Budget Deep Dive: Unpacking Oakland’s $360 Million Shortfall

After three years of economic growth and historic federal pandemic relief, local budgets in the Bay Area are looking a little different this year. Much of that federal aid has been spent, and cities are grappling with the economic fallout from the rise in remote work and empty storefronts. Elected officials often say that budgets are “statements of values.” So KQED is checking the receipts of the spending plans recently passed in San Francisco, San Jose and Oakland to see how leaders in the region’s three largest cities are prioritizing taxpayer dollars.

For her first budget season, Mayor Sheng Thao faced Oakland’s largest-ever deficit.

While Thao and the Oakland City Council pulled together enough funding to plug a $360 million shortfall, it didn’t come without sacrifices. Much like its neighbor, San Francisco, Oakland’s precarious funding position comes from a one-two punch: a loss of pandemic-related federal assistance which previously bailed out the city to the tune of $188 million, and the new reality of shrinking tax revenue post-pandemic.

San Francisco relied on one-time sources of revenue to plug large portions of its funding gaps. Oakland, however, made significant structural changes to its spending to address the shortfall.

The $4.2 billion two-year budget approved by the Oakland City Council enshrines some of Thao’s budget-saving maneuvers, like freezing positions across Oakland government to shore up the funding deficit, including more than 100 vacancies in the Oakland Police Department, and consolidating some city departments. That includes rolling homelessness services into the Department of Housing & Community Development and merging two agencies to create a new one, the Department of Children, Youth and Families.

But the Oakland City Council rolled back major cuts Thao proposed to non-police violence prevention services, though not to the level of previous years. This came after dozens of protesters rallied outside City Hall against those reductions.

After the acrimony over the loss of funding to the Department of Violence Prevention, the Oakland City Council ultimately added back about $2.85 million to that department and some related efforts, including $600,000 into addressing sex trafficking.

That department has more than 60 grant agreements with community-based organizations, including ones that offer restorative justice programs. Those services help more than 11,500 Oaklanders annually, according to the mayor’s office.

The Oakland City Council also committed more than $5 million in FEMA grants for each fiscal year to prevent fire department service cuts, which would’ve seen some fire engine companies alternate when they’re active, essentially spreading them thin to cover a wider geographic area.

While Thao’s budget already contained $216 million for affordable housing, the council authorized an additional $8.8 million for funding to quickly purchase homes, when available, for the homeless.

What about the police?

Well, it’s complicated.

Technically, the Oakland Police Department saw an increase in its overall budget, with raises for officers on the way.

Oakland’s 2021–2022 budget, for instance, spent $330 million on police, rising to $353 million in 2022–2023, $358 million in 2023–2024, and $364 million in the 2024–2025 budget.

But despite the budget increase, costs are rising in the police department, including salaries. To make up for that, the department will reduce the number of police academies, which according to Thao’s proposed budget could “result in OPD falling below the number of officers needed to address the public safety needs in Oakland.”

Oakland’s sworn police staff will shrink by 16 sworn positions to 710 in the latest budget. With various academies graduating officers, however, that number will fluctuate through June 2025. Police overtime was also cut by 15%.

In an alternative to police, the Oakland City Council also budgeted just over $240,000 for human resources positions to help bring new hires to the city’s Mobile Assistance Community Responders of Oakland, known commonly as MACRO. That community response team is centered around non-violent response to non-emergency 911 calls.

Not everything in Oakland’s budget is as high stakes as violence prevention and policing. The financial plan includes some bright spots for community programs, including a beloved amusement park. The Oakland City Council opted to fund $86,400 for Children’s Fairyland, which has been operating in Lake Merritt for more than 70 years.

And after a community ambassador program found success in Oakland’s Chinatown, offering graffiti abatement, helping lost bystanders and offering violence prevention, the program will be expanded in other Oakland business corridors with $2 million in funding through 2025.

Other investments in Oakland life include $200,000 for programming in Frank Ogawa Plaza, $400,000 for a facade improvement program, and overtime funding for Triangle Incident Response in East Oakland, which offers crisis intervention expertise for shootings with serious injuries, homicides or gender-based violence.