That means 28 current job vacancies will not be filled, and city employees may not see a raise next year.
Now the council and city officials are working to scrape together enough money to break even and give the employees a raise.
While mayor Tom Martin is optimistic, Councilwoman Linda DeLeon says even is not good enough.
"We're going into the bone now," said DeLeon, "and we did last year to."
DeLeon said the city has had a mindset of low taxation and keeping the budget tight, but that mindset is now coming back to bite them. With a narrow margin of tax revenue, the city has been allowed to deteriorate, and it's a battle to find funds any time there is a problem.
"I think it's a very bleak picture of Lubbock Texas," said Deleon. "Your streets are falling apart ,and it's not just 34th street or 82nd. It's all of them."
City planners blamed everything from gas prices to unexpected expenditures at Friday's council meeting.
Mayor Tom Martin said he hopes a solution will be found in the next several weeks.