Lafayette To Seek Voter Approval For Sales Tax Measure

LAFAYETTE, CA—Lafayette residents won't be voting only for their presidential candidate in the November general election; the city is asking voters to approve a local half-cent sales tax increase.

The Lafayette City Council voted Monday to place the local funding measure on the November 2024 ballot. The vote was 4-0 with Mayor Gina Dawson absent.

The sales tax hike—half a penny for every dollar spent locally—would maintain the current level of city services and would remain in effect for seven years starting April 5, 2025.

The measure requires a simple majority vote to pass, meaning it needs approval by 50 percent, half of the city's voters, plus one more.

At a previous council meeting, City Manager Niroop Srivatsa explained that due to inflation, prices on everything from materials to insurance to labor have continued to increase.

Coupled with a number of unfunded mandates the state continues to impose, the city faces a structural deficit of more than $2 million annually starting with the current fiscal year, which began July 1, the city said Thursday in a news release.

If approved by voters, all the revenue from the sales tax would go directly into the city’s general fund, which pays 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 local streets and roads for people driving, biking and walking.
• Continuing support for community partners such as the Chamber of Commerce and the School District.

Lafayette’s current sales tax rate is 8.75 percent. If voters approve the half-cent sales tax measure, Lafayette’s rate will increase to 9.25 percent, which is in line with the rates in Pleasant Hill and Walnut Creek and lower than Orinda, Moraga, and Concord where the tax rate is 9.75 percent.

“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, " said Administrative Services Director Tracy Robinson. "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."

According to Robinson, filling a $2 million annual deficit is approximately 10 percent of the city’s general fund.

"It would require cuts across all city departments, including police, public works, planning, engineering, parks and recreation, and administration," Robinson said.

For many years, the city has it has been able to balance its budget, build a healthy emergency reserve, and operate frugally, city officials said. However, the city said, the current state of the economy, coupled with unfunded state mandates that cities are obligated to fulfill, have all contributed to the structural deficit.

City Spokesperson Suzanne Iarla told Patch that among the unfunded state mandates are programs and policies surrounding stormwater pollution, where the state creates programs and policies that cities must carry out without additional revenue.

"The water board consistently increases the requirements for compliance with clean water regulations without giving the cities any ability to increase the revenue necessary to complete the tasks," Iarla said. "Over the last 10 years, costs related to these services have increased by 78 percent and as a result, Lafayette has a current gap of about $300K per year."

Another recent example of an unfunded state mandate is the staff, time and resources needed to implement affordable housing requirements.

"In addition to the $215K annually set aside to assist with affordable housing projects, 60 programs were included in our Housing Element Update that the city must implement," Iarla said. "That alone will require one full-time employee for the next few years."

• RELATED: Lafayette Housing Element: State Gives Green Light But Not Final OK

Lafayette has recently foregone new projects and frozen the hiring of four staff positions, and the City Council believes the additional expense cuts to address the $2 million deficit would negatively impact Lafayette residents.

Vice Mayor Wei-Tai Kwok explained one of the reasons the City Council supports the sales tax measure.

"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," Kwok said.

More information about the city’s financial situation and the proposed funding measure is posted on the webpage, Lovelafayette.org/FiscalSustainability.