Oakland budget fight focuses on city revenue

The money's there -- so why is the city failing to fund critical services?

On June 24, Oakland’s City Council will be six days away from the June 30 deadline to pass the next two-year budget. A special meeting is scheduled for Monday/24 at 5pm and the struggle to move the city forward is once again, center stage. Though Oakland’s top executives have resorted to name-calling and bullying to justify under-reporting revenues, community groups and independent auditors have relied on data to prove that things can, and should, be done differently.

Council President Rebecca Kaplan has presented a plan that counts on what she says are realistic revenue projections.

The process: City law requires the mayor to present a budget. The next step is for the council president to present a set of amendments reflecting community input and the needs of the public.

When Councilmember Rebecca Kaplan submitted her budget, however, the mayor and staffers including City Administrator Sabrina Landreth vehemently lashed out at Kaplan, creating the false narrative of personal animus. They have stalled talks, refused to provide critical financial information, and aggressively lobbied City Council members to disavow Kaplan’s community-centered amendments.

The mayor’s narrative is being skillfully framed as a political vendetta and this is simply not the case. Right now, those challenging business-as-usual revenue projections are the council’s most progressive members. As a result, they have endured the wrath of the mayor and media.

What’s causing so much angst for city administration comes down to one main question: Is the city bringing in enough revenue to pay for its most vital services?

Oakland is bringing in about $200 million more in local tax revenues than it did eight years ago. However, this growth has not been reflected in the budget. According to an independent report issued in June 2019 by Harvey Rose Associates, an independent management consulting firm which performs fiscal analysis for cities like San Francisco and Santa Clara, between fiscal year 2014-15 and fiscal year 2017-18, “the Finance Department has underestimated business license revenue, the real estate transfer tax, the transient occupancy tax, and the utility consumption tax.” When revenue assumptions remain low, tens of millions in revenues are not budgeted toward services, and instead are collected as a surplus at the end of the fiscal year. This fiscal year alone, the City of Oakland is expected to close its books with almost $40 million in revenue that was never budgeted toward services. Harvey Rose recommended that City Council adopt more aggressive revenue assumptions to more accurately budget based on the reality of explosive revenue growth.

Another independent report issued in 2019 by Beacon Economics, an independent economic consulting firm that performs analysis for the Cities of Los Angeles and Long Beach, found that the strong growth of the Oakland economy is likely to continue. Given these economic trends, now is the time to truly invest in Oakland.

Many city workers remember the sacrifices they made during the last economic downturn. “People don’t like to talk about it,” says Dwight Mcelroy, a longtime city worker in the paving department, “but when the city came to us and asked us to accept furlough days, many of us lost our homes, were forced into bankruptcy, or couldn’t afford child care anymore. A lot of us are living paycheck to paycheck, and we have never been able to make up those losses. During the recession, the city came to its workers and told us we were all in the same boat, but when the waters got deep, they started throwing us overboard.”

To provide community input and give clarity to the public’s needs, the ReFund Oakland coalition, a group of community and labor organizations, has crafted the People’s Budget, which prioritizes solving the problems identified by Oakland’s residents, including the affordable housing and homelessness crisis, vital services, and the epidemic of illegal dumping of trash on the streets. With more than 300 unfilled positions across the city of Oakland’s workforce, many of Oakland’s residents are not receiving the services their taxes are paying for. After years of economic growth — for some — the artificial austerity imposed by these vacant positions is difficult to justify.

“A city’s budget reflects its values,” says Cat Brooks of the ReFund Coalition. “In the 2017 cycle we saw that city leadership did not value the needs of the unsheltered, our community members who are struggling to afford rent, the need for vital services, our environment, city workers, nor our artists. We are hopeful that this year, with new leadership in council, we will see a budget that reflects the values of the people of Oakland; one that is just, equitable and humane. Thousands of people are represented by the ReFund Oakland budget and it addresses some of the most pressing issues in our city. I encourage city councilmembers to revisit what happened last budget cycle and the election that followed. They should remember that 2020 is just around the corner.”

The ReFund Coalition includes ACCE Action, EBASE, EBHO, SEIU 1021, Street Level Health Project (SLHP), Causa Justa::Just Cause, IFPTE Local 21, Oakland Tenants Union (OTU), CURYJ, the Anti Police Terror Project (APTP) and many others.