020 48.3 Billion
2025 61.3 Billion
DOTTED LINE: INFLATION TREND
City Revenue Trends
Employment Lands Support Long-Term Fiscal Capacity
Data sourced from Santa Clara County Assessor
• Employment Lands Property Tax Rolls: 57.2 million dollars • Residential Lands Property Tax Rolls: 197.2 million dollars • Employment lands support jobs,
business activity, and multiple City
revenue sources beyond property tax
• Fiscal analysis shows residential uses
as net-cost uses, while commercial
and industrial uses generate positive
net revenue.
• Single Family: -$28,000/ac
• Industrial: +$60,000/ac
• Preserving employment land helps
San José grow jobs, attract
investment, and support long-term
service funding
A Few Takeaways
The economy is stable, but under pressure
Large employers anchor the economy, small businesses provide resilience
Revenues are being supported by structural shifts in how people spend
Preservation of Employment lands is essential
Long-term competitiveness depends on retaining workforce and enabling growth
Jen Baker
Director, Office of Economic Development + Cultural Affairs [email protected]
Chris Shafer
Vic Farlie
Noelle Rabago
Doug Moody
Blage Zelalich
Acknowledgements