The Oakland City Council deadlocked over future funding for children and youths Tuesday night, neither agreeing to repeal Measure OO nor finding the votes for a compromise that preserves more moderate funding increases for youth programs but saves the city from steep escalations in funding that it cannot afford.

Measure OO, also referred to as Kids First 2, dramatically increases the amount of city funds set aside for youth programs.

The council, working to close a more than $50 million budget shortfall for next fiscal year, is split over whether it should ask voters in a special election to repeal Measure OO altogether or amend it. All of them believe doing nothing could decimate the city's budget in years to come.

Oakland already reserves 2.5 percent of the city's unrestricted general fund every year for the Oakland Fund for Children and Youth under Measure K, passed by voters in 1996.

But when Measure OO kicks in July 1, the city is required to set aside 1.5 percent of total revenue for fiscal years 2009-10 and 2010-11, an increase of about $5 million for each year. The fund will grow to 2.5 percent in fiscal year 2011-12, an estimated increase of $15 million.

Councilmember Patricia Kernighan (Grand Lake-Chinatown), proposed a compromise that would amend Measure OO by reserving 3.5 percent of the unrestricted general fund each year, an increase of about $4 million over current funding levels. It was supported by the Kids First Coalition and nearly 100 speakers at Tuesday's meeting.

Kernighan got support from Councilmembers Nancy Nadel (Downtown-West Oakland), Jean Quan (Montclair-Laurel) and Rebecca Kaplan (at-large), but it wasn't enough.

"We will be making cuts in probably everything (to close the budget gap)," Kernighan said, adding that the compromise can win support at the polls, but a repeal effort could backfire. "The kids cannot come in last. "... It's wrong to pit one program against another."

Similarly, a substitute motion proposed by Councilmember Ignacio De La Fuente (Glenview-Fruitvale) that amended Kernighan's motion by setting the percentage of funding at 2.5 percent of the unrestricted general fund — basically the same funding amount under Measure K — received four votes. Joining De La Fuente were Councilmembers Larry Reid (Elmhurst-East Oakland) and Desley Brooks (Eastmont-Seminary), and council President Jane Brunner (North Oakland).

According to the City Charter, it's up to Mayor Ron Dellums to break the tie, or not, said Barbara Parker, chief assistant city attorney. The substitute motion will appear on the March 31 council agenda. If Dellums does not show up, the council will be able to reconsider Kernighan's motion, Parker said.

De La Fuente said he realized it would unpopular and an uphill challenge to repeal Measure OO.

"We all support after-school programs, but the money has to come from somewhere," he said. "I cannot support a compromise that will cause me to make cuts in other programs (like libraries and senior centers)."

The council set a special election date of July 21 in anticipation of adding a Kids First measure of some kind to the ballot. The ballot will include an ordinance seeking a 3 percent surcharge to the hotel tax and a language change to property tax calculations for corporations. The ballot also could include other measures, such as a tax increase to raise revenues for parks and recreation.

Reach Cecily Burt at 510-208-6441 or cburt@bayareanewsgroup.com.