As we saw last week, Oakland’s budget problems are ongoing. The City is currently anticipating an $18.87 million deficit in the General Purpose Fund by the end of the year (plus a $25.4 million shortfall next year) due to a combination of revenue shortfalls and overspending.
The City Council will hold a special meeting at 4 PM on Tuesday (PDF), before the regular Council meeting at 6 to figure out what to do about it.
So staff’s budget balancing recommendations are out (PDF), and the…um…good news, I guess, depending on how you look at it, is no more service cuts.
Instead, the City would use one-time revenues to deal with this year’s shortfall and figure out what to do about the future later. At this point, if we were to deal with the reductions by cutting more, it would mean basically cutting the amount of money from the General Fund going to departments other than police and fire basically in half. This being an election year, nobody of course wants to do that. As the report (PDF) says:
Additional reductions to departmental appropriations would mean drastic cuts in City services. Although fiscal prudence absolutely dictates that the City fundamentally address these recurring GPF shortfalls, doing so now within such a short timeframe would be very disruptive to the services Oakland residents and taxpayers expect from their City government. Eventually, program reductions may need to be considered by the City Council.
Okay, so we’ll just leave the giant WTF over that “may” aside for now and just look at what’s being proposed.
The City can come up with $6.62 million in one-time money by pillaging some funds that happen to have available balances, including money from an insurance settlement after the earthquake ($3.2 million), the telecommunications land use fund ($0.5 million) that can be used for park maintenance, the Parks and Recreation self-sustaining fund ($0.5 million), and Measure Q ($1.5 million), which can be used to maintain library services while reducing the Library’s General Fund appropriation to $9.06 million, the minimum permitted by Measure Q.
So that still leaves us with what, $12.5 million to come up with? Staff proposes raising another $11.6 million by selling off City property, like the Kaiser Convention Center and the Scotlan Convention Center. If, of course, they can find anyone to buy them.
The remaining deficit would be closed by forcing towing companies to start collecting our existing 18.5% parking tax on towed cars and leasing as yet unspecified City property to cell phone companies for them to put cell phone towers on.
As far as options for next year goes, we could issue bonds against the revenue from our parking garages (we’d get $15 million now and have to pay $3.2 million back for the next 20 years). Or we could give someone a 50 year lease on all the City-owned garages. They’d get to collect all the garage revenue for the lease period, and we’d get an upfront payment that we could use to prevent immediate cuts.
Then, of course, there’s taxes. The report includes a number of options for taxes that could be placed on the June ballot (not sure where the money we’re supposed to save by doing instant runoff voting comes into these calculations), including a 0.5% increase in the Utility Users Tax ($2.56 million a year), a 0.25% Sales Tax hike ($5.6 million a year), and a new $91/year public safety parcel tax $12.8 million a year).
And that’s it for now. The Council will take up the proposal on Tuesday at 4. Catch the action at City Hall, or from the comfort of your own home on KTOP.