Tuesday, October 26, 2010

Re: Oakland's Budget Woes: an extra $627 per taxpayer?


The article is OK as far as it goes.
That is a good description of his reporting over the last year that I have been watching it.
Reporting on our budget is never very good.

So quickly, there is more than one bomb in the budget future and some of my friends have asked me specifically "are you sure you want that job?"
The answer to that is "of course I do, if not, who is going to clean it up?"

As to how we get ourselves solvent that is not so easy. So on to some of the points:
Yes we are going to end up paying more taxes one way or another.
Yes the pension issue is the big time bomb, but there are many smaller ones.
For example, our infrastructure spending on sewers and sidewalks is way behind.
No, nothing is locked in stone, but we may have to declare a fiscal emergency and go to the state to ask for the temporary lifting of some rules.

What do we do about it?
  • My proposal is a budget summit or convention to bring it into a single plan.
  • A new budget and new budget process will require a 2/3 vote of the public.
  • Things like our current Measure Y would become part of how we do things without the specific, unworkable provisions or the political promises to unrelated parties, such as the fire department.

What I propose to have in that budget is a series of starting positions to kick off the discussion.
I would like to see:
  • A new pension system that is pay as we go and GOES OUT OF OUR HANDS EVERY PAYDAY.
  • A negotiated buy out of the old pension plans that gives the member what funds we do have set aside for them.
  • (Probably a last contribution from the city and a graduated cash-securities payment to the employees depending on how soon they will retire, giving those who will retire soonest the most cash and younger workers the most stocks and such.)
  • PFERS (which Lindheim says is cast in stone) is going to have to be changed. Considering that this same problem affects much of the state, we will probably end up participating in a state wide solution to at least part of our pension and retiree health care cash flow problem. I think we will be looking at something akin to the divestment of the big three automakers.

    For more on this, see the city auditor's recent report:

  • I want a required vote of the people before disposing of publicly owned real estate.
  • I would like to limit special measures and mostly use the public measure process for major changes.
  • Minor changes should be avoided. We need a STABLE tax, zoning, permitting and regulatory environment for investment.
  • We need some kind of graduated, or sliding scale taxes to replace the parcel tax system. We also need split roles for commercial and residential property taxes. It may take the form of a high base rate that then offers discounts based on when the property taxes were last assessed and what the property is being used for (in other word off set from Prop 13)
  • We may have to issue our own credits in the form of a local currency such as they have in Berkshire http://www.berkshares.org/
  • We need the new budget process to have a good times / bad times provision. I would like to pay debts and save when GDP is high, including a spending cap in good economic times, and be allowed to spend reserves and borrow in bad economic times. I think our bigger public works and infrastructure projects should be done in spurts during times of high unemployment (and costs are lowest)
There are a lot more ideas to put forward in a new budget, but that is the general idea. There will also need to be a transition from the mess we are in to a sustainable budget. One idea I would like to look at is a pause in the spending of redevelopment funds. We spend more in the redevelopment committee each year than the whole general fund. That is over a half billion dollars. We could ask Sacramento for an emergency suspension of the redevelopment spending. We could join our request with other cities facing the same problems. The state needs funds badly and so does the city. We could suspend the use of those funds for earmarked projects and split them between the state, city and school board without any strings attached for a couple of years until economic growth picks back up.

I am not in favor of two tier payment or benefit packages. They are very bad for morale. How would you like to have a job where you know you will always be paid worse than those before you no matter how well you do and no matter how poorly they do? We need to offer city employees good jobs, with good wages and benefits where we expect them to settle into a career of public service. We need it to be stable, reliable and we need to get the city out of debt with its employees every payday. Everyone working for the city should get a fair deal and an equal chance to advance.

We need to cut police overtime costs NOW. This can not wait.
We need to cap salaries. I would like to put the mayor's salary down to 100K (from about 160 I think) and make that the most any city employee can make. STOP.
And we need to stop the cuts and layoffs. They are bad for job creation in the private sector.
A little more creativity in the days off and such would be a big help.

Outside of city hall we need more employment whether or not the city gets paid a lot of sales tax from those businesses.
The EXISTING small and medium sized private, non profit and government agencies all need to be cultivated to thrive in Oakland.
Big growth is fine, but not at the expense of small growth over the larger economy. Even a couple percent growth of the small business employment would make a lasting impact on our local economy.

Lastly there is the problem of sales tax "leakage". We need to get people to shop locally as much as we can and explain to people how badly our city is hurt by the tax structure. We also have to advocate that this out of date sales tax equalization structure be changed. We do not ride horses to shop any more and do not need to allocate sales tax revenue by where purchases are made. We should allocate those revenues based on the number of residents measured in the census.

One could go on at length about these issues and unfortunately for my friends, I have a habit of doing so. If we want to keep our city out of bankruptcy, we need to do a lot of things quickly. I did not get a lot of details about the proposals I put forward in the debates from our other candidates. Perata says he will cut CEDA to keep cops. He may need permission from Sacramento to do that and it still sounds very piecemeal to me. Tuman talks about early retirement for the police and I am not sure we have authority to do what he is saying. They all talk about the pension, but I have not heard any proposals, such as my sliding scale cash out, that they want to make public. Quan and Kaplan are both keen to say that the police should have taken the payment of 9% of their pension costs, but that leaves a lot of other aspects of the pension plan a problem. Greg Harland honestly said that we need to be less generous at the top, which I agree with, and we should consider bankruptcy, which I do not trust.

As to the budget measures, I really disagree with the process. This is why I want a budget convention to scrap the system.

That said I will vote for L and BB because the schools and crime prevention programs can not wait or be trashed.
I see this as stop gap on our road to some real budget reform.

At first I was going to vote for the parcel tax for the same reason, but since then the damage of laying off 80 newest police officers has been done and with reassignments, overtime and other big time mistakes, there is no longer any hardship to avoid or reverse quickly.
We now need to rebuild community policing.
So I have changed my mind and will vote against the parcel tax, even as a stop gap measure.

I expect all the tax measures to be defeated, so if elected the declaration of a fiscal emergency will probably be on inauguration day.

Don Macleay
510 290-1200

On 10/25/2010 1:48 PM, Emily Montan wrote:
Why don't you send me a reply to this and I'll forward it to my church's list? Thanks

--- On Sun, 10/24/10, ronwei wrote:

From: ronwei
Subject: [uuoakland] Oakland's Budget Woes: an extra $627 per taxpayer?
To: uuoakland@yahoogroups.com
Date: Sunday, October 24, 2010, 6:19 PM

Hi all,

I happened upon this article about Oakland's budget deficit and am startled at the potential for higher taxs; and, wondering how the various mayorial candidates are addressing this. The article is from the SF Chron May 5 this year and can be viewed:


A few quotes give the flavor:

"Ballooning pension costs will push the city's projected deficit to $58.7 million by July 2011.

The biggest portion of that budget shortfall is a debt payment of $43.9 million due July 1, 2011, to the old Police and Fire Retirement System. The payment would be more than 10 percent of the roughly $400 million city budget.

The costs of benefits to retirees appears to be the single biggest issue facing Oakland. Not only are the costs growing, but the city has not been funding them adequately, some council members said.

Last year, Oakland was supposed to pay $85.7 million for retiree medical care, according to a city staff report. But the city only paid $12.5 million, the report said."

TAXES on the Ballot: According to "ballotpedia":

A City of Oakland parcel tax, Measure X ballot proposition is on the November 2, 2010 ballot for voters in the City of Oakland in Alameda County.

If approved by a 2/3rds supermajority vote, the tax will be $360/parcel per year and will last for four years. Money from the tax would go to police and fire salaries. Landlords would be allowed to pass half of the tax bill on to renters.

The vote on the Oakland City Council to put the tax on the ballot was 5-3. Voting in favor were Nancy Nadel, Jane Brunner, Jean Quan, Pat Kernighan and Larry Reid. Voting against were Councilmembers Kaplan, Brooks, and De La Fuente.

According to Chip Johnson, a columnist at the San Francisco Chronicle, "...if voters approve every tax measure sought by the city and the Oakland Unified School District this November, the average Oakland resident would have to pay an extra $627 a year. That would nearly double the local tax bill to about $1,400 a year." Other tax measures on the Oakland ballot are Measure BB, Measure L, Measure V and Measure W.

Ron W

Recent Activity:
This is the UUOakland listserv, an email list for Unitarian Universalists in Oakland. This listserv is semi-moderated and is NOT officially connected to the First Unitarian Church of Oakland, nor is the church responsible for the content or management of this list. The views and opinions expressed do not necessarily reflect any official position of the church. Listserv users are expected to treat each other with respect at all times. Thank you.


No comments:

Post a Comment