Once again, the mayor said, the city will be in the "toughest budget cycle we have seen" during the next fiscal year.

City revenue is expected to fall for the third consecutive year. The state continues to siphon away city funds--so far, the mayor said, the state of California has grabbed $2.6 billion from local governments.

All of that adds up to a $57 million deficit for the city's budget, Gonzales said. He suggests sticking a finger in the dike by draining the remaining $10 million in the city's economic uncertainty reserve.

"We have been smart with taxpayer dollars," he said. Some local budget watchers might raise a few eyebrows at that, in light of some high-profile and high-cost budgetary crises such as the $47 million cost overrun for the new city hall (construction now behind schedule); the $3 million Cisco phone system fiasco; and the $11.9 million cushion the mayor added to Norcal Waste Systems' garbage contract with San Jose without input from the city council.

And Gonzales' budget message is vague on details. Libraries might close one day during the week. Fire and police dispatchers may have to learn to fill in for each other. Run-down neighborhoods could have less grant money available for renovation. Visiting residents of other cities could have to dig deeper into their pockets to pay higher fees than San Jose natives. And schools may find themselves with fewer crossing guards.

However, the mayor still plans to crack down on crime, truants and red-light runners. He also personally delivered a proposal to stem-cell research company California Institute for Regenerative Medicine to encourage the firm to build headquarters in San Jose as part of a local economic rejuvenation strategy.

Mayoral spokesman David Vossbrink said the purpose of the message is to outline priorities. "When the city manager submits the proposed budget in May, he also will be providing a flock of budget memos from staff that respond to the directions and questions from the mayor and council," he said.