Oakland’s Government Watchdog, Tied Up in Budget Crisis, Weighs a Tax to Fund Itself

Oakland’s anti-corruption watchdog agency is considering a parcel tax to fund its investigations and its stalled public campaign financing program rather than fall victim to the woes of the city’s fiscal crisis.

The Public Ethics Commission, which investigates allegations against high-profile government officials such as former Mayor Sheng Thao, also oversees the Democracy Dollars program. Although voters overwhelmingly passed the program into law in 2022, it has yet to be implemented in any election due to Oakland’s ongoing budget deficit.

Democracy Dollars promised to refresh Oakland’s public financing program, inspired by a similar initiative in Seattle, Commission Chair Francis Upton IV said. It would distribute $100 vouchers to Oakland residents, who could then use the vouchers to donate to participating campaigns for public office, such as mayoral and City Council candidates.

“The idea is to increase the number and diversity of the donors,” Upton said. “One of the problems that Oakland has is a lot of the money for the elections comes from the rich people in the hills.”

The program costs around $2 million per year, but the ballot measure that created it requires funding to come from the city’s general fund — leaving it vulnerable to the city’s budget crisis.

“If the city declares a fiscal emergency, which it has, then they have the right to cut anything they want from the general fund,” Upton said. “Democracy Dollars was one of the programs they decided to cut.”

Ethics commissioners remained hopeful that they could secure the funding for Democracy Dollars in time for 2024, but that election came and went. Now, commissioners say 2026 is likely off the table as well.

In the case of 2024, Upton said the city made do by temporarily reimplementing its previous public campaign financing program, which for 20 years had reimbursed candidates for certain campaign expenses. The pot of money was small in 2024, though — just $155,000 for eligible candidates to split, Upton said.

Oakland’s 2025-2027 budget will be adopted in June, but Upton and Public Ethics Commission executive director Nicolas Heidorn said it is unlikely that city officials will be able to carve out the money to fund Democracy Dollars. In that case, the commission intends to go forward with the plan to put a parcel tax on the ballot for the 2026 primary election.

Heidorn, who will be the commission’s second top official to resign in the last year when he steps down in July, said the agency does not have the resources to carry out its work investigating corruption in Oakland. It has just one investigator and a chief tasked with over 170 open cases.

“Having a dedicated and stable funding source for the ethics commission is important to ensure that we can perform our role as an ethics watchdog agency,” Heidorn said. “And it’s also important for our independence. The commission’s budget should not be controlled by the same officials that the commission regulates from an ethics perspective.”

In a staff report to the commission, Heidorn outlined three different options for the parcel tax: one that funds just Democracy Dollars, a second that also funds the enforcement unit of the commission, and a third to fully fund Democracy Dollars and the commission.

The cost of those ranges from around $3.8 million to fund just Democracy Dollars, to around $7.2 million for the fully funded option. That translates to a parcel tax between $18.10 and $34.10 per parcel, according to the report.

The process to get a parcel tax on the ballot is not dissimilar from the ballot measure that created Democracy Dollars, Upton said.

“If the voters approved the parcel tax, which would include the Democracy Dollars, then it would certainly be implemented by 2028,” he said.