Midpeninsula Post

Palo Alto City Council approves $1 billion budget for the 2024 fiscal year

Palo Alto City Hall in October 2022. (Yoochan An)

The Palo Alto City Council approved a $1 billion budget, the city’s highest ever budget, for the 2024 fiscal year by a vote of 6-1 last month.

The new budget surpasses pre-pandemic spending by more than $250 million and includes funding for priorities such as increasing city staff, expanding art programs and supporting nonprofits. The budget also includes spending for the 2024-2028 Capital Improvement Plan, which covers infrastructure projects such as upgrading the city’s electrical grid, reducing natural gas use, redesigning rail crossings for increased rail traffic, rebuilding Fire Station 4 at Mitchell Park and repaving certain streets.

Following three years of reduced spending, the 2024 budget marks a return to a normal financial situation, city budget manager Paul Harper said. The overall budget of $1 billion includes a capital budget of $355.3 million, which provides funding for longer-term investments. Capital budget funding is used under the CIP, which will spend approximately $1.2 billion over the next 5 years. As the COVID-19 pandemic winds down and tax revenues increase, the city is better able to afford higher budgets, council member Ed Lauing said.

“We’re in a good place starting this budget year because revenues have popped now,” Lauing said. “Since the pandemic, they’re coming back. And our forecasts on ongoing revenue look quite positive.”

The only council member to vote against the budget was Greg Tanaka, who cited concerns about excessive spending. Tanaka criticized the growth of city management staff, and said that new city hires should be more directly involved in serving the community.

“Our expenses are growing faster than our revenues, and that’s not a good situation,” Tanaka said. “The city manager’s office is growing by about 8%. I think that we should have our growth in areas directly serving the public. I don’t think adding more management is a good thing.”

As a part of the budget, $279.1 million will be earmarked specifically for a general fund, which will provide for city services such as community services, library services and public safety services. The general fund does not provide for utilities.

“This is really a budget that returns our services to our prior levels and addresses some of the key forward-looking needs that we have,” council member Pat Burt said. “We are really grateful that we can move forward in those directions.”

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