Can Oakland Balance Its Budget By Amending Voter Mandates?

In a recent San Francisco Chronicle article by Matthai Kuruvila, Mayor Quan was quoted as saying she “just didn’t have time” to put reforms on the ballot.” In several recent public appearances, Council Member De La Fuente has challenged community groups to bring ballot proposals to the City Council for possible inclusion in a future special election.  We believe one area that needs serious consideration for reform is in the area of voter mandates.

MOBN! believes that reform ballot measures could help Oakland balance its budget.   MOBN! looks at three areas of possible reform:  Measure Y (community policing, fire, violence prevention), Measure Q (libraries) and Measure D (Kid’s First!).  All three measures were originally approved by the voters. All three may serve relatively narrow purposes, and sound wonderful when presented without context.  But all three have played a major roll in hamstringing the city as it tries to address its economic woes.

To be clear, MOBN!  isn’t attacking community policing, fire services, violence prevention or libraries  MOBN! supports all of these.  We also understand the importance of kids’ programs, particularly in the parts of our community where privately funded activities for children are minimal or non-existent.

What we have a serious concern about are voter mandates that lock in funding for certain programs in preference to others. When these mandates pass, and the time comes to make tough budget decisions, one of two things happens: the City has to cut the funding for an activity below its “baseline” level, so all the tax revenue for that activity goes away—or all the cuts go to programs whose advocates weren’t savvy enough to seek protected status. Here are Oakland’s most glaring examples and some thoughts about how savings might be realized:

Measure Y:  Amount at Stake =  $3 million

Before last November’s election, Measure Y was a good example of  a voter mandate with baseline funding requirements that the City couldn’t meet. To collect the Measure Y taxes, Oakland was required to fund 740 police officers.  If the city did not “appropriate” the funding for 740 officers, the city could not collect the authorized taxes. But last November, voters passed Measure BB, the “Measure Y Fix 1.0,” which eliminated the baseline funding requirement for 740 officers.  Now Measure Y is an example of a partially unfunded mandate.

Measure Y provides for a parcel tax and a parking tax, which together yield about $20 million per year. The money goes to neighborhood Problem Solving Officers (and a few other officers), fire services, and violence prevention programs.  $4 million is dedicated to fire services, and due to Oakland’s contract with its fire fighters, this amount is locked in.

Measure Y also provides that the tax proceeds shall be used to hire 63 police officers, and that 40% of the proceeds allocated to police and violence prevention (about $16 million) must go toward programs. But police officers cost about $200,000 each. So the cost of the officers ($12.6 million) plus the required program funding ($6.4 million) exceeds the available funding by $3 million.

MOBN! believes we can do better.  A “Measure Y Fix 2.0,” providing that proceeds pay for the a specified number of officers with the balance going toward violence prevention programs, would make Measure Y cost-covering.  MOBN! isn’t targeting violence prevention programs.  But the police department has taken a devastating share of budget hits in the past year (80 police officers were laid off), while Measure Y programs have remained untouched  Crime suppression, community policing, and violence prevention programs are all critical pieces of Oakland’s public safety policy.  But they must also all be part of the budget discussion.

Measure Q:  Amount at State = $9 million

Oakland’s library funding comes primarily from two sources. About $9 million comes from the General Purpose Fund. About $10 million comes from the Measure Q parcel tax. Measure Q requires that in order to collect the parcel tax, the City must appropriate $9 million from the General Purpose Fund for libraries. So if the City concludes it can only appropriate, say,  $8.95 million (or some lesser amount), it loses the ability to collect and spend the parcel tax money. This is the same type of baseline funding requirement the voters changed when they amended Measure Y last November.

Mayor Quan’s current “Budget Scenario A,” the “all cuts budget,” reduces the baseline to less than  $4 million for 2011-12 and foregoes the Measure Q funding. The result is a $15 million reduction in library funding with a budget savings of only about $5 million.

A temporary reduction in, or elimination of, the baseline funding requirement would allow the City Council to consider measured reductions in library funding without causing the kind of devastating service cuts proposed by the all-cuts budget.

Measure D / Kids First!:  Amount at Stake = $11 million

Measure D requires that 3% of general purpose fund appropriations be spent on children’s programs. In the Mayor’s Scenarios “A,” “B” and “C” budgets, this is estimated as $10.9 million.  The question is not whether it is wise to spend this amount of money on children’s programs; ; the question is whether these appropriations should be exempt from the hard decisions that must be considered during budget discussions. MOBN! believes they should not be exempt. In times of economic difficulty, Oakland should be able to maximize its  ability to prioritize city programs.

Conclusion:

The amounts at stake in these three voter mandates total $23 million.  This is about 40% of the budget hole the City is trying to fill for 2011-12. It is almost twice what the Mayor estimates the City will save by furloughing city employees 15 days per year. It is twice the City’s proposed General Purpose Fund spending for Parks and Recreation. It is the cost of 115 police officers. It is the amount budgeted in 2010-11 for the libraries.

Oakland may not achieve savings of $23 million from the three proposed reforms.   The City may decide to fund some kids’ programs and provide General Purpose Fund dollars for libraries even if not required to do so.   But Measures Y, Q and D remove this funding from the budget discussion.  Should an amount this significant be part of the discussion?  We think it should.

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6 responses to “Can Oakland Balance Its Budget By Amending Voter Mandates?

  1. I have been an advocate for lots of funding sources restricted to a single public service, such as transit for which I used to lobby. I now believe that special funds are not desirable unless there is a clear relationship between the funding source and the object of expenditure such as port revenues for port purposes. The limitation should be flexible enough to allow expenditures for services reasonably collateral to the revenue source. In the port illustration for fire and law enforcement services related to the port but not for oversight costs like the City Administrator, Council , Mayor, etc. Drawing the related line is necessary and can be done. The rest of city revenues which come from all of us sales tax, property and parcel taxes, park fees, etc should be in the General Purpose Fund and used for whatever the Council/mayor believe appropriate. After all we did elect the Council/Mayor to make tough decisions. Ballot box budgeting is very undesirable and we should look at unwinding the current restricted funding mess that we are in.

  2. I disagree with the assertion that Measure Y and Measure Q are unfunded mandates or ballot-box budgeting. The citizens made a deal that they would provide additional funding for police, violence prevention, and libraries, under the condition that existing funding to those purposes would not be cut. Without the baseline funding guarantees, a parcel tax for libraries is essentially a parcel tax for anything – if we pay $14m for library services but then the $9m General Fund contribution for libraries is eliminated, then we are essentially paying a $9m tax that goes to everything except the library. It makes sense that the voters want to ensure they are supporting the library rather than other services with an additional parcel tax if it is pitched for libraries.

    Measure K on the other hand is basically indefensible in this budgetary environment, more so because the programs it funds are privately-run and not open to the public. And unlike Measure Y or Measure Q, Measure K can be amended with a simple majority vote.

  3. Mandates and set asides are bad public policy–they hamstring City Managers when time are tough. They have a role to play when there is lots of city funding, which I do not foresee for years to come.

  4. I agree with Jonathan Bair. It’s a hard lesson we’ve learned that even those we elect will double cross us on taxes. Mandates are a big bugetary managment problem. We shouldn’t need to shackle the funding like this, but too many public goals have gone unfunded because the situation is always a crisis in government. What we get is fear tactics from politicians. At the federal level it’s “agree to cap the debt limit or shut down Medicare.” Locally we threatened with no libraries or senior centers. To say that the public employees have “done enough” doesn’t even make sense. Public employees are workers, not martyrs. They, unfortunately, are budget line items that have to be cut during hard times; just like your job and mine.

    These measures, Y,Q and D, only passed because deals were made with public employee unions. That’s why the baselines are untenable.

    Maybe we should go back and start the budget design with the mandates and work outward from there. Libraries, youth programs and pre-school education are critical to changing the nature of Oakland’s society.

  5. Granger Jones

    The California Initiative process was enacted 100 years ago to give ordinary Californians a hand in government. For a while the process worked well. In situations where California’s elected politicians either couldn’t or wouldn’t act, citizens…..who in those days were usually also tax payers….could and sometimes did take matters into their own hands via the initiative process.

    In recent times, two intervening phenomenon, both unsurprisingly involving money, have seriously undermined the process….to the point where local politicians are now calling for legislation designed overrule the effects of voter initiatives.

    Things have come full circle.

    So why, after all these years, do officials in various California cities including San Francisco and Oakland want to cut the heart out of the California initiative process?

    It all has to do with money. In the first place, recent State and local propositions have often had more to do with providing tax breaks and other benefits to assorted special interests than with improving government. And in the second place there are millions of voters living in rent-controlled apartments who pay no taxes and therefore suffer no conseqences no matter how expensive a proposition. These voters know that despite the cost any resulting tax increases will be borne by others.

    If the country’s leaders don’t act to end the pervasive and debilitating effects of special interest money on government and the political influence of the growing mass of “entitlement” recipients, the ultimate result will be the economic and political collapse of this country.

    GJ

  6. Very good post! We will be linking to this great article on our website.

    Keep up the good writing.

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