How the American Rescue Plan Can Help Rescue Oakland
The COVID-19 pandemic has decimated our national and local economies. In Oakland, the events of 2020 completely wiped out several years of steady economic growth, ending our lowest unemployment rate ever and threatening our highest credit rating in years.
Unlike the State of California or our wealthier neighbor San Francisco, the City of Oakland expects to end this year with a $44 million deficit — and that’s despite all the heart-breaking service cuts we had to make.
Roughly half of the City of Oakland’s $1.7 billion budget comes from tax revenues. The COVID lockdowns ordered by our health officials dramatically reduced the taxes we had expected from retail activity (sales tax), hotel stays (TOT), and parking. And, unlike the federal government who can run up huge debts as if they had a giant credit card, cities like Oakland are required by law to live within our means and keep a balanced budget.
Unfortunately, our outlook grows worse: Looking ahead to Oakland’s upcoming 2021–23 budget, we project a staggering $274 million shortfall just to provide the baseline city services. When combined with the current year’s deficit, Oakland’s next budget would need to resolve a massive $318 million shortfall.
That is why the American Rescue Plan is also the Oakland Rescue Plan. The $1.9 trillion package recently signed by President Biden is the first to include direct aid to local governments specifically to address our revenue losses, while still sending more direct aid to our most vulnerable residents and beloved small businesses.
The City of Oakland will receive $192 million in American Rescue Plan funds to help address our massive revenue losses. It’s not the full $318 million we’d need to completely restore past service levels, but it’ll get us a heck of a lot closer.
Oaklanders feel the impacts of our recent service cuts every day: Walking officers no longer stroll commercial corridors as we agonize that their presence might have prevented the violent robbery of an elder. Dangerous sideshows roar through neighborhoods with little to no response. Our beautiful parks are marred by the slower collection of litter. The squalid and unsanitary conditions of encampments endanger the health of unsheltered and sheltered residents alike and have become wholly unconscionable.
Other cuts will not be felt until later — like the cumulative impact of our hiring freeze that leaves more and more critical positions vacant following employee retirements, or the suspension of payments that were finally starting to reduce our more than $2 billion unfunded retiree obligations that will come due in the not-so-distant future.
Here is the Oakland Rescue Plan — and how I’m urging the Oakland City Council to use the $192 million from the American Rescue Plan:
1. Restore the most critical police services to address the tragic increase in gun violence and robberies, support encampment cleanings and prevent dangerous sideshows. End furloughs and bring back up to 500 temporary workers so they can return to maintaining our parks and let us reopen our libraries and rec centers.
2. Restore mandatory reserves and prevent negative balances in special funds so Oakland doesn’t have to declare a Fiscal Emergency, which could compromise our ability to issue the bonds that build affordable housing, restore parks, and pave roads.
3. Reserve as much aid as possible to address the projected $274 million shortfall in the upcoming two-year budget, where we must resume paying down unfunded retiree obligations and rebuild our Rainy Day Fund.
4. Resist the temptation to spend this aid too early or create new projects until our baseline services are stabilized and Oakland’s economy has returned to strength.
The American Rescue Plan is a godsend. It can rescue Oakland from unconscionable service cuts now and in the future — but only if we use it wisely.
Please contact the Oakland City Council at council@oaklandca.gov and urge them to 1) restore police services, parks & library workers, and the City’s reserves as soon as possible, and 2) not risk Rescue funds on anything new until basic services are restored and Oakland’s economy has recovered. Tune into & speak at the next Special Council Meetings on March 16 & 29th.
