Wednesday, June 22, 2011

Oakland Struggles to Avert Bankruptcy

The finances of the city of Oakland are looking very grim these days. Facing a $58 million budget deficit that needs to be closed in a little over a week, Mayor Jean Quan just got some very bad news: as reported by the San Francisco Chronicle, the city failed yesterday to nail down about $28.7 million in concessions from its public employee unions. While the negotiations are ongoing, Oakland's solvency will be very much in doubt if it can't get the unions to agree to cuts.

As the Chronicle piece makes clear, Quan deserves a substantial share of the blame for the predicament she's in. The council's delay in formulating its counterproposal is due, in no small part, to the Mayor's decision to present three budget proposals instead of one, and to do so a month later than promised. Oakland residents were supposed to get their first look at the City Council's proposal yesterday; instead, they'll have to wait for a special meeting next Tuesday, just days before the budget is due. The delay has also pushed off Quan's plan for a parcel tax expected to generate $11 million for the city. Still, the Chronicle largely lets the unions off the hook, in spite of their less than constructive contributions to resolving the city's budget mess. Given the narrow time frame, it's not clear what Oakland's plan is should the unions refuse to help out. Quan's budget already calls for closing four fire stations, five rec centers, and nearly all of the city's libraries, and her proposal assumes concessions from city workers. If those concessions don't happen, it's not clear where the city has room for further cuts.


  1. RobJun 22, 2011 02:41 PM
    Is municipal bankruptcy an option? Or have the public employee unions and their Democratic lackeys in the state legislature managed to foreclose on that possibility through some legislative carve-out?
  2. GSLJun 22, 2011 02:50 PM
    As of now, bankruptcy is an option. Though, as you point out, unions and Democratic legislators are trying to make it more difficult.