City of Lawrence Proposes Largest Property Tax Rate Increase in 50 Years, Majority of Funds Allocated to Savings Account

Lawrence City Commissioners are facing a decision on whether to approve the city’s largest property tax rate increase in at least 50 years. The proposed increase is intended to fund various projects and initiatives, including sidewalk maintenance and city employee raises. However, a review of the proposed 2025 City of Lawrence budget reveals that the majority of the tax increase revenue would actually be used to bolster the city’s reserve fund.

City Manager Craig Owens has recommended increasing the city’s general fund balance account by $3.44 million in 2025, with nearly 65% of the revenue from the property tax rate increase going towards this purpose. Owens argues that rebuilding the fund balance account is crucial for protecting against unforeseen events and economic downturns.

Critics of the proposed tax increase point out that if the city were willing to maintain the fund balance at its current level, the property tax rate increase could be reduced significantly while still funding essential projects. The debate over the tax increase and fund balance policy is expected to continue as the City Commission reviews and debates the budget in the coming weeks.

In addition to the property tax rate increase, the city is also preparing a $4 million emergency budget plan for 2024 to address lower-than-expected sales tax collections. The plan may involve spending cuts and dipping into fund balance accounts, such as the special recreation fund, which currently has excess reserves that are not being proposed for use in the 2025 budget.

Overall, the budget review raises questions about the city’s fund balance policies and the management of reserve funds across various city departments. City officials are expected to provide further clarification on the proposed budget and emergency spending plan in the coming weeks.