On November 15, Oaklandside, a local Oakland news outlet, published an article on the city of Oakland’s imminent bankruptcy based off a report from the city’s legislative website. However, on the very same day the article was published, the city removed the report and published a different version.
The original report projected the city would collect about $758 million in revenue in the general-purpose fund by the end of the fiscal year in June 2025, yet the city is forecasted to spend over $851 million. This means the city of Oakland is expected to have a $93 million operating shortfall in the general-purpose fund when it ends the fiscal year. The report stated that the city of Oakland must take “immediate action” to avoid bankruptcy.
However, the city’s newest report excludes references to insolvency and bankruptcy. Oaklandside received text messages from Oakland’s City Council President Nikki Fortunato Bas attacking this false reporting, and demanding a correction. Oakland officials claim they inadvertently published the report mentioning bankruptcy and released a statement that read, “The City removed this reference in the approved final draft, after internal analysis concluded that the Chapter 9 level of decision making was, and remains, premature at this time…However, that analysis does not in any way diminish the urgency of the financial discussion that needs to be held at the City Council.”
Whether bankruptcy is a possibility or not, city officials agree that Oakland is experiencing a budget crisis. There are a few major factors driving the deficit: Oakland no longer has access to federal relief money from the pandemic; real estate transactions have plummeted and Oakland experienced a significant loss of revenue potential; and the police and other departments are overspending. Filing for bankruptcy would probably involve Oakland developing a financial recovery plan to pay back creditors and restructure its debts. It could also include slashing the pensions and health plans of retired city workers.
As a result, our public works and the working people of Oakland already feel the pressure and are bracing themselves to pay the price for the city government’s negligence. The school board of Oakland Unified’s public school district (OUSD) threatened ten school mergers in November of 2024. At the most recent school board meeting on December 11, there was a powerful showing from the public (teachers, staff, students, families, and community members) to protest the mergers. Closing schools rarely results in significant cost savings. Instead, it often leads to increased remediation needs and higher dropout rates. At the recent OUSD school board meeting, the item on school mergers was not brought for debate, but it might have been addressed in closed session, and there is no telling when the mergers will be brought up for vote in the coming months.
In addition to our public schools, our public transit systems are also under pressure. Fares for BART, the public rail system, are set to increase by 5.5% on January 1, 2025. Workers for AC transit, the bus system, will be required to follow a new route realignment plan starting in March 2025 that will re-route bus lines to account for “staffing and funding limitations,” according to an AC transit spokesperson. Bus advocates have assailed the plan as racist, and say that it does not address the drivers’ punishing schedules. Drivers have declared that the transit agency doesn’t care about their physical health, and they work too much without proper breaks or even time to use the restroom.
Bankrupt or not, it appears that the working people of Oakland will be scapegoated in this scramble to balance the budget in 2025. And it does beg the question, how can Oakland (a city in the state of California, the fifth largest economy in the world, surrounded by some of the wealthiest cities and counties in the United States) be bankrupt? Those in political office will use the new presidency and incoming administration as an excuse to not raise pay, to decrease staffing, to close our public schools, and to hike prices of everything from transit to food. So let’s take this holiday season to rest up, and get ready to renew our fight in January 2025!
