Walnut Creek Keeps City Paychecks Unclaimed Amid Budget Gap

City leaves 10% of desks vacant to shield local services from $6.3 million shortfall driven by drop in sales tax revenue.

Published on Mar. 9, 2026

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Facing a $6.3 million budget gap, the Walnut Creek City Council voted to leave one in ten city desks vacant and paychecks unclaimed in order to shield local services from cuts. The shortfall is driven by a sudden drop in sales tax revenue, particularly from the auto and transportation sectors, after a change in reporting practices by the California Department of Tax and Fee Administration.

Why it matters

This strategy allows Walnut Creek to avoid immediate program cuts while the city waits for clarity from the state on the sales tax reporting change, which has also impacted a dozen other cities with auto-dealer agreements. However, it's unclear how leaving positions vacant will directly affect city services and residents.

The details

To address the $6.3 million budget shortfall for fiscal years 2026 and 2027, Walnut Creek has already taken steps like eliminating 1.25 full-time positions, cutting hourly staffing and overtime, and reducing operations and maintenance spending. The city is now relying on a 10-11% vacancy rate citywide to save on salaries and avoid tapping the general fund. City officials estimate Walnut Creek will collect about $29.67 million in sales tax in fiscal year 2026, roughly $2.11 million below budget expectations.

  • Walnut Creek noticed the drop in sales tax revenue in fiscal year 2025.
  • The California Department of Tax and Fee Administration changed reporting practices, affecting revenue through at least 2027.

The players

Walnut Creek City Council

The city council unanimously backed a staff plan to keep a 10-11% vacancy rate citywide to address the budget shortfall.

Kirsten LaCasse

Walnut Creek's Administrative Services Director, who told councilmembers about the drop in sales tax revenue.

Dan Buckshi

Walnut Creek's City Manager, who said a dozen other cities with auto-dealer agreements also saw revenue changes due to the state's reporting adjustment.

Kevin Wilk

Walnut Creek's Mayor, who said the city has contacted state lawmakers for help in addressing the issue with the state tax agency.

Cindy Darling

A Walnut Creek Councilmember who asked whether the state might ultimately reverse the reporting change.

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What they’re saying

“It's been extremely frustrating working with the state bureaucracy on this and I am really hopeful that our legislators can help untangle that bureaucracy for us.”

— Dan Buckshi, City Manager (Patch)

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

What’s next

The city is waiting for clearer answers on the state tax change, a citywide fee study, and updates to the long-term financial forecast. The mayor said Walnut Creek has contacted state lawmakers for help in addressing the issue with the state tax agency.

The takeaway

This case highlights the challenges cities face in managing budget shortfalls, particularly when revenue sources are impacted by changes in state policies. Walnut Creek's strategy of leaving positions vacant aims to protect services, but the long-term effects on residents remain unclear.