Oakland Voters Want to Know How the Next Mayor Would Fix the City’s Finances

On a recent Tuesday night, at least 80 people crowded into a small room in the basement of Oakland’s main library for a workshop about the city’s biennial budget process.

Prompted by a facilitator, they scanned a QR code with their phones and typed in questions about the city’s budget.

One by one, they appeared on a projector screen: Who makes the decisions? Who really takes responsibility? How bad is it? Why are we always in crisis? Why are we paying taxes and not getting services?

Oakland’s financial future is bleak. The city is working to close an $87 million shortfall in this year’s budget while also putting together another budget by June 30 that eliminates a $265 million deficit projected over the next two years.

Voters, concerned about the city’s finances, are searching for answers about how Oakland got here and — as they prepare to choose their next mayor in an April 15 special election following the recall of former mayor Sheng Thao — what the city’s next mayor plans to do about it.

“We need to know what’s going on,” said Jana Good, who sat in the second row next to her husband, Bruce Goldberg.

“The budget doesn’t look great,” Goldberg said. “We have some real tough choices to make. And I don’t know enough, so I’m here to learn more.”

In addition to mayor, voters are choosing a new city council member to fill a seat left vacant by former council member Nikki Fortunato Bas, who was elected to the Alameda County Board of Supervisors last year.

The city, which usually holds public workshops after the budget is complete in May, opted to hold two additional ones early this year because of the deficit, according to the League of Women Voters, which co-sponsored the workshops alongside the city, its Budget Advisory Commission and the nonprofit SPUR.

Understanding the budget process, Good said, would likely help the couple decide how they’ll vote.

“I don’t understand our budget well enough,” Good said. “I don’t even know personally how much control the mayor has versus the City Council. Like, who actually is making these decisions?”

Anna Matthai, a retired Oakland resident and League of Women Voters member, said she is tuned in to what candidates are saying about their plans for the budget and priorities for the city.

“I think we need to understand what their ideas are right now,” Matthai said. “They should be thinking about the budget right now.”

On the campaign trail, the two likely frontrunners in Oakland’s race for mayor — former East Bay Rep. Barbara Lee and former Oakland City Councilmember Loren Taylor — have presented contrasting approaches to fixing the deficit.

Lee’s campaign, focused on a message of unity, has emphasized her track record of bringing federal funding to Oakland while in Congress. Lee has said she would use her connections to bring more investment to the city with the establishment of a new office of public-private partnerships.

She has also said her priorities would include collecting city revenue from fines and parking tickets and making sure Oakland receives its share of funds from Measure W, an Alameda County sales tax approved by voters in 2020 intended for homelessness programs.

“We need a forensic audit,” Lee said at a mayoral debate held several blocks from the library on the same night as the workshop. “We need an audit that’s going to tell the taxpayers in this city where the waste, fraud and abuse is in our city.”

Lee, who has the endorsement and financial support of some of the city’s major unions, has also said cutting more jobs would be a last resort.

Taylor has marketed himself as a “professional problem solver” who, as a former engineer, would be best equipped to fix a “broken” Oakland. Taylor has said Oakland’s next mayor needs to be willing to make hard decisions, including cutting jobs if necessary.

“We have to understand that we did not get to this budget deficit overnight. It was a series of decisions that were made, decisions that were influenced in the process,” Taylor said at the same debate.

“The root cause of our financial struggles — corruption, mismanagement, self-dealing, not centering Oaklanders at the center of decisions that are being made — we have kicked the can down the road so long that there is no road left to kick it down,” Taylor said.

Taylor has advocated for the city to adopt zero-based budgeting, where all expenses must be justified, rather than making adjustments to an existing budget. He also argues that the city would benefit from refinancing its pension debt to reduce interest payments and getting companies that do business with the city to reduce their pricing by 10%–15%.

“These decisions have such an outsized impact on us and all the services like the library that we use from the city. So that’s definitely a consideration in deciding who to vote for for mayor,” said Erin Burns as she buckled her son into his seat on the back of her bicycle outside the library after the workshop.

Burns said she is leaning towards voting for Lee, 78. Her husband is more of a fan of Taylor, 47, because he thinks someone younger should be mayor.

“I consider budget to be upstream of all the other issues in the city,” said Burns’ husband, Prasenjit Mukherjee, who is a legal permanent resident and can’t vote. “The public safety, the businesses coming back and all of that is kind of downstream of the city having the money to spend to fix all these issues. So that’s probably issue number one going into the special election.”

Various factors have contributed to Oakland’s current financial picture. Among them, the lingering effects of the pandemic, an overreliance on one-time COVID-19-era funds, a drop in real estate transfer tax revenue from slower property sales, high pension and retiree medical costs, and under-budgeting of overtime pay to the police and fire departments, according to the city’s finance department (PDF) and SPUR.

City officials have already made a series of cuts, including browning out two fire stations, eliminating police academies, cutting contracts with nonprofits, restricting police overtime and laying off dozens of employees.

Those cuts have already made a $42 million dent in the current deficit, according to the city.

However, more cost-saving measures are on the horizon.

“You got a lot of people feeling uneasy because their jobs are at stake, a lot of services are being cut,” said Troy Dotson, a city employee who works on capital improvement projects in the city’s libraries and attended the workshop to hear how city officials are handling the deficit.

“It affects people in the community, as well as myself, working in this city,” Dotson said.

The city is also banking on voters approving a sales tax measure that will be on the ballot.

Measure A would increase the city’s sales tax by 0.5%, bringing it in line with nearby cities like Alameda, Hayward, Albany and San Leandro. If it passes, it would generate an estimated $21 million in city revenue in the first year and $30 million in (PDF) subsequent years, according to the city.

Interim Mayor Kevin Jenkins has said the city is building the budget on the assumption that the measure passes. A spokesperson for the city administrator’s office said the city is building two drafts of the budget — one that assumes the measure passes and another that assumes it does not pass.

A recent survey by the city’s Budget Advisory Commission (PDF) found 44% of residents polled opposed the tax increase.

“City Council needs to make sure that taxes are collected and that departments that function to collect revenue and taxes are actually doing that before asking residents for more money,” said one unnamed resident who responded to the survey.

“I would like to see council members EFFECTIVELY manage a budget from a city that has significant wealth,” said another. “There is no reason Oakland should be bankrupt while no improvements to quality of life are being made. Where is the money going?”

Oakland isn’t the only city facing a budget deficit. San José and San Francisco are also projecting budget shortfalls over the next two years.

However, questions around whether mismanagement has played a role in Oakland have loomed in recent months.

Oakland paid over $1.6 million in excess overtime to employees in the Department of Transportation and Public Works Department over a six-year period, according to a city auditor report released on Feb. 20 (PDF). The investigation found the city’s payroll division used an unauthorized formula to calculate overtime that resulted in higher payments than what federal law requires.

Auditor Michael Houston said he had no reason to believe the formula wasn’t used to pay employees in other departments and has called for a city-wide review. In a March 10 email to KQED, Houston said his office hadn’t heard anything from the city administration about the investigation.

Last year, Oakland’s finance department reported (PDF) that thousands of businesses had not paid taxes since 2021, potentially costing the city as much as $34 million in lost revenue.

Both Lee and Taylor have said they would conduct an audit of the city’s finances.

“This may be a turning point, where people are fed up and say enough is enough. We are just not getting the return on our money,” Matthai said. “I don’t know about mismanagement. I don’t know. I’m trying to understand more as to where this is, but it just feels like this could be a turning point, and we are really in trouble.”

Due to the timing of the election and the budget process, it’s unclear exactly how much direct input the new mayor will have on the new budget.

Voting in the mayoral election ends April 15, but the registrar has thirty days to certify the results. Meanwhile, the mayor has until May 1 to present a budget to the city council, which has until June 30 to make alternative proposals and approve the final budget.

The new mayor may be able to have an impact on the process in other ways.

“This is a charter that’s all about influence, not about power,” said former Oakland City Councilmember Lynette Gibson McElhaney. “So you’re going to want to make sure you have good relationships with council members.

“I would think that the top two contenders for this seat will be leveraging their existing relationships to influence this process,” McElhaney said. “I think that they’ll be weighing in on those reports and speaking to council members and trying to earn the support of the council.”

“I would think that they and their staff are going to be attending the public budget meetings, the budget hearings, that they would be asking critical questions, that they are forming allies on this council,” she said.

So far, all Oakland City Council members have endorsed Lee for mayor, with the exception of Councilmember Noel Gallo, who has said he does not plan to endorse a candidate.

With election day just weeks away, the window that candidates have to make their case to voters is quickly closing.

Good said she’ll be looking to hear from candidates what specific plans they have to solve the budget deficit.

“Is it all sunshine and roses?” Good said. “Or is somebody really going to go at it and say — we have a real problem here and here’s what I think we should do?”