My Oakland City Council colleagues think they can pay recurring bills with a one-time sports deal — but we can’t afford the overdraft fees.
You can’t spend money that you don’t have yet — a fundamental lesson in basic finances. Earlier this month, a majority of my colleagues did just that by closing our budget deficit with $63 million from the sale of the Oakland Coliseum — a sale that hasn’t yet happened because no deal has been signed.
Last year, the same councilmembers voted to use $20 million from the sale of Oakland’s former Raiders’ training facility to balance our budget — a sale that also hasn’t yet happened. Oakland still has not received a single dollar from that deal, plunging us further into our disastrous deficit.
Surprisingly, Mayor Sheng Thao and five of my council colleagues thought it wise to repeat this play with the Coliseum sale — only this time messing around with a whole lot more money and financial risk to Oakland’s future.
In my 18 months on this council, I consider this budget vote to be one of this body’s most wildly irresponsible choices. A self-serving decision made in desperation that will drive us deeper into a destructive deficit — which is why I voted against this budget.
By rushing to close our budget with an illusory Band-Aid of $63 million yet to come, the mayor and City Council prioritized temporary relief and a false sense of security over doing the difficult work of making real cuts to balance our budget in support of our future. They choose to kick the can to next year’s City Council, which will then have to make $100 million in budget cuts.
Since the mayor is defending a tough recall and six of eight councilmembers are facing elections this November, they passed the buck to the only two Oakland elected leaders guaranteed to be here next year — and I am one of them.
Whether or not the Coliseum sale goes through, the incorporation of funds from it into this year’s budget spells chaos for Oakland.
Because the city took such a massive financial risk, we will likely see an immediate downgrade in the city’s AA+ bond rating. Bond ratings are a city’s credit score — as it sinks lower, our interest rates increase, and everything costs us more. This means we may be unable to raise money to fund $200 million in our capital budget for affordable housing and infrastructure projects. Not to mention the $100 million deficit in next year’s biennial budget that will have to be closed through severe cuts or layoffs.
If the Coliseum deal isn’t signed and we don’t get $15 million in initial payments by Sept. 1, our city goes into fiscal lockdown: We will be forced to cut our police force to 600 officers, close five fire stations, halt all city contracts, and more. Councilmembers were made fully aware of these realities by our Finance Department yet willfully ignored their warnings.
I am not opposed to the sale of the Coliseum to the African American Sports and Entertainment Group — a set of admirable, Oakland-rooted, Black professionals committed to a real vision of economic development and prosperity for East Oakland.
However, it was a grave mistake for the mayor to rely on funds from this sale to fill our $177 million general fund budget deficit in her proposal to council. It is reasonable to assume that with so much political uncertainty — a certified mayoral recall, FBI raids and a supermajority of councilmembers facing elections this fall — more time may be required to close this complex deal.
We can’t pull a miracle out of our hat to save this city. We will need bold leaders with the courage to make tough decisions that don’t mask the truth.
Janani Ramachandran is a member of the Oakland City Council, a musician and a former public interest attorney.
