Term
Deficit
Also known as: gap, shortfall
When planned expense is larger than expected revenue, leaving a gap the City must close.
California cities are legally required to adopt a balanced budget, so a deficit (or "gap") has to be closed by spending less, collecting more, or using reserves. Menlo Park's proposed FY 2026-27 budget has a $2.5M baseline gap (June 9 staff report p. G-2.7). The deficit rises to ~$2.8M if June 23 expenditures are incorporated (p. G-2.4), and falls to ~$1.8M if the proposed $703K of cuts are adopted (p. G-2.5).