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On Monday, the Lafayette City Council voted to put a half-cent sales tax increase measure on the November ballot with a seven-year term and a citizen oversight committee.

Facing a $2 million budget deficit, the city and its council had been working on ways to raise revenue and concluded that a sales tax would be the best solution, noting that the tax is paid in part by visitors who eat and shop in Lafayette, not just residents. In addition, the current sales tax in Lafayette is lower than in Moraga, Orinda, Walnut Creek, Concord and Pleasant Hill.

If voters approve the half-cent sales tax, it is estimated to generate $2.4 million per year.This allows the city to avoid cuts in basic services, but leaves little room for other programs.

According to the city, the deficit is due to increased inflation, rising insurance costs, additional costs for infrastructure maintenance, and more state laws and regulations that increased the administrative and financial burden on local governments.

As a next step, the Council will vote on the wording of the ballot at a future meeting before it goes to the vote.

Note – during discussion it was noted that the half-cent tax will not be enough to raise revenue for services in the future given inflation and other projects/costs, but the council/city admitted they had committed to the $2 million limit early in the process when outreaching to the public. The council has also been criticized in the past for threatening cuts but never following through – voters wanted proof of service cuts if a tax was not passed.

Council summary

After a presentation of the survey results and the public comment, the Council then discussed the election proposal.

Poll data from June 24-26 showed:

  • 96% of those surveyed were satisfied with the quality of life in Lafayette.
  • 74% were unaware that the city was facing a deficit of over $2 million.
  • 84% of respondents fear that a $2 million deficit will affect their quality of life.
  • 59% are in favour of new revenues rather than cutting services
  • 1% VAT: 48% probably yes and 57% potentially yes.
  • 3/4% VAT: 50.50% probably yes and 56% potentially yes
  • 1/2% VAT: 55.5% probably yes and 61% potentially yes.

mayor Gina Dawson explained that there are many things they need funds for that are not yet in the budget, such as maintenance costs for projects, the library, the community center, school crossing guards, and other costs caused by inflation.

“The half percent looks more like a safe bet, but I don’t think that’s necessarily the responsible way to go. I think we should go with the three-quarters because it’s easier to show that this is a part of the budget that we don’t have but need,” said Dawson, who added that it might be a harder sell, but they could make it happen in a number of ways.

Council member John McCormick said he thought the half-cent tax was a “simple message” that said, “If you like Lafayette the way it is, that’s what you’re going to get and you don’t have to promise anything.” He said his concern was the 3/4 or full percent because they would be engaging in a “trust us” kind of behavior.

“Half a cent is used to maintain production, three-quarters is for additional things,” McCormick said.

Deputy Mayor Wei-Tai Kwok said the previous message had been a deficit gap of $2 million, but that was only a basic gap and other spending on city infrastructure was also planned.

“We have something bigger in mind, but we’ve been eyeing the $2 million for so long, so it’s a no-brainer to raise the $2 million. But when you look deeper, you see that there are actually other infrastructure expenses that are right in front of us that we didn’t even budget for,” Kwok explained, noting that after studying the issue, the numbers moved toward greater approval. “We’ve cornered ourselves on one number.”

Council member Carl Anduri expressed concerns that a tax of 1% would make it difficult for them to reach 50%.

Council member Susan Candell said that they would not be in a good position with half a percent and that they would like to impose the 1% tax but called it “too risky”.

“I would love to offer all of that and do more, but I just don’t think it will pass,” Candell said. “I’m torn between 1/2 percent and 3/4 percent. I don’t know if we’ll get over the hump at 3/4, but it’s a tough call because it’s a complicated message. At 1/2 percent, it gets easier.”

Anduri also stressed that the ½ percent will simply help provide the exact same benefits as now. If the bill does not pass, you will not receive the same benefits that will have to be cut.

Dawson tried to reach consensus on what percentage the council wanted to push, with Anduri, Candell and McCormick focusing on half a cent.

Kwok then wanted to discuss a term of 7, 10 or 15 years. Surveys showed that they wanted a term of 7 years, according to the consultant. The consultant advised them not to go beyond 10 years.

Dawson also questioned whether they were letting their electorate down by being “so conservative.”

Candell said she would support the 3/4 reform if they could find the necessary arguments to pass it, but she was hesitant.

Dawson again tried to reach a consensus on what to do with the half-cent sales tax.

  • McCormick said, “We can’t lose. I want a solid single now, not a home run. I want to protect our cause. But we want to squeeze the 10-year bond a little bit so we can get some order in.”
  • Anduri – The Same
  • Candell – The Same
  • Kwok – “That’s fine with me,”
  • Dawson – “Me too, because I think it’s very important. We unanimously support it.”

She then confirmed that they would consider implementing a 10-year 1/2 sales tax and a citizen oversight committee. The council directed staff to work with a subcommittee to determine ballot language for the November 2024 election.

But Anduri asked the pollster again if he had any reservations, to which he replied in the affirmative, noting that polling data showed better support after seven years.

After some debate, the Council agreed to extend the duration from 10 to 7 years.

The item passed by a vote of 5-0. The ballot proposal will be sent back for final approval with the language that will appear on the November 2024 ballot.

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