San Mateo finance director: deficit trimmed but structural gap remains; two‑year budget planned

Finance Director Abby Feer told attendees during the State of the City Q&A that the city budgeted about a $12 million deficit for fiscal year 2025–26 but, based on current revenues and expense management, now expects a deficit closer to $7 million. Feer said staff plan to present a two‑year budget (fiscal years 2026–28) and a 10‑year forecast at a study session for the city council on April 20.

Feer said the city expects structural pressure on revenues and anticipates continuing deficits in the approximate $5 million–$7 million range unless revenue assumptions change. She said staff are monitoring revenues, controlling expenses, and the city has updated its general fund reserve policy to protect long‑term fiscal health.

The mayor separately noted the city will conduct community outreach on a potential 2026 sales‑tax measure as one option for sustaining essential services, and staff will continue to review expenditures and a cost‑allocation study to identify efficiencies.