What’s Causing the Deficit? – Cut Waste Not Services

what’s causing

oakland’s deficit?

The City of Oakland is facing a historic budget
deficit of $129 million. How did we get here?

The City of Oakland
is facing a historic
budget deficit of
$129 million.
How did we get here?

oakland’s plummeting revenues

Uncollected business tax delinquencies skyrocketed
from $4.7 million in 2019-2020 to $16 million in
2022-2023. These are funds owed to the city that
are being left on the table due to mismanagement
and failure to prioritize city revenue collection.

Uncollected business tax delinquencies skyrocketed from $4.7 million in 2019-2020 to $16 million in 2022-2023. These are funds owed to the city that are being left on the table due to mismanagement and failure to prioritize city revenue collection.

In 2023-2024, there was a 32% drop in parking
enforcement revenues. While as residents we hate
to see excessive parking tickets, this is further proof
of the city’s failure to prioritize revenue capture.

In 2023-2024, there was a 32% drop in parking enforcement revenues. While as residents we hate to see excessive parking tickets, this is further proof of the city’s failure to prioritize revenue capture.

Oakland has failed to identify new revenue streams,
such as bringing our sales tax in line with neighboring
cities, applying for workforce development grants and
emphasizing economic development.

Oakland has failed to identify new revenue streams, such as bringing our sales tax in line with neighboring cities, applying for workforce development grants and emphasizing economic
development.

Our Roadmap to a Sustainable Budget outlines recommendations totaling
$142-$204 million in potential new revenue and cost efficiencies, which is more
than enough to close the city’s budget gap. Immediate action will not only
protect our vital public services here and now, it will put Oakland on the path
toward fiscal sustainability and economic growth.

Our Roadmap to a Sustainable Budget outlines recommendations totaling $142-$204 million in potential new revenue and cost efficiencies, which is more than enough to close the city’s budget gap. Immediate action will not only protect our vital public services here and now, it will put Oakland on the path toward fiscal sustainability and economic growth.

lack of budget
oversight and fiscal
responsibility

In the face of Oakland’s budget deficit, many leaders
have started calling for cuts to city staff positions and pay,
but the data shows that cutting into the workforce that
makes Oakland run so won’t make a dent in the deficit.

In the face of Oakland’s budget deficit, many leaders have started calling for cuts to city staff positions and pay, but the data shows that cutting into the workforce that makes Oakland
run so won’t make a dent in the deficit.

In 2022, 66 city employees in management positions received over $8 million in wage and
benefit increases, an average increase of $116k per person. Keep in mind, the projected
deficit is $129 million.

Regular city staff account for only 2% of total employees earning at this level, while the
vast majority of employees earning over $200k are police officers and high-paid executive
managers. We need to cut from the top, not from the heart of services for seniors,
children and families.

In 2022, 66 city employees in management positions received over $8 million in wage and benefit increases, an average increase of $116k per person. Keep in mind, the projected deficit is $129 million.

Regular city staff account for only 2% of total employees earning at this level, while the vast majority of employees earning over $200k are police officers and high-paid executive managers. We need to cut from the top, not from the heart of services for seniors, children and families.

Oakland misspent over $133 million in transfer
tax revenues that should have been put into reserves
to protect against deficits.

Oakland misspent over $133 million in transfer tax revenues that should have been put into reserves to protect against deficits.

Over the last decade, Oakland’s reserves surged as property values rose and the Bay Area
economy boomed, with Real Estate Transfer Taxes jumping from $31 million after the
Great Recession to $138 million in 2021-2022, becoming a primary revenue source for
the city.

Due to the unpredictable nature of transfer taxes, the city’s policy is to use only a portion
of them for ongoing expenses, dedicating the rest to reserves or debt repayment. But the
city has rarely followed this policy – misusing over $133 million in transfer tax revenues to
cover short-term budget gaps over the last decade. If the city had followed standard
policies, the reserves could have been $66 million higher – enough to close the operating
deficit.

Over the last decade, Oakland’s reserves surged as property values rose and the Bay Area economy boomed, with Real Estate Transfer Taxes jumping from $31 million after the Great Recession to $138 million in 2021-2022, becoming a primary revenue source for the city.

Due to the unpredictable nature of transfer taxes, the city’s policy is to use only a portion of them for ongoing expenses, dedicating the rest to reserves or debt repayment. But the city has rarely followed this policy – misusing over $133 million in transfer tax revenues to cover short-term budget gaps over the last decade. If the city had followed standard policies, the reserves could have been $66 million higher – enough to close the operating deficit.

The city’s budget is increasingly inflated and
unrealistic for many services.

The city’s budget is increasingly inflated and unrealistic for many services.

In 2022-2023 alone, non-personnel spending surged by 50% and over 288 staff positions
were added—many of which remain unfilled, leaving funds on the table. Right-sizing the
city’s budget to reflect actual spending levels would save millions.

In 2022-2023 alone, non-personnel spending surged by 50% and over 288 staff positions were added—many of which remain unfilled, leaving funds on the table. Right-sizing the city’s budget to reflect actual spending levels would save millions.

opd’s unsustainable
overspending

Oakland Police Department’s overtime spending
has doubled in the last decade, spending $52 million
over the approved budget in 2024 alone.

Oakland Police Department’s overtime spending has doubled in the last decade, spending $52 million over the approved budget in 2024 alone.

oakland police department’s overtime
spending has doubled in the last decade.

In the past decade the department has only stayed within budget twice. OPD data shows
that one officer even made $1,000,000 in overtime pay in just five years and that the
department lacks sufficient oversight over overtime pay, as 83% of sworn overtime
approval records could not be located or verified. This reckless spending is jeopardizing
essential services like fire, senior centers, and police academies.

In the past decade the department has only stayed within budget twice. OPD data shows that one officer even made $1,000,000 in overtime pay in just five years and that the department lacks sufficient oversight over overtime pay, as 83% of sworn overtime approval records could not be located or verified. This reckless spending is jeopardizing
essential services like fire, senior centers, and police academies.

In 2024-2025, police overspending alone accounted for 56% of the total budget deficit. One way we can eliminate this excessive overtime is through transferring administrative tasks and paperwork to civilian staff — so police officers can focus on fighting crime.

In 2024-2025, police overspending alone accounted
for 56% of the total budget deficit. One way we can eliminate
this excessive overtime is through transferring administrative
tasks and paperwork to civilian staff — so police officers
can focus on fighting crime.

police overspending alone accounted
for 56% of the deficit last year.

police overspending alone accounted for 56% of the deficit last year.

With public safety spending consuming 70% of the city
budget, cuts to non-sworn services won’t fix the deficit.

With public safety spending consuming 70% of the city budget, cuts to non-sworn services won’t fix the deficit.

According to city reports, balancing the budget without managing spending in safety
services would require slashing all other budgets by 83%, including revenue collection,
parks, recreation centers, senior centers, human services and violence prevention programs.

According to city reports, balancing the budget without managing spending in safety services would require slashing all other budgets by 83%, including revenue collection, parks, recreation centers, senior centers, human services and violence prevention programs.

And while other departments continue to underspend by tens of millions, the police
department is the only department that consistently overspends on overtime —
spending an average of $14 million more than budgeted each year.

And while other departments continue to underspend by tens of millions, the police department is the only department that consistently overspends on overtime — spending an average of $14 million more than budgeted each year.

read our roadmap to
a sustainable budget.

read our roadmap to a sustainable budget.