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Council splits over whether to raise taxes or cut services as FY27 gap looms
Summary
Council members voiced differing approaches to a projected FY27 shortfall: some urged keeping the current adopted tax rate and finding internal cuts or fee increases, while others favored a limited tax-rate increase (current adopted plus bond debt) to protect services and the fund balance; no vote was taken and staff asked for directional guidance ahead of Aug. 18.
Council discussion centered on three interrelated choices: target fund-balance percentage, whether to raise the property-tax rate to cover new debt/service pressures, and where to find additional cuts. Some members urged holding the current adopted rate and pursuing spending reductions or enterprise-fund fixes. One council member argued that increases in enterprise fees (water, solid waste) do not flow to the general fund and so cannot be relied on to close the general-fund gap.
Other council members said the council should consider a modest tax-rate adjustment to reflect voter-approved bond debt, citing the need to preserve services and avoid deeper staffing cuts that could degrade public safety and core city operations. Multiple members emphasized the political sensitivity of tax increases and the importance of communicating clearly to residents that part of any increase stems from voter-approved bond debt. Council did not vote; staff asked members to provide a directional preference so they can prepare an August 18 proposed budget consistent with the council’s guidance.
