Amid Financial Strain, Oakland Contemplates Budget Cuts
In the face of a daunting $177 million deficit, Oakland’s city officials are considering significant budget cuts that could lead to layoffs among public employees. Union representatives gathered outside City Hall, advocating for the collection of unpaid taxes from local businesses as an alternative to the proposed cuts.
With the city’s business-tax tax revenue expected to fall $9.5 million short of projections, union leaders are highlighting the issue of uncollected license taxes, which have accumulated to $34 million over the past three fiscal years. A symbolic oversized check was displayed at a news conference to emphasize the lost revenue.
While city officials question the accuracy of the $34 million figure, they acknowledge the difficulty in collecting these funds, especially from businesses that may have closed during the pandemic. The city faces challenges in tracking active businesses and distinguishing between those evading taxes and those with genuine payment issues.
Oakland’s financial team’s overestimation of future tax revenue has been identified as a contributing factor to the shortfall. This issue is reminiscent of last year’s $360 million deficit, which Mayor Sheng Thao managed to address. Despite a new tax that increased the burden on businesses, with higher rates for larger firms, there has been a decrease in compliance.
As the city grapples with potential layoffs, officials have hinted at protecting public safety jobs. However, unions fear that some positions may remain vacant due to a hiring freeze. SEIU Local 1021 President Antoinette Blue expressed concerns over the impact of budget cuts on staffing levels and wait times for Oakland’s 911 system.
Zac Unger, president of the Oakland firefighters union, reassured that firefighter layoffs were unlikely but raised concerns about the possible closure of fire stations, which would increase emergency response times—a risk he deemed too great for Oakland residents.
The city’s financial woes reflect a broader trend as California projects a $27.6 billion deficit. Governor Gavin Newsom has committed to balancing the state’s budget without increasing taxes. Meanwhile, Oakland’s leaders must navigate these turbulent financial waters as they work to maintain essential services and address their budgetary challenges.
