Oakland’s problem isn’t a lack of revenues. It’s the refusal of the mayor and City Council to rein in soaring spending and responsibly pay down debts.
Facing yet another deceptive tax measure on the March 3 ballot, voters should stop enabling this reckless behavior.
Especially when Oakland’s economy is booming. Municipal revenues over the past five years have increased 28 percent, far exceeding expectations.
But, for the city’s elected leaders, there’s never enough. Mayor Libby Schaaf and the City Council, led by Rebecca Kaplan, have an insatiable appetite for property tax revenues.
They complain about the soaring cost of housing while they make the problem worse — for homeowners and for tenants. That’s right: Landlords can immediately pass on the cost of new property taxes to tenants in buildings up to 15 years old, and apply it to other units when a new tenant moves in.
City property owners pay 10 different annual supplemental taxes, on everything from half-century-old public employee pension debt to library services and road repairs. The recent buyer of an Oakland median-priced ($739,217) home, in addition to the base 1 percent property tax rate, would currently pay about $1,900 a year just in extra city taxes.
Click here for a complete list of our election recommendations.
Get editorials, opinion columns, letters to the editor and more in your inbox weekday mornings. Sign up for the Bay Area Opinion newsletter.
When it comes time to sell, an 11th tax, on the title transfer of that home, would be nearly $12,000. A 12th tax, for $198 annually, which failed to garner enough voter support in 2018, is pending in court because Schaaf and the council refuse to accept the outcome of the election.
Now, they are seeking approval for a 13th tax, an annual property levy of $148 for a single-family home, with higher fees for apartment buildings and businesses. It would last 20 years and increase annually with inflation.
Enough is enough: Voters should end the city’s tax addiction by voting no on Measure Q.
The real agenda
Ostensibly, this new tax is to help house the homeless and clean up city parks. The homeless angle was an afterthought.
Helping the homeless was added in, and then given top billing on the ballot, when polling showed that a tax for park maintenance, a basic city function that should be funded out of existing revenues, would not garner the necessary two-thirds voter approval.
The amount of the tax, originally conceived to be $68 or $98, was jacked up to $148 when the polling showed the higher amount wouldn’t hurt the results if funds for the homeless were included.
Seriously, this is how policy is made and taxes are conceived in Oakland. It’s all spelled out in a memo from the city administrator to the council.
Never mind that about a third of the $20 million-plus Measure Q would raise annually would go to parks, landscape maintenance and recreational services and, if you read the fine print carefully, 35 percent of the money could be essentially siphoned off to supplement any part of the city’s budget.
Never mind that city voters in 2018 already passed a tax on vacant parcels to fund homeless services and resources and in 2016 passed a property tax increase for a bond measure that included $100 million for affordable housing.
Never mind that voters countywide in 2016 passed a $580 million bond program and tax increase to provide up to 8,500 units of affordable rental housing, supportive housing for homeless people, and helping low- and middle-income households purchase homes. Of that money, Oakland is supposed to receive about $50 million.
It’s never enough.
The fine print
The most disingenuous part of Measure Q is contained in that fine print.
The measure calls for the money to be distributed as follows: 64% for parks, landscape maintenance and recreational services; 30% to address homeless issues; 5% to address water quality and litter reduction; and 1% for auditing and evaluating the spending of the money from the measure.
But then there’s this detail: “No more than 55% of the revenue allocated to parks, landscape maintenance, and recreational services may be used to preserve current parks operational services … .”
In other words, 55% of the parks portion of the money can be used for current park operations, which frees up a like amount of money that would have gone there for any other governmental use.
Doing the math, freeing up 55% of the parks money, which is 64% of all the money, means that 35 percent of all the Measure Q money could be indirectly used for any city purpose.
And “in the event of extreme fiscal necessity,” the City Council could approve a resolution to spend all the Measure Q money to fund existing services in the four categories, making a like sum available for any other government purpose.
In other words, the entirety of Measure Q could be used to indirectly fund the general operations of the city.
Soaring pension costs
Measure Q, of course, was never primarily about helping the homeless. And, as we now see, it’s not necessarily about parks, either. It’s about creating funding for still more city jobs — throughout the city.
That’s what happens when City Council members’ campaigns are funded largely by employee labor unions, who really run the city. They will be the beneficiaries of the new parks jobs if Measure Q passes, just as they have reaped the spoils of special taxes for other city services.
Rather than pay down debt with the tax revenue from the booming economy, the city has added 516 employees to the city workforce in the past five years, a 13 percent increase.
Not surprisingly, that means that the city’s salary and pension costs are soaring. While engaging in that hiring binge, city leaders have failed to bring down the city’s whopping $2.8 billion debt for underfunded city retirement benefits.
Payments on that debt will escalate. Which helps explain why the city administrator forecast last year that Oakland faced annual budget shortfalls of $29 million-$51 million in each of the following five fiscal years. And why the state auditor called Oakland the 13th most fiscally challenged city in California.
Despite the 28 percent increase in revenues over the past five years, the mayor and council have failed to meaningfully pay down their debt before the economic downturn that’s inevitable. And when that downturn arrives, those same city officials will come running back to voters asking for even more taxes.
Nothing will change if voters pass Measure Q. That money will be spent in a flash.
Our advice: Don’t feed the addiction. Vote no.
