Presenters
The Honorable Barbara Lee, Mayor
Betsey Lake, Acting City Administrator
Brad Johnson, Finance Director
FY 2026 -27 Mayor’s
Proposed Midcycle
Budget
June 2026
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AGENDA OVERVIEW
• Framing Remarks By Mayor Lee on the
Mayor’s Proposed Midcycle Budget
• Fiscal Context, Oakland’s Four Deficits, and
Roadmap to Fiscal Health
• FY 2026 -27 Proposed Budget Overview and
Major Service Impacts
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A Fiscally Sound
Budget Proposal
Mayor Barbara Lee
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Oakland’s Fiscal Context
and Path Forward
Brad Johnson, Director of Finance
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FINANCIAL CHALLENGES
For years, Oakland has carried a structural deficit,
meaning that expenses have chronically grown much
faster than revenues, even in good times. This is
primarily driven by rising personnel costs like
medical
benefits and pension contributions mandated by the
State.
Structural Deficit
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While revenues continue to grow,
expenses are growing faster. This
is what’s known as a “structural
deficit.”
The City doesn’t have enough
money to pay for all of the things
that it needs without reducing
expenses or bringing in more
revenue.
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American Rescue
Plan Act Funds
Econom y was strong
and fiscal policies
were put in place
Operating deficits were the norm in Oakland prior to 2016.
Coming out of the recession, the City made significant strides in stabilizing its finances by developing strong fiscal controls and strengthened financial policies.
Source: SPUR analysis of “Excess (Deficiency) of Revenues Over (Under) Expenditures,” Oakland Annual Comprehensive Financial Reports .
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Since FY19-20, Oakland has overridden Consolidated Fiscal Policy (CFP) limits on use of one - time revenue or excess Real Estate Transfer Tax for ongoing expenses.
The City has used excess Real Estate Transfer Tax, CARES, and American Rescue Plan Act one - time funds to maintain services post -COVID.
Source: Budget Advisory Commission (BAC), Recommendations for FY 24 -25 Mid -Cycle Budget, June 9, 2024
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Fiscal Year Reductions/Balancing Measures
2008 -2009
Cut elected officials’ salaries, furloughed staff
and closed city hall 1 day a month, froze
overtime for non -sworn staff
2009 -2010
Raised the hourly parking fee, reduced police
overtime spending, browned out two fire
stations, employees contributed employees
temporarily contributed 10% of their
compensation as well as increased their
retirement contribution, eliminated positions,
reduced Library and Senior Center services.
2010-2011 Laid off 80 police officers
2011-2012 Eliminated the Oaklanders Assistance Center
and staffing for the Public Ethics commission.
Reductions have often come from staffing reductions and service cuts.
Fiscal Year Reductions/Balancing Measures
2020 –2021
Used Rainy Day Fund, laid off temporary and
part -time employees, froze positions, used
ballot measure revenue, temporarily
suspended financial policies
2021–2022 Used one -time ARPA funds
2022 –2023 Used one -time ARPA funds
2023 –2024
Used one -time ARPA funds and fund balance,
froze positions, allowed for employee
attrition/vacancies, delayed spending
2024 –2025
(proposed to
date)
Eliminate 2 police academies, brown out 3 fire
stations, reduce community grants and
contracts, institute freezes on hiring, travel
and training, laid off 42 employees
Source: SPUR analysis of budget memos
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To close the deficit and adopt a balanced budget the city must increase revenues or reduce expenditures. Oakland voters have adopted a number of new taxes over the years. 2004
Measure O - Library Services and
Measure Y - Violence Prevention
2018
Measure AA
Adopted Children’s Initiative
2020
Measure Q - Parks,
Litter and Homelessness
Source: SPUR analysis of “Tax Revenue by Source, Governmental Funds,” Oakland Annual Comprehensive Financial Reports . 2022
Measure Y - Oakland
Zoo
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The fiscal landscape:
• Adjusting to
financial challenges
• Sustaining core
services and local
control
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Oakland’s Four Deficits
• Ongoing Structural Deficit
• Service Deficit
• Deferred Maintenance Deficit
• Equipment and Technology
Systems Deficit
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• Local measures have often contained maintenance of effort or other provisions that mandated matching spending from
existing City resources
• With the City’s Road Map to Fiscal Health staff presented a report to the Finance and Management Committees in February 2026 that outlined the multi -year process required to meet all of these provisions
• Providing the required GPF match for the Measures C and D which support the operation of the Oakland Public Library. The budget also achieves the minimum staffing for the City Auditor’s office under Measure X.
Maintenance of Effort - Matching Funds
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Building on Past Progress
• Sustaining the Fiscal Discipline from the FY 2024 -25 Balancing actions including expenditure controls and improved revenue collections
• Successful Bond Issuance including front loading 180M of Affordable Housing
• Current Year Fiscal Discipline and Resulting Balanced Projections
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Roadmap to Fiscal Health
Muti -Year Strategy to:
• Achieve Structural Balance
-
-
Establish a fiscal health executive team
Regular progress reporting to Mayor
and Council
•
•
Restructure pension and other benefit costs
Develop multi -year plans to:
-
-
Meet voter -mandated staffing levels for city
services
Invest to sustain the City’s infrastructure, fleet, and technology
•
Implement fiscal reforms and improve financial policies • Continue efforts to diversify the revenue base and strengthen accountability The City’s website has a
page dedicated to the
Roadmap to Fiscal
Health.
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FY 2026 -27 Mid -Cycle
Budget Proposal and
Spending Plan
Betsy Lake, Acting City Administrator
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Budget Overview
FY 2025-26
Biennial Adopted
FY 2026-27
Midcycle Proposed
General Purpose Fund $ 791,285,083 $ 812,858,494
Restricted Special Funds $1,382,722,509 $1,461,240,387
Total – All Funds $2,174,007,592 $2,274,098,881
Full-Time Equivalent
Positions - GPF 2,082.81 2,137.55
Full-Time Equivalent
Positions – All Funds 2,400.95 2,432.69
• Totals $2.27 billion across all funds, including restricted and capital funds. • The p
lanned General Purpose Fund (GPF) Expenditure of $812.9 million in FY 2026- 27 whic
h is $44.1 million less than the planned GPF expenditure from year 2 of the FY 2025-27 Adopted Biennial Policy Budget but larger than the current year.
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Core Emergency Services and
Community Safety Operations
Maintain Fire
Engines
Preserve Sworn Police
Staffing
Establish Constitutional
Policing Administrator
Maintain Violence Prevention and Cease -
Fire Related Staffing/Coordination
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Homelessness &
Neighborhood Cleanliness
Maintains homeless outreach efforts
Restore illegal dumping cleanup
Restore environmental enforcement
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Special Activities Permitting Enforcement
Slightly E xtend Senior Center Open Hours
R estore Mayor’s Sum m er Jobs P rogram
Maintain Staffing at R ec Centers, Libraries, Housing & R ental Assistance P rogram
Restore Branch Staffing & Funding
R estore Staffing at Oakland Anim al Services
Quality of Life
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Increase Measure U Capital Improvement Budget
Allocate Measure U Funding toward Street Surfacing P rojects Invest in Com plete Streets projects
M aintain E xisting K K -Funded Investm ents
Fund Facility Im provem ent P rojects
Support Safety and Security P rojects
Capital Investments
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FY 2026 -27 Midcycle
Process
Timeline:
May 15: Proposed Budget
Released
Special Council Budget Meetings :
• June 1
• June 12
• June 17
By June 30: Budget Adoption
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Ways to Stay Engaged
• Volunteer on a Commission/Board, such as the Budget Advisory Commission
• Tune into the Finance and Management Committee meetings • Engage with your Councilmembers
OAKLANDCA.GOV/BUDGET
Thank you
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