(The Center Square) – The City of Oakland is cutting $63 million in spending to keep the lights on, $45 million of which is coming from the public safety budget, in a city where violent crime rose 237%, and property crime rose 70% between 2022 and 2023.
“For those $63 million cuts, $45 million of those cuts are police and fire. We heard today that those are the most impacted departments,” said Oakland City Council Member Treva Reid to ABC 7.
Even though spending was 5.7% lower than allocated for, the city estimates it has a $79.84 million budget shortfall for the 2023-2024 fiscal year against its $863.8 million adopted adjusted budget, resulting in the need for cuts. Almost half of the shortfall is from the real estate transfer tax yielding half of the expected revenue. The Oakland Police Department, which spent $358.57 million, was 7.9% over budget due to overtime costs, while the city attorney’s office, which includes prosecutors, spent $20.56 million, or 12% under budget.
“The City’s fiscal health is at significant risk,” wrote city staff in their financial report. “Expenditure reductions and reallocation of resources are necessary to mitigate the deficit and ensure fiscal stability throughout the remainder of FY 2024-25.”
The city blamed interest rates, inflation, and “perceived increased theft” for declining tax revenues.
“Persistent high inflation has reduced purchasing power, potentially decreasing tax revenue as consumers buy less or opt for cheaper alternatives. High interest rates are directly impacting Real Estate Transfer Taxes by cooling the housing market, reducing property sales, and thus lowering tax revenue from property transactions,” wrote the city. “Perceived increased theft and vandalism further reduced local tax bases by deterring business investment and consumer spending in affected areas.”
As California Governor Newsom celebrated a 33% decline in reported crime in Oakland earlier this year, a NBC Bay Area investigation found 97% of Oakland car-break ins were reported but not included in the department’s crime statistics, suggesting crime may be “down” due to data discrepancies, not real decreases.
California Department of Justice data for Oakland says for 2023, compared to the year prior, reported violent crime is up 237%, robberies up 40%, aggravated assaults up 336%, property crime up 70%, burglary up 44%, motor vehicle theft up 214%, and larceny is up 31%.
