The City of Oakland, California, which its Mayor claims is “one of America’s most diverse and progressive cities,” is in serious financial trouble. In its newly released 2019-2021 budget, Oakland will be using $2.9 million in state gas tax funding to keep the streetlights on.
“At a time when Oakland is trying to cure its pothole epidemic, the city is planning to use $2.9 million in state gas tax money to keep its streetlights on, then use what it saves of its own money to stave off cuts in parks and recreation,” the San Francisco Chronicle reported. “It’s a bit of financial loop-de-loop, but money is money.”
The City of Oakland has a $2.4 billion obligation to unfunded pension and retiree health benefits, and must fund $20 million to pensions in 2018-19 budgets… “an increasingly common challenge for large, Democrat-run cities that made ambitious promises to public sector unions,” Joel Pollak with Breitbart notes.
The total Oakland budget is $1.63 billion.
Gas Tax For Road Repairs
Californians voted down the Road Repair and Accountability Act of 2017, Proposition 6, last November 6, essentially approving and assuring future gas tax increases. A YES vote would have repealed the gas tax imposed by the California Legislature in 2017. A NO vote approved more gas tax increases, including another increase of 5 cents a gallon July 1.
Sanctuary City Oakland Mayor Libby Schaff is notorious for obstructing justice when she notified Oakland’s illegal immigrants of an impending Immigration and Customs Enforcement raid that ultimately led to the mass detention of at least 232 of the agency’s 1,100 intended targets, KTVU reported in 2018. Schaff found herself in a fight with President Donald Trump who urged then-U.S. Attorney General Jeff Sessions to investigate the Mayor for her obstruction of justice.
Schaff’s budget allocates $150,000 annually to pay for legal representation for illegal aliens facing deportation.
Schaff’s official bio says, “Mayor Libby Schaaf was inaugurated into office in January 2015 and launched an agenda to elevate one of America’s most diverse and progressive cities into an equitable and resilient city.”
She is now facing a $49 million shortfall, with a $25 million deficit in the General Fund alone, according to Oakland’s 2019-2021 budget. Her budget isn’t even as large as the unfunded pension obligation.
Schaff released her 2019-2021 budget last week. In the $1.63 billion budget, she reports:
Personnel related expenses, particularly the cost of medical benefits and pensions – as well as insurance, utilities, and fuel costs – are growing at 2-3 times the rate of inflation and revenue growth. We must also contend with the fact that very few of our resources are discretionary – around 10% of what we take in – which requires us to make strategic investments that stretch funds to preserve existing services and augment those services only when the financial capacity can be identified.
Results from the public budget priorities poll revealed that homelessness and housing are overwhelmingly the top two issues residents want to see prioritized: 63% of respondents mentioned one of these two categories. The poll also showed that residents want the City to invest more in street and sidewalk repairs. And the majority indicated they prefer paying more for services than making cuts, especially for homelessness and road repair.
Despite the poll results showing that residents want the City to spend more to fix streets and sidewalks, Oakland is using state gas tax funding to fund pension obligations. The city has budgeted other funds for some street repair.
Other Financial Woes
The 2018 Oakland Comprehensive Annual Financial Report notes, “the five-year financial forecast highlighted a growing gap between projected expenditures and estimated revenues… the gap has risen despite recent economic growth and could become more severe in the event of a recession or unanticipated revenue shortfall.”
The CAFR further noted: “We cannot ignore the fact that rising costs for retiree benefits are continuing to reduce funding for other General Fund priorities.”
Nearly all California cities are in the same public employee pension obligation boat, which makes new taxes and bonds likely going to unfunded pension debt rather than what was claimed… just as with the state gas tax, now being used for anything but roads in Oakland.