OAKLAND — With the city's already dire financial situation facing even more massive challenges in the coming year, voters may have weigh in on two new city taxes in June, depending on how the City Council votes at an emergency meeting scheduled for Monday night.
The city is facing a $46 million budget deficit in the fiscal year that starts in July, and Mayor Jean Quan is hoping to get help closing that gap from Oakland's land owners and phone users. She's proposed raising $11 million for the city's general fund with a five-year, $80 parcel tax that would need approval from two-thirds of the city's voters.
She's also proposing a $1.99 phone tax that would require a simple majority, but which voters rejected in 2008.
The rest of the budget gap will be covered by service cuts and other reductions, Quan said. The city's overall general fund revenue has dropped steeply, from $491 million in 2006 to $400 million in 2011, records show.
Gov. Jerry Brown has been pushing the state legislature to set a special election in June, asking that state voters extend for five years some taxes that would otherwise expire. If he's successful, Quan is hoping to attach these taxes to that special ballot.
For that to be possible, the Council will have to unanimously declare that the city is in an emergency, and even Council members Libby Schaaf (Montclair) and Ignacio De La Fuente (Fruitvale), who reportedly expressed concerns about Quan's proposed tax last week, agreed to schedule the Council's special meeting.
The city has already taken several steps toward fixing the budget situation, including the July layoff of 80 police officers, scheduling citywide furlough days and demanding proposals from every city department for how they would handle a 15 percent overall budget cut.
Quan vowed last week to campaign actively for both taxes. She said Thursday a privately-funded poll of 400 Oaklanders produced encouraging results, though she did not release the details of the poll
here's a feed from Libby:
Schaaf (Montclair-Laurel) said she doesn't believe the voter support is there for additional taxes, and while she is planning to hear the Mayor out at Monday's meeting, she's inclined to vote against them.
"I don't think it's wise for us to make an unbudgeted expenditure of that size in a year like this," Schaaf said. She added that the county registrar estimated Oakland's cost to hold the election -- even sharing costs by piggybacking on the governor's election -- would be between $600,00 and $800,000.
Schaaf said she also doesn't like Quan's idea of tweaking the real estate transfer tax, which Schaaf said is "already one of the highest real estate transfer taxes there is."
"So many local taxes are tied to real estate values, and I think it might backfire," Schaaf said. "It could be a disincentive to purchase property, which would drive down real estate values and lose us revenue."
The meeting will be the council members' second emergency meeting in a week. They voted Thursday to commit several million dollars to redevelopment projects and property buys, fearing the legislature was moving quickly to eliminate redevelopment agencies statewide.
They also agreed to look at another looming potential catastrophe: a deeply underfunded police and fire fighters pension fund, responsible for the pensions of more than 1,000 retired city workers and underfunded by $45.6 million — a debt that could double the city's already desperate budget deficit. The city borrowed $417 million 15 years ago in exchange for a holiday from making regular payments to the fund, an agreement that expires in July.
The Council then faces a decision with long-ranging impact in how to handle the pension fund going forward, essentially weighing how much to begin paying off and how much, if anything, to borrow again.
That decision is not on the table Monday, but the council may ask to have June voters issue a cap on how much the pension's benefits may increase each year. Currently, increases are tied to how much active officers and firefighters earn, and the council could ask voters to cut off the pension increases at 2 percent each year.
Monday's meeting will be open to the public and is scheduled to begin at 5 p.m. in the Council chambers at City Hall, 1 Frank Ogawa Plaza.
Contact Sean Maher at 510-208-6430.