Listening to the critics of Mayor Jean Quan, one might think that Oakland is on the brink of financial disaster. In fact, the opposite is true. Last week, amid the panic over the Warriors’ announcement, Quan and City Administrator Deanna Santana unveiled a balanced general fund budget that includes no cuts or layoffs for the first time in four years. In fact, Quan’s 2012-13 budget has enough money to finance a much-needed police academy.
So what’s going on? It turns out that city tax revenues are coming in at a higher clip than anticipated. In addition, previous layoffs and cuts, along with the pivotal concessions that Quan’s administration negotiated with the city’s public-employee unions last year, have eliminated the structural deficit in Oakland’s general fund.
Quan’s administration also appears to have effectively dealt with the elimination of redevelopment by Governor Jerry Brown — at least in terms of the city’s general fund. In fact, the city has plenty of money in reserve should the state decide to nullify some of the redevelopment deals that Oakland made last year.
The one dark spot on the horizon, however, is the city’s old pension plan for cops and firefighters. The old plan, which only applies to some current retirees, has long been a financial burden for the city. And finding a sustainable way to fund it will be one of the biggest challenges that Quan, Santana, and the city council will face in the next year.