Vallejo Council Demands Fix for $20M Budget Shortfall

City manager given 2 weeks to produce plan to address projected deficit for next fiscal year

Published on Feb. 25, 2026

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Facing a looming $20 million budget shortfall that could necessitate layoffs in the approaching fiscal year, the Vallejo City Council has given the city manager two weeks to produce a plan to fix the structural deficit. The council voted to require the city manager to present a savings plan by March 10 to address the projected shortfall in the 2026-2027 fiscal year budget.

Why it matters

Vallejo has struggled with budget deficits in recent years, and the latest projected $20 million shortfall could force the city to make difficult decisions about staffing and services. The council's demand for a fix underscores the urgency of addressing the city's financial challenges, which have been exacerbated by factors like low revenue growth and rising employee costs.

The details

The projected 2026-2027 budget shortfall is due to low revenue growth (1.3%) and increasing employee compensation, pension contributions, and other expenses. The council voted to require the city manager to present a plan by March 10 to address this deficit, as they felt they could not make appropriate mid-year budget adjustments for the current fiscal year without knowing how the larger deficit will be resolved. The council expressed concerns about adding or unfreezing positions now, only to potentially have to lay off new hires later.

  • The council gave the city manager a 2-week deadline to produce a plan by March 10.
  • The council is scheduled to revisit the 2025-2026 mid-year budget at its March 10 meeting.

The players

Andrew Murray

Vallejo City Manager

Nalungo Conley

Vallejo Assistant City Manager and Acting Finance Director

Andrea Sorce

Mayor of Vallejo

Alexander Matias

Vallejo City Council Member

Tonia Lediju

Vallejo City Council Member

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What they’re saying

“You can't look at mid-year this time around without dealing with the request that has been made. We need that information.”

— Tonia Lediju, Vallejo City Council Member

“I don't want to hire somebody and then have to slash that position.”

— Andrea Sorce, Mayor of Vallejo

“What a structural deficit means is that if we were to hire for every position we budgeted for, we will be spending $20-plus million more than we are bringing in and in three years we will be bankrupt.”

— Andrea Sorce, Mayor of Vallejo

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.