City manager claims 1/2-cent increase to 9.25% needed due to inflation, unfunded state mandates; would last 7 years
On July 22, 2024, the Lafayette City Council placed a funding measure on the November 2024 ballot, asking Lafayette voters to authorize a local sales tax increase of 1/2 cent (half a penny for every $1 spent locally) for seven years to maintain the current level of City services. This measure will require a 50% +1 vote to pass.
At a previous City Council meeting, City Manager, Niroop K. Srivatsa, explained that due to inflation, prices on everything from materials, to insurance, to labor have continued to increase. Furthermore, the State continues to impose a number of unfunded mandates. As a result, the City is facing a structural deficit of more than $2M annually, beginning in fiscal year July 2024-25.
If approved by voters in November, all the revenue from the sales tax would go directly into the City’s General Fund; The General Fund provides funding for City services and facilities including:
- Maintaining public streets and storm drains and providing timely pothole repair.
- Sustaining wildfire preparedness activities.
- Maintaining the number of sworn police officers at the current level.
- Services for senior citizens.
- Maintaining city parks, open spaces, paths, and playfields.
- Traffic safety improvements on our streets and roads for all users including people driving, biking and walking.
- Continuing support for our community partners like the Chamber of Commerce and the School District.
Lafayette’s current sales tax rate is 8.75%. If voters approve a ½ cent sales tax measure, Lafayette’s rate will increase to 9.25%, equal with the rate in Pleasant Hill and Walnut Creek and lower than Orinda, Moraga, and Concord. The new rate would go into effect starting April 1, 2025, for seven years.
“The half cent (1/2%) increase, if approved by Lafayette voters, would generate approximately $2.4 million annually, which, according to current projections, is enough to maintain the level of service presently being provided. If the voters do not pass the measure, the Council will have to make difficult decisions about which programs and services to reduce or eliminate,” said Administrative Services Director Tracy Robinson. “Filling a $2M annual deficit is approximately 10% of the City’s General Fund, and it would require cuts across all City departments, including police, public works, planning, engineering, parks and recreation, and administration,” Robinson added.
“One reason the City Council chose to place a sales tax measure on the ballot is because sales tax is paid by visitors who dine and shop in Lafayette, so funds would be brought into the community from people who reside outside the community but who utilize our public infrastructure and services,” explained Vice Mayor Wei-Tai Kwok.
For many years, the City has been able to balance its budget, build a healthy emergency reserve, and operate frugally, however the current state of the economy coupled with unfunded State mandates that cities are obligated to fulfill have all contributed to the structural deficit. The City has foregone new projects recently and froze the hiring of four staff positions, however, the City Council believes that the additional cuts in expenses to address the $2M deficit would negatively impact Lafayette residents, so instead are asking voters to consider increasing the sales tax rate for seven years.
More information about the City’s financial situation and the funding measure is available on the City of Lafayette’s website at www.lovelafayette.org/FiscalSustainability
