On Tuesday, the Oakland City Council will once again meet to discuss reductions to the FY09-10 (this year) and FY10-11 (next year) City budget. If it seems to you like there are an awful lot of these meetings, well, that’s because there are.
The City of Oakland has been in pretty much continuous budget cutting mode since Spring of 2008. If that seems kind of ridiculous to you, it’s because it is.
Two year budgets
In Oakland, we theoretically adopt a budget every two years. This two year budget cycle should be a good thing for the City. It provides some measure of stability in service delivery and allows the Council to focus on other pressing issues in between budget discussions.
The adoption of a two year budget is, of course, no guarantee that nothing will get changed in the non-budget year. After all, nobody can predict exactly what revenues are going to look like a year in advance. If revenues turn out to be lower than anticipated, or expenditures turn out to be higher, then the budget will get re-opened after a year so the Council can make mid-cycle adjustments. That’s normal. If the adopted two-year budget was done properly, using realistic revenue and expenditure assumptions, then the mid-cycle adjustments should not be too dramatic.
Two week budgets
Of course, this whole two-year and mid-cycle budget process only works if you adopt, you know, realistic budgets. If you adopt a budget that happens to be “balanced” with imaginary money that you are crossing your fingers will somehow fall out of the sky, or if you, say, adopt a budget that, in addition to being predicated on fake money, is still not even balanced in the second year, then you’re going to have to go back and make changes a lot more often than that.
It also only works if you are willing to commit to, you know, balancing your budget when you find out just how little money you do have to work with. The Council received a set of dire revenue projections last fall that revealed multi-million dollar shortfalls in this fiscal year’s budget, and despite multiple meetings about how to deal with it over the course of five months, they have still not managed to adopt a budget that closes this year’s General Fund shortfall. Still! It’s outrageous.
District 4 Councilmember, Finance Committee Chair, and Mayoral hopeful Jean Quan got into this bizarre habit last fall of talking about how Oakland should start looking doing at five year budgets. Nothing against five year budgets or anything, but I’m sorry – what a freaking joke. How can you expect to do a five year budget if you can’t handle a two year budget? Hell, the Council for the past two years hasn’t even been able to manage a one year, or even six month budget.
The Council was, in fact, so obstinate in their refusal to adopt a realistic budget plan during the last cycle that by Spring of 2009, they were essentially operating with a two-week budget. To keep the checks from bouncing until the new fiscal year could begin, they ended up basically just shifting a bunch of costs into the next year’s budget, but only after toying with and rejecting a number of ham-handed budget hacks, like a last-minute proposal to close the City every Friday for the final six weeks of the year.
What’s on the table this time?
Councilmembers Jane Brunner and Ignacio De La Fuente have proposed that all elected offices be forced to take a 15% budget cut (PDF). At a meeting earlier this year, one of the budget balancing measures that had been proposed (PDF) was cutting 5.0 FTE from the City Attorney’s office. At the meeting, a number of speakers complained that it was unfair that the City Attorney’s office should be cut so much while the City Council was taking no cuts. So they decided to not do the City Attorney cuts at that meeting, and instead come back with this idea of cutting 15% from the budget of all the elected offices. Here’s what the savings from that would look like:
- Mayor’s Office: FY09-10: $45,120, FY10-11: $270,733
- City Council: FY09-10: $81,300, FY10-11: $487,774
- City Attorney: FY09-10: $91,080, FY10-11: $546,486
- City Auditor: FY09-10: $33,470, FY10-11: $200,826
Under the proposal (PDF), the City Council would eliminate 6.0 FTE, cutting the position of Legislative Analyst. The Mayor, City Attorney, and City Auditor would be tasked with figuring out on their own what to cut in order to realize those savings targets.
Is cutting 15% from everyone fair?
The City Administrator has responded to the proposal with a rather strongly worded memo (PDF) advising the Council that their plan is not quite so fair as they appear to think it is:
Across the board reductions for all elected offices would be disproportionate and inequitable, given that each office has taken varying levels of GPF budget reductions since July 2008. In particular, some offices have already eliminated staff while others have not. FY 2009-10 and FY2010-11 reduction targets should account for prior GPF budget and FTE reductions taken since FY2008-09.
The memo points out that the way the budgets for the elected offices have been treated during the past two years of budget slicing varies wildly:
Similarly, since July 2008 in budget terms, and netting out transfers to other officers or funds:
- the Mayor’s Office budget has been reduced by $.8 million or 30.7%
- the City Attorney’s Office budget has been reduced by $1.8 million or 34.7%
- the City Council office budget has been reduced by $.29 million or 7.7%
- the City Auditor budget has increased by $.08 million or 5.6%
The memo continues:
To now make a 15% reduction for all elected officers neglects the reality that both the Mayor’s Office and the City Attorney’s have already made major staffing cuts and the Council has made only minimal budget reductions.
For the Council make 15% cuts now would still leave them far below the cuts (less than half) already made by the City Attorney’s office and by the Mayor’s office.
As such, there are two equitable approaches: (i) have the 15% cuts proposed for all elected offices be limited to just the City Council and by some lesser amount for the City Auditor; or (ii) have the Council cuts match the level of cuts already made by the City Attorney and Mayor, which would necessitate doubling the 15% Council cuts to 30% and then make much lesser cuts to other elected offices
The Administrator’s point about how the proposal does not actually demonstrate equity in budget cuts among elected offices is well taken. However, it fails to address the larger problem with the proposal, which is that forcing everyone to take equal cuts is a stupid way to close a deficit. Taking the same amount of money from everywhere assumes that every function of the City has equal importance, which it doesn’t, and that our existing budget prioritizes resources in the best way possible, which it also probably doesn’t.
Can we expect it to get better anytime soon?
Do I really have to say any more than that? I suppose I should. Okay, here we go.
I don’t know if it’s that people have short memories or that more people are watching the budget meetings these days, but in the days following each of the last two discussions, I had a number of people talk to me glowingly about the Council’s acceptance that it’s time to “get serious” about the budget. Some people praise the general attitude in the room, and other praise speeches from one Councilmember or another.
They always seem shocked when I just roll my eyes in response. They ask questions like “Why aren’t you excited that the Council is really dealing with the budget finally? You’ve been complaining about how they won’t for months!” Which is true. But for those who have followed the Council’s efforts to deal with the budget crisis for the last two years, this is a nauseatingly familiar song. It’s easy to talk about how it’s time to “get real” or “get serious” or “make tough choices.” Evidence of just how easy this is can be found by reviewing the video of basically every budget meeting in 2009.
Clearly, following through on those promises is a lot harder. One can’t help but wonder how serious the Council is collectively about balancing the budget when only one member even bothers to press staff at these meetings for follow-up and progress/feasibility reports about previously suggested revenue generating measures. (I’ll give you one guess which.)
So tune into to KTOP tomorrow to see the budget action, or, you know, don’t. There will be plenty more budget meetings over the next few months, and probably again over the next year, and nothing ever happens at them anyway. I mean, at some point, I suppose, something is going to have to happen. But who knows when that will be. Given the Council’s track record, I would not advise holding one’s breath.