Oakland public services could face deep cuts amid city budget crisis

OAKLAND, Calif. (KGO) -- The Oakland City Council will hold a special meeting Wednesday afternoon to tackle the budget deficit.

"If we don't balance this budget, we will go bankrupt," explains Oakland City Councilmember Noel Gallo.

The city is facing a historic deficit, which Oakland Mayor Sheng Thao estimates to be close to $200 million for this year and next year. With less than a week to left to pass a budget, Gallo says one of the biggest challenges is the accuracy of the data.

"It is the actual numbers that I have available. The numbers keep changing from one meeting to another. And at the same time, how much money will the city be able to generate tax-wise," asks Gallo.

Almost 80% of Oakland's revenue comes from taxes - property tax a huge portion of that. The city says property tax has grown steadily around 8.5% for the past few years.

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However, a May 2024 agenda report noted: "With the current macro-environment, the federal reserve's efforts to fight inflation with raising interest is shifting the growth pattern to stable and is teetering into declining."

Gallo says cuts are inevitable.

"But the reality is, if I make reductions, where do I reduce the budget? What positions do I eliminate or reduce? And certainly, my neighbors say, they want public safety to increase," says Gallo.

Brooke Levin is with the Oakland Parks and Recreation Foundation. She spoke at city's finance meeting on Tuesday. She says Measure Q was passed to fund parks and tackle homelessness with $500 million over 20 years. She is concerned that this budget shifts a lot of new expenses from the general fund into Measure Q.

"We have a letter to the council with a list of questions, dated June 5. And we have not gotten answers yet to those questions. So, we don't know which category they put these new expenses into," says Levin.

MORE: Oakland mayor aims to use Coliseum sale, hiring freeze to balance budget

"I will remain focused on supporting city council as they vote on a balanced budget this week. We will complete the transaction for the sale of the Oakland Coliseum property to the African American Sports (and) Entertainment Group," Mayor Thao said on Monday, in her first public appearance since last week's FBI raid on her house, part of an investigation into possible campaign finance irregularities.

Critics argue a big part of balancing this current budget hinges on the sale.

Ray Bobbitt, a co-founder of the African American Sports and Entertainment Group, says despite the turmoil Thao is experiencing, they remain committed.

"We are from Oakland, so used to navigating difficulties and changes. But ultimately, at the end of the day we love our city, we love our community. And we are really excited about this project," explains Bobbitt.

As of Tuesday, that sale isn't done yet, and the city administrator's office says it is presenting councilmembers with a variety of budget options.

Some of those options, include scenarios without the stadium money and would plan for potentially deep spending cuts.

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"The reality is, if I make reductions, where do I reduce the budget? What positions do I eliminate and reduce? And certainly my neighbors they want public safety to increase," said Gallo.

Those concerns are top of mind for many of the city's public services too.

"We're already at a tipping point where we're so busy we're almost unable to do our jobs," said Zac Unger.

Unger is the president of Local 55 - a union representing Oakland firefighters.

He says if budget cuts were to come through, it would be catastrophic not just for the fire department, but also for Oakland residents.

"I talked to a firefighter today who is working twelve 24-hour shifts in a row. Consecutive, twelve 24-hour shifts because we are so short-staffed," said Unger. "And if we can't hire and we keep losing firefighters by attrition, that's going to become the norm."