Oakland voters should not let themselves be fooled again by city leaders’ insatiable appetite for new taxes.
The city already imposes more taxes than most cities in the Bay Area and California. Oakland property owners pay 15 supplemental city taxes. Ballots in every election year since 2014 have contained new levies.
Now, in the upcoming April 15 special election, the City Council is asking voters to increase the sales tax for 10 years by 0.5%. The resulting 10.75% tax — 10.75 cents for every dollar of purchases — would match the top rate in the state. Of California’s 483 cities, only six others have a total tax that high.
Voters should reject Measure A. Backers say the money would protect services such as police, fire protection, street maintenance, parks and libraries. But residents already pay special taxes for all those services.
Oakland voters should stop enabling their city leaders’ addiction to new taxes. It’s time for elected officials to plan for bringing spending in line with revenues, rather than trying to boost revenues to match uncontrolled spending.
There’s no doubt that Oakland faces a serious budget shortage. City Administrator Jestin Johnson and Finance Director Erin Roseman forecast a $140 million annual structural deficit starting next fiscal year for the city’s general fund. That’s an ongoing revenue shortfall of roughly 15% of projected expenditures. Other restricted funds also face structural imbalances, Johnson and Roseman warned in a Feb. 20 memo.
Measure A, raising about $30 million annually, would only be a small part of any solution. Before residents are asked to pay yet another tax, they should be shown how it would contribute to a viable plan to balance the city budget.
False ballot arguments
Backers of the measure — including leading mayoral candidates Barbara Lee and Loren Taylor — falsely claim in ballot arguments that Measure A is part of a “comprehensive financial plan” for righting the city’s budget.
Actually, there is no such plan. There’s not even a public accounting for Johnson and Roseman’s calculation of the $140 million structural deficit. We know because we asked repeatedly for more than two weeks and were finally told through a spokesperson that it wasn’t available. The lack of transparency is appalling.
Backers argue that Measure A sales tax expenditures — which could be used for any purpose — would pay for more police officers, keep fire stations open, fix streets and provide clean parks and safe libraries.
Safe libraries? Property owners already pay two separate taxes, approved by voters in 2004 and 2018 and totaling $225 annually, just for libraries.
Parks? A 2020 voter-approved measure levies a $182 annual property tax primarily for parks.
Street repairs? Under ballot measures approved in 2016 and 2022, property owners pay about $27 for every $100,000 of assessed value of their homes to cover the cost of bonds for street repairs. That tax rate will keep rising as the city issues more bonds.
More police officers? Less than four months ago, voters approved Measure NN, which increased the city’s public safety tax for police and fire services to $198 for a single-family home.
A lure of Measure NN was a promise to increase the minimum number of sworn officers in the city’s badly understaffed Police Department from 678 to 700. But before the ballots were even cast, City Council members had declared a fiscal emergency, enabling them to lower the target to 600 officers.
Despite the new revenues approved by voters, the council is effectively slowly defunding the police by not replacing officers who retire or leave for other reasons. As of March 7, there were 681 filled officer positions, according to the city, with the number declining with each departure.
All told, in addition to the base property tax of 1% of assessed value, and supplemental taxes levied by schools and regional park and transportation districts, Oakland property owners also pay about $2,000 annually for the 15 supplemental taxes for city services.
Then, when it comes time to sell a house, the buyer and seller split the city transfer tax, which works out to $16,100 on a $1 million sale — almost all of which goes to the city.
Piling on
Now city leaders want to pile on with a sales tax. The city currently does not have its own sales tax levy. The tax in the city is currently 10.25%. That’s comprised of a statewide rate of 7.25% — of which the state keeps 6%, 0.25% goes to county transportation funds, and 1% usually goes to cities — and Alameda County’s addition of 3%, the highest for any California county.
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Measure A would add another 0.5% for Oakland, bringing the total to 10.75% — and making the city even more expensive to live in. In California, sales tax applies to purchases of tangible personal property. Prescription medicines and most groceries are exempt. Nevertheless, sales tax is regressive, disproportionately impacting those who can least afford it.
The 10.75% rate would add $107.50 to the price of a $1,000 television set, or $4,300 to a $40,000 car. The six other California cities with such a high sales tax — Alameda, Albany, Hayward, Newark, San Leandro and Union City — are all in Alameda County.
Perhaps it would be justified in Oakland if the city didn’t already levy special property taxes for many of the same services that the sales tax is supposed to cover. And perhaps the record-high sales tax would be justified if it were part of a binding plan to resolve the city’s fiscal crisis.
But, right now, Measure A is just another tax grab. Voters should reject it.