Budgeting by magic? Or by luck?

While I was pouring through Oakland Mayor Jean Quan’s three proposed budget scenarios this weekend, I kept thinking back to a discussion at last week’s Finance Committee meeting.

The Committee got an update from staff on the City’s budget situation for this year. In addition to next year’s $58 million or whatever the number is today for the expected deficit, it had been looking like we were also running short on money for this fiscal year which runs through June.

At the meeting, staff explained that they had identified a solution to the year-end deficit. It turns out that the City has spent less on medical costs than we had projected, and therefore had some extra money in the medical account lying around. It turns out that the extra money in that account ($9 million) is very close to the shortage the City was facing ($8 million). So instead of making more cuts to close out the year, the City is simply no longer having departments pay into that fund. And it all evens out and everything is dandy through the end of June.

After listening to the description of this solution, District 2 Councilmember Pat Kernighan observed that it was like “magic,” but then quickly corrected that term to the less desperate sounding “lucky.”

District 5 Councilmember Ignacio De La Fuente was not amused by the characterization, and went on a little rant about how terrible it is that the Council is always doing tricks with the budget that we know won’t work out in order to put off the day of reckoning.

District 6 Councilmember Desley Brooks was not about to let that go by without comment, and went on a rant of her own about the City’s budgeting process

It’s worth watching the whole thing, but here are some of the highlights:

I think our budget strategy is luck. You know, we pray for, we hope for that we’re going to find the money like we did this time, and purely by luck instead of a thoughtful process.

We find nine million dollars, but that’s like putting your finger in a gaping hole and trying to plug the leak.

We have serious structural deficits. We have a systemic problem with our budgeting process. And we will never get to where we need to be if we continue to manipulate the reports.

We know that this is a shell game. And we’ve got to stop.

Then, later:

Luck should not be a strategy for budgeting in a municipality, and that’s what we’re doing right now. The importance of understanding the information before us is that we can’t look for just cuts. We can’t look for just cuts. If we don’t change our budgeting process, we are going to bankrupt this city. Because we are at a point where we no longer have anything to sell, we have limited bonding capacity, as so there’s no place else to get it from. And so unless we change structurally how we do business, then we’re forever going to be looking for these one time cuts. We’ve done them all.

She’s right, of course. But I have been watching most of the Council say pretty much the same things over and over again for years. Yet somehow, the budgets always end up being balanced through trickery or one time solutions. Even the Mayor, who has talked about how she’s ending the reliance on one-time solutions every time I’ve heard her speak about the budget, “balanced” her proposed budgets on phantom property sales.

So when will it end? Who knows. Either when we go bankrupt or the Council finally acknowledges that we simply do not have enough money (and will not at any point in the forseeable future) to provide all the services and grants we want to provide and has the stomach to make the necessary long-term cuts.

You can watch video of the whole discussion below.

4 thoughts on “Budgeting by magic? Or by luck?

  1. livegreen

    Thanks for this snap-shot V. It’s refreshing to c the Councilmembers are aware, yet not that they’re remaining complacent even so. IDLF & Brooks track Up based on these discussions, PK tracks Neutral.

  2. livegreen

    Maybe it’s time for the Compromises they fashion to be more structural and budget based? (Rather than compromise for the sake of?).

    BTW, how much say do Councilmembers have in Staff/Union contract negotiations? Active involvement, or only after proposals are put forth by Staff & Mayor?

  3. Dax

    $2,858… to grow veggies.

    Thank God they’re keeping a lid on veggies.

    Let folks start growing those all over the place and the next thing you know dialysis centers will be driven out of business as the rate of diabetes falls in Oakland.

    No, we’ve got to keep those “jobs”… good paying “jobs” in the medical field.
    You know, it costs $70,000 per year to keep one patient on dialysis.

    Your $2,858 fee would only support a patient for 2 weeks of care.
    Perhaps the fee should be increased.