May 5, 2019 – Palo Alto Matters
The Council Finance Committee will kick off three budget hearings on May 15. The city’s proposed Fiscal Year 2020 Budget anticipates healthy revenue growth from sales tax (9.9 percent), property tax (7.3 percent), and hotel tax (17 percent), but expects labor costs to rise by 9.2 percent – a costly increase when the city has so many infrastructure projects lined up. Taking that and the city’s growing pension and retiree benefit obligations into account, even with healthy revenue growth, the proposed budget calls for a reduction of the equivalent of 9.95 full time employees, phasing back of city investments in Project Safety Net (a community collaboration to promote youth well-being), and a “service inventory” to evaluate city programs and their costs, with an eye toward reducing ongoing costs and identifying areas that can be cut to provide $4 million in savings to put toward long term pension liabilities.
“This budget reflects the very difficult straddle we have before us, in which we have continued cost escalation of everything in the Bay Area, the increase in demand for services and infrastructure as our community grows and our move to accurately recognize some of our cost structure, including our commitment to fund our long-term liabilities. Those things to some extent mutually exclude one another.”– Mayor Eric Filseth
The May 15 budget hearing begins at 1:00 pm (Community Meeting Room, City Hall). Click here for agenda, including links (at top of page) for proposed capital and operating budgets. Subsequent hearings will take place on May 23 and May 28.