S.F. and Oakland are eyeing big deficits. Why not San Jose?
Some of the Bay Area’s largest cities are facing truly eye-popping budget deficits. San Francisco is projecting a $290 million shortfall. Oakland, short by $177 million, isn’t faring much better. But down south, the outlook is a bit sunnier. San Jose is reporting a $35.3 million surplus. Why such a divergence? Economists and budget officials attribute the disparity to San Francisco and Oakland’s heavy reliance on tax revenues that are still recovering sluggishly from the pandemic’s economic gut punch. The cities blame the down year on a mixture of poorly performing key revenue streams and the drying up of federal pandemic-related funding. San Jose, on the other hand, has come away generally unscathed by leaning on a tax base that’s largely weathered negative financial forces. Worth noting: The surplus in the FY2023-24 budget remains small when compared to its $5.2 billion total budget — less than 1%. “We’re in a positive position,” city budget director Jim Shannon said. “It’s not like we’ve got money to burn, by any means.” Key to the large discrepancy between the cities is the real estate transfer tax, levied when