Oakland Mayor Sheng Thao is proposing to tackle the city’s historically large budget deficit without laying off any city employees by implementing a hiring freeze, reorganizing some city departments and leveraging some new revenue sources.
The city is facing a roughly $360 million general fund shortfall over the next two years, largely created by the end of federal COVID-19 pandemic relief funding, lackluster real estate sales tax income and sagging hotel occupancy taxes, according to Thao’s budget document that was published Friday.
To address this, she is proposing, among other things, to use the estimated $105 million from the city’s sale of its ownership stake in the Coliseum, roughly $20 million in new business tax revenue — as authorized by last year’s Measure T business tax increase — and by leaving roughly 300 unfilled city jobs vacant, which will save about $133 million over the next two years.
“The financial challenges we face are significant but not insurmountable,” Thao said in a news release Thursday before her budget went live Friday.
Merging departments to create savings
Some of her proposed savings — up to $2 million a year — would come from the reorganization and merger of several city departments, including merging homelessness services with the Housing and Community Development Department and creating a new Department of Children, Youth and Families to manage programs currently offered by several different departments.
“With strategic adjustments and prioritization, we can ensure the continued delivery of essential services, support our most vulnerable communities, and lay the groundwork for a stronger economic future for Oakland,” she said.
The budget proposal includes the continuation of the Operation Ceasefire program, increased funding for Crime Reduction Teams, fully staffed 911 dispatch services, six police academies, $213 million for parks and libraries, $73.9 million for road repairs and $6.1 million for traffic safety improvements.
“With strategic adjustments and prioritization, we can ensure the continued delivery of essential services, support our most vulnerable communities, and lay the groundwork for a stronger economic future for Oakland.”
Mayor Sheng Thao
The overall two-year budget clocks in at roughly $4.2 billion and includes the general fund, which is about 40 percent of the total budget and is largely supported by tax revenue. It also includes all restricted funds, which are earmarked for specific programs and services and can’t be changed in the budget process, and the city’s capital improvement funds, which are reserved for things like land, building and equipment purchases.
Thao’s budget proposal is technically a mid-cycle adjustment to the current 2023-25 city budget.
It now goes to the City Council, which has until June 30 to approve a balanced budget.
The complete budget proposal can be found on the city’s website.
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