East Palo Alto Budget Overview

FY2025-26 Adopted Budget

Budget Signals

• The General Fund is projected to spend more than it receives and use fund balance.
• The city identifies about $2.0M of the General Fund gap as structural, meaning ongoing costs exceed ongoing revenues.
• The all-funds budget remains positive because capital and enterprise fund activity offsets the operating deficit in the citywide total.
• Property tax is the largest General Fund revenue source, while sales tax and business-license-related General Fund support are under pressure.
• Reserves are above the city's minimum policy target, but the city warns that using reserves for ongoing operations is not sustainable long-term.

What Residents Should Watch

• Whether the city closes the roughly $2.0M structural General Fund gap without reducing core services.
• Whether sales tax, hotel tax, and state backfill assumptions improve or remain weak.
• How Measure JJ housing revenue is used for housing and anti-displacement purposes.
• Whether reserve use remains temporary or becomes a recurring operating strategy.
• Whether street lighting, flood protection, water, sewer, and street projects move from funding to delivery.
• Whether public safety spending growth changes service levels, response capacity, enforcement, or data tools.
• Whether Community Development capacity keeps pace with planning, building, housing, and development-review needs.