The City of Oakland already has trouble providing decent services to
its residents, and things are about to get a whole lot worse. City
officials are facing an $83 million budget deficit that they must
resolve by July 1. And it’s now apparent that they’ll have to lay off
hundreds of workers and shut down government offices more often. While
some of the blame for the mess should be shouldered by politicians who
don’t have the courage to make tough decisions, Oakland’s budget woes
also are being hampered by one of the worst city laws in recent memory
— Measure Y.
At a budget briefing with reporters last week, City Councilwoman
Jean Quan, head of the council’s Finance and Management
Committee; Assistant City Manager Marianna Marysheva-Martinez,
the city’s budget czar; and Budget Director Cheryl Taylor laid
out the grim realities of Oakland’s fiscal nightmare.
Marysheva-Martinez and Taylor are projecting that general fund revenues
will drop by about $51 million next year, down from about $465 million
in the current fiscal year. They blame much of the projected decline on
lower tax receipts and the disappearance of onetime revenues from this
year’s budget. They also estimate that the city’s expenses will
increase by about $32 million next year because of rising salaries and
spiraling health-care and pension costs.
City officials are quietly hoping to convince employees outside the
police and fire departments to take a 10 percent salary cut. If the
unions refuse, then city officials plan to shut down city government
more often, thereby saving the equivalent on employee salaries. To
balance this year’s budget mess, city government already closes its
doors thirteen times a year, in addition to formal citywide holidays.
In short, Oakland’s already below-par services are about to nosedive
further, and the people who will suffer the most are low-income
residents.
Clearly, city officials have leverage over some of the unions. If
they want, they can threaten mass layoffs or government shutdowns to
get the unions to play ball. But they have virtually no leverage
against the police and fire unions — two of the city’s biggest
and costliest. The reason has to do with Measure Y. That 2004 ballot
measure effectively prohibits the city from laying off cops and
firefighters, explained Marysheva-Martinez, whom Mayor Ron
Dellums hired earlier this year at the recommendation of former
City Manager Robert Bobb.
The problem is that Measure Y established minimums for the numbers
of police officers and firefighting companies that must be on the
city’s payroll. If the city fails to keep at least 739 cops and 32 fire
companies, then it cannot collect an estimated $20 million in annual Measure Y
parcel tax revenue from property owners. Although the city currently
has more than 800 police officers, 63 of them are funded by Measure Y
revenues. So if the city were to lay off any of those officers, the
general fund would not benefit. In other words, the city simply can’t
afford to lay off cops. Doing so will either produce no savings or
result in the loss of Measure Y funds (for more, see “Measure Y Is a
Bad Law,” 2/18/09).
So what does it all mean? Oakland cops and firefighters have almost
no incentive to take pay cuts because their jobs are safe. You can’t
threaten to lay them off when they know you can’t anyway. The city
can’t threaten to stop responding to crime and fires either. In short,
its hands are tied. The only place the city has leverage with cops and
firefighters is on overtime, but Marysheva-Martinez explained that both
departments have cut back in their overtime usage, and additional large
cuts have public safety ramifications.
Admittedly, threatening to lay off cops and firefighters right now
would be extremely unpopular. There’s no doubt that they have tough
jobs, especially the police. But without the leverage provided by the
threat of layoffs, then the city has to depend on the unions to
voluntarily cut their pay. That seems highly unlikely. In fact, the
police union is scheduled to receive a 4 percent pay raise next year.
Oakland residents, by contrast, appear destined to pay higher taxes and
receive fewer and fewer services in return.
Another problem is that Oakland’s elected leaders have failed to use
the bully pulpit to inform the public about what’s happening and why.
They also appear to be more worried about angering city unions than
about coming to grips with one of the few viable solutions —
significant employee pay cuts. Marysheva-Martinez and Taylor made it
clear that a 10-percent salary cut for non-police and fire will fail to
solve the fiscal mess. In fact, the projected deficit requires that the
city slash spending up to 17 percent across the board to balance the
$414 million general fund budget for 2009-10 fiscal year.
Yet after the meeting, Quan defended the 10-percent salary-cut
proposal for nearly everyone other than cops and firefighters, saying
that the unions will never agree to what’s needed to avoid further
shutdowns of city government and hundreds of layoffs. “They’ll take
layoffs before they’ll take a 20 percent cut,” she said flatly. Quan is
expected to mount a run for mayor in 2010, and some of her likely
support will come from labor unions, but she denied that her political
aspirations are playing a role in her attempts to balance the
budget.
Although Quan declined to divulge what’s being said in the union
negotiations, it seems doubtful that city officials have actually
threatened massive layoffs if the unions won’t take larger pay cuts.
But if they have, and the unions really would rather decimate city
services and watch hundreds of people lose their jobs, then the public
has a right to know.
Also, it’s not as if city workers can’t afford it. According to
Marysheva-Martinez, Oakland city employees make higher-than-average
salaries compared to city workers statewide. As a longtime former union
rep, Full Disclosure takes no joy in arguing for union wage cuts. But
it makes no sense for a predominantly working-class city such as
Oakland to pay its employees above-average salaries while gutting city
services.
Correction: The original version of this story used out-of-date figures to describe how much Measure Y produces in annual revenues for the city. According to Mayor Ron Dellums’ 2009-11 budget, Measure Y is expected to generate about $20 million in annual tax revenues for each of the next two years — not about $12.5 million, as this story originally stated.
