In an effort to begin difficult budget conversations and grapple with an anticipated $6.5 million deficit, city finance staff will present to Lawrence city commissioners Tuesday, several months earlier than the budget is typically discussed.
The deficit is primarily driven by “payroll increases and rebuilding fund balance over the next several years,” according to a memo in the commission’s meeting agenda.
Specifically, city staff members will ask the commission to weigh in on the following, according to the agenda:
- “Is $2 million the appropriate amount to restore fund balance?
- Is there a continued commitment to staying at market compensation for all employees and employee groups?
- Are there areas of service the City Commission will not support reductions to balance the budget?
- Are user fees – specifically for Parks, Recreation, and Culture – a consideration?
- Does property tax need to be held flat or is there tolerance for some increase to offset service reductions? If so, what is the limit?”
But city staff members have also said they want the budget process to include the community more than it has in years past — and particularly at an earlier point in the year, well before the budget must be finalized. And some, if not all, of the questions posed here are likely to raise concerns for some community members just like they have in years past.
“It’s our community’s challenge, and we welcome participation,” City Manager Craig Owens said during an interview last month. “But we need participation that looks at it with the awareness that your neighbors are impacted by your decisions.”

The city’s approved 2025 budget lowered the mill levy, or property tax rate, just slightly — to 33.197 mills from 33.207. Most residents still saw their city property taxes increase, however, because property valuations increased. For the 2026 budget, the city’s total assessed property valuation is anticipated to increase 6.25%, to about $1.62 billon from $1.52 billion.
But the city’s biggest source of funds is more volatile — sales tax revenues, Owens said. The city overestimated by millions of dollars how much sales tax revenue it would receive during 2024, and that created unexpected challenges.
And Lawrence’s property tax base is peculiar in that so much property is owned by the city, county, school district, universities, nonprofits and other entities that don’t pay property taxes. “A very tiny slice of our pie, our land use pie, is commercial tax base” that pays a higher property tax rate, Owens said.
“I’ve heard at every budget hearing, clearly, ‘We really want these services. These are important to us. These are vital. We want this service level to be maintained,'” Owens said. “And so if we want all of those things to happen, we have, really, two options, and those are increase the tax rate to pay for it, or increase the base so that there’s a better economic engine to equalize the cost.”
A Balancing Act, an online program where residents can submit their budget priorities and other suggestions to the city for consideration during the process, will be open throughout the month of February, according to a timeline in the meeting agenda. Last year, it was open through the month of May — not until much closer to Oct. 1, the final deadline for the commission to approve the budget.

In addition, a new committee of seven community members and a new employee budget committee are helping the city manager’s office work through budget considerations over the next several months.
“We’ve taken a lot of measures to allow the community to walk with us in the process,” said Alley Porter, budget and strategic initiatives manager.
Rachelle Mathews, finance director, echoed Porter’s sentiments and said that government finance is complex, but “These conversations will become more and more productive as we get more people engaged in what we do and how we do it,” she said.
Lawrence voters in November approved an additional .05% sales tax, or a nickel per $100 spent, to fund affordable housing and homelessness initiatives. That will go into effect in April.
Lawrence city commissioners will meet at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St. See the complete budget agenda item at this link and the full meeting agenda at this link.
The commission accepts written public comment emailed to ccagendas@lawrenceks.org until noon the day of meetings. The commission also hears live public comment during meetings, both in person and virtually. Register to join the Zoom meeting at this link.
Meetings are open to the public, livestreamed on the city’s YouTube channel at youtube.com/@lawrenceksvideo and broadcast on Midco channel 25.
See previous coverage of the city’s budget at the links below.
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Mackenzie Clark (she/her), reporter/founder of The Lawrence Times, can be reached at mclark@lawrencekstimes.com. Read more of her work for the Times here. Check out her staff bio here.
Lawrence city budget coverage


Lawrence City Commission to hear early presentation on 2026 budget, projected $6.5M deficit
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