On Monday, the Lafayette City Council agreed to place a half-cent sales tax measure with a 7-year sunset and citizens oversight committee on the November ballot.
Facing a $2 million budget deficit, the city and its council had been working on a revenue enhancement and determined a sales tax would be the best option—noting the tax is partially be paid by visitors who dine and shop in Lafayette, not just residents and Lafayette’s current sales tax is lower than Moraga, Orinda, Walnut Creek, Concord and Pleasant Hill
If approved by voters, the half-cent sales tax would generate an estimated $2.4 million annually—thus preventing the city from avoiding cuts for basic services but leave little room to accommodate any other programs.
According to the city, the deficit is due to increased inflation, rising costs for insurance, additional costs for infrastructure maintenance, and more state laws and mandates which increase local government administrative and financial burdens.
Next step, the council will vote on the ballot language at an upcoming meeting before it heads to the ballot.
Note – during the discussion, it was stated that with inflation and other projects/costs, the half-cent tax still will not be enough revenue for services in the future due to inflation and other cost increases, but the council/city admitted it boxed themselves into the $2 million number early on in the process when outreaching to the community. The council was also criticized for in the past, threatening cuts, but never making them–voters wanted proof of service reductions if a tax does not pass.
Council Recap
After a presentation on polling and public comment, the council then discussed the ballot measure.
Polling data from June 24-26 showed:
- 96% of people surveyed were satisfied with Lafayette quality of life.
- 74% not aware the city was facing a deficit of more than $2 million.
- 84% confined a $2 million deficit will impact quality of life.
- 59% support new revenues vs cutting back services
- 1% sales tax: 48% likely yes and 57% potentially yes.
- 3/4% sales tax: 50.50% likely yes and 56% potentially yes
- 1/2% sales tax: 55.5% likely yes and 61% potentially yes.
Mayor Gina Dawson explained there were plenty of things they needed funding for but were not yet in the budget such as maintenance costs for projects, the library, the community center, crossing guards and other inflation costs.
“The half percent looks like more of a sure thing, but it’s not necessarily, I think, the responsible way. I think we go for the 3/4 percent because I think we can easily show its part of the budget we don’t have but we need,” said Dawson who added it may be harder to sell but they can make it real in different ways.
Councilmember John McCormick shared he believed the 1/2 cent tax was an “easy message” stating “if you like Lafayette the way it is, this is what you get and you don’t have to promise anything.” He stated his worry was the 3/4 or full percent, they get into “trust us” kind of thing.
“A half cent is to maintain, the three quarter is to do some additional stuff,“ said McCormick.
Vice Mayor Wei-Tai Kwok said the message to date has been a $2 million deficit gap, but it was just a basic gap they have but there are other anticipated expenditures of city infrastructures.
“We have something bigger, but we put that $2 million number out there for so long, that is why its sort of a slam dunk to finish off the $2 million, but when you study this is more detail, there are actually other infrastructure expenditures that are right in front of us that we haven’t even budgeted for,” explained Kwok noting when the electric studied the issue, the numbers moved in greater support. “We have boxed ourselves in with a number.”
Councilmember Carl Anduri expressed concerns with a 1% tax that they would have a difficult time hitting 50%.
Councilmember Susan Candell said the 1/2 percent doesn’t leave them in a good spot and would love to do the 1% tax but called it “too risky”.
“I would love to provide all this stuff and do more, but I just don’t think its going to pass,” stated Candell. “I am torn between the 1/2 percent and 3/4 percent. I don’t know if we are going to get over the hump at 3/4 but it’s a heavy lift because it’s a complicated message. The 1/2 is going to be easier.”
Anduri further highlighted all the ½ percent will do is provide the same exact service provided now—if it doesn’t pass, you are not going to get the same services they will have to cut.
Dawson attempted to gain a consensus of what percentage what the council wanted to move forward with Anduri, Candell and McCormick learning towards a ½ cent.
Kwok then wanted to discuss a sunset of whether it would be 7, 10 or 15 years—polling showed they wanted a sunset with polling showing 7-years per the consultant. The consultant advised them not to go beyond 10 years.
Dawson further questioned if they were selling their constituents short by “being so conservative”.
Candell shared she would support the 3/4 if they could create the argument to get it passed but she was gun-shy.
Dawson again attempted to gain consensus on how to move forward with a 1/2 cent sales tax.
- McCormick shared, “We can’t lose. I want a solid single right now and not a home run. I want to sure up our thing. But a slight squeeze of the 10-year so we can the get house in order.”
- Anduri – Same
- Candell – Same
- Kwok – “I am fine with that,”
- Dawson – “I am too because I think it’s very important, we are unanimous in supporting this”
She then confirmed they were looking at moving forward with a 1/2 sales tax with a 10-year sunset and a citizen’s oversight committee. The council directed staff to work with a subcommittee to establish ballot language for the November 2024 election.
However, Anduri asked the polling consultant again if he had any reservations, which he did, noting polling data showed better support at 7-years.
After some debate, the council agreed to move the sunset from 10-years to 7-years.
The item passed in a 5-0 vote. The ballot measure will return for final approval with language that will be placed on the November 2024 ballot.
Documents:
Previous Stories:
- July 6 – Lafayette Set to Ask Voters to Increase Sales Tax Rate
- Budget overview Video – Watch (32 min)
- June 10 – Lafayette Set to Talk Budget, Possible Sales Tax
- May 30 – Sales Tax Measure Being Considered for Lafayette
- April 29 – Lafayette Says Road Repair Costs Increased by 33%
- March 11 – Lafayette Looks to Sales Tax Increase to Fix Budget Deficit
