MAKE OAKLAND BETTER NOW!

TASTY PASTRY #3
TIDY BITES OF OAKLAND POLITICS, ALWAYS THRILLING BUT NEVER TOO FILLING

La Farine French Bakery Edition

Introduction to the Oakland City Budget Elected officials & staff,
administration
Public safety

Oakland's structural deficit is so deep-rooted that it cannot Museum, Parks & rec,
library
be addressed by either rooting out “fraud and waste,” or Human Services

by trimming programs. Solving the deficit problem will Public Works

take comprehensive overall budget reform. If Oakland Community Econ.

fails to understand and tackle the budget holistically, the Develop.

Debt and Lease

City will lose any hope for a better future, better public Payments
Other non-departmental
safety, significant economic development or a higher Capital Improvement
quality of life here. In this Tasty Pastry and the one that
follows, we’ll provide an introduction to the City’s budget
and budget crisis. The allocation of spending and the percentage of the total
spent by each major function of the City is as follows:
The City of Oakland operates on a July 1 to June 30 fiscal Function Budgeted % of Total
year. It budgets two years at a time, and is now reaching
Elected officials &
the end of the first year of its 2009-11 budget cycle. staff, administration $89,053,690 8%

Public safety 327,336,550 30%

The City Charter requires that the mayor present a
proposed budget to the City Council each year. Council Museum, Parks
& rec, library $ 50,977,420 5%
can adopt it as is or adopt it with changes. Last time
around, leading up to the two-year period starting July 1, Human Services 56,587,750 5%
2009, Council adopted a budget with significant changes Public Works 110,263,430 10%
in order to address expected deficits. Community Econ.
Development 82,713,220 7%
Still, the budget for 2009-10 was never really balanced. Debt and Lease Pymt 251,181,470 23%
Projected city revenues had shrunk so severely, and
Other
expenses had continued to grow so much, that a number non-departmental 17,491,770 2%
of the initial balancing measures (a hoped-for Coliseum
Capitol Improvement 123,948,760 11%
ticket surcharge, unspecified Police Department expense
reductions) were based on wishful thinking rather than Total $1,109,554,060 100%
solid projections. As a result of the initial imbalance,
continued shrinkage of revenues and continued increases As much as half of this money comes from restricted
of expenses, the Council has been meeting and consider- funds. For example, bond proceeds and most grant
ing additional budget balancing measures continuously funding is limited to specific purposes, and a number of
for the past year. parcel taxes are limited specific purposes by voter
mandate.
As of this date, the total City budgeted spending is about
$1.1 billiotn dollars, allocated as follows:

Continued on page 2

Get news on Oakland's public safety & justice issues at http://oaklandlocal.com/topics/justice

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MAKE OAKLAND BETTER NOW!
TASTY PASTRY #3
TIDY BITES OF OAKLAND POLITICS, ALWAYS THRILLING BUT NEVER TOO FILLING

Merritt Restaurant & Bakery Edition

Continued from page 1 In a balanced budget, income is supposed to match or
exceed expenses. But in the City’s general purpose fund,
Although the City presently faces deficits in other areas as the two aren’t even close. Oakland’s – and most California
well (particularly redevelopment), much of the attention cities’ – typical revenue streams are sales tax, property tax
on the city’s budget-balancing problems is directed to the and real estate transfer taxes. And when the economy
largest fund in the city budget: the General Purpose Fund. tanks, these streams all shrink accordingly.
Although there are some restrictions on how this money is
spent as well, the General Purpose Fund is still the area In 2006-07, Oakland collected over $471 million in general
where the city has the most spending discretion. It’s also purpose fund revenues, and ended that fiscal year with a
the fund that’s used to pay for most public safety $56 million reserve. The real estate transfer tax alone for
functions. The GPF is budgeted for 2010-11 as follows: that year was $61.5 million.
Elected officials & staff,
administration
Fast forward to 2010-11, where projected general purpose
Public safety fund revenues are less than $400 million. Police, HR, the
Museum, Parks & rec,
mayor’s office and other departments are expected to
library overspend their budgets by some $8 million. All of this
Human Services
gets us to a deficit of between $42 and $48 million for this
Public Works fiscal year.
Community Econ.
Develop.
But 2010-11 is the relatively good news. After that, things
Debt and Lease
Payments look much worse. Using conservative assumptions, Make
Other non-departmental
Oakland Better Now! projects the following structural
Capital Improvement general fund deficits for the following fiscal years:
2011-12: $117 Million
Here are the numbers: 2012-13: $133 Million
2013-14: $155 Million
Function Budgeted % of Total
Bottom line: this equals a deficit of around $450 million –
Elected officials & more than the entire GPF budget. How can the City fix
staff, administration $52,814,110 12.43%
that? In our next Tasty Pastry, we’ll talk about some
Public safety 283,907,700 66.83% painful but real potential solutions. Meanwhile, after
Museum, Parks & rec,
you’ve choked on these figures, have a delicious croissant
library 30,600,790 7.20% from La Farine French Bakery.
Human Services 5,469,870 1.29%

Public Works 4,275,070 1.01%

Community
Econ. Develop. 2,508,360 0.59%

Debt and lease

payments 32,322,410 7.61%

Non-departmental 12,485,440 2.94%

Capitol
Improvement 420,490 0.10%

When you hear people in government say things like “65%
of city money goes to police and fire” this is what they are
talking about – it’s actually 65% of the general purpose
fund, not the entire budget.
So what’s the problem?
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More information: An outline of how the budget is
supposed to be developed and adopted is here. The City’s
adopted budget (very large pdf file) is here. Two of the
City Administrator’s more recent budget reports to the
City Council are here and here. Make Oakland Better
Now!’s analysis of the City’s structural deficit over the next
four years is here. And a number of budget posts from the
indispensable V Smoothe at A Better Oakland are here.