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Council approves four initiatives for November city ballot

on July 27, 2010

On Monday night the Oakland City Council approved the addition of four initiatives to the city’s November ballot, all geared towards bringing revenue into the cash-strapped city.

The process of deciding which initiatives to accept for the ballot required so much public comment and council debate that it lasted two full evenings. After dismissing its meeting last Thursday night without taking a vote, on Monday the council voted to put three taxes on the November ballot: one for marijuana cultivation and distribution, one for telephone access and trunk lines, and a parcel tax for each residence. Voters will also be allowed to vote on an amendment to Measure Y, the 2004 ordinance that allowed the city to receive $20 million for police, fire, and violence prevention programs if it employed 739 police officers.

The council voted 5 to 0 to place a measure on the November ballot to tax marijuana dispensaries and cultivation at 5 percent across the board. Councilmembers Jane Brunner, Desley Brooks, Ignacio De La Fuente, Patricia Kernighan, and Larry Reid all voted in favor of the tax; Councilmembers Rebecca Kaplan, Nancy Nadel, and Jean Quan abstained. Should Proposition 19 — the statewide initiative that would legalize recreational marijuana — pass, the council placed a provision in the measure asking Oakland voters to approve a 10 percent tax on all non-medical marijuana sales in the city.

Oakland currently taxes medical marijuana dispensaries at 1.8 percent. This morning the city council will take a final vote on an ordinance that would permit four large-scale marijuana growers to operate within city limits. The ordinance passed last week on first read. These large-scale grow operations would subject to the 5 percent tax if voters pass it.

“[Oakland will] be the first one to set the tone,” said De La Fuente on why both cannabis cultivation and dispensaries should be taxed at 5 percent. “And we’ll get the benefit of revenue that we desperately, desperately need.”

The council voted down a compromise offered by Quan, which would have taxed medical marijuana dispensaries at 2.5 percent rather than 5 percent. “I just think we don’t need to set the [dispensary] tax twice as high as the city next door,” Quan said, referring to Berkeley, whose voters will also go to the polls in the fall and face a 2.5 percent dispensary tax on their ballot.

Councilmembers Kaplan, Kernighan, Nadel, and Quan voted in favor of the amendment, with councilmembers Brooks, De La Fuente, and Reed voting against, arguing that the dispensaries are established taxpaying businesses and could afford the tax. Council president Brunner abstained from the vote.

The council unanimously voted to place a Measure Y amendment on the November ballot. If voters approve the measure, the city will retain the $20 million it received in taxes without being required to maintain a predetermined number of police officers. If a Measure Y amendment doesn’t pass, the city will be forced to lay off another 122 police officers in January, bringing the number of police officers below 600. The city already laid of 80 officers this July.

Councilmember Rebecca Kaplan placed a provision in the measure that will ensure the return of problem solving officers to the neighborhood community policing beats. Councilmember Quan noted they “are the officers the voters know the best.”

A monthly telephone access line tax of $1.99 per phone and $13 per business trunk line will also be on the ballot in November; cell phones will be included in the assessment. Taxes raised would be allocated to the city’s General Fund and could be used to rehire laid off police officers. The measure passed 7 to 1, with De La Fuente voting against it.

But the greatest controversy and debate amongst the council Monday came in discussing the proposed parcel tax. The council voted 5 to 3 to put a four-year, $360 parcel tax per residential property on the ballot, designed to help raise money to fund police department staffing. The council announced it had reached an agreement with the Oakland Police Officers’ Association (OPOA) for officers to gradually contribute 9 percent to their pensions in exchange for the promise of no more layoffs for three years. Supporters of the ballot measure said that only way the city can fulfill the promise is with the additional revenue raised by the parcel tax.

If the parcel tax were to pass, Oakland police officers would start contributing 4 percent to their pension funds as early as January 2011. Their contributions would increase to 7 percent for fiscal year 2011-12 and would hit 9 percent in fiscal year 2012-13. Oakland police officers currently contribute nothing to their pensions, but were slated to start contributing 2 percent by the year 2012.

Councilmembers Kaplan, Brooks, and De La Fuente voted against the parcel tax, with De La Fuente promising the council to actively campaign against it. He argues that the parcel tax doesn’t address the city’s fundamental budget deficit or structural spending problems.  “I think $360, especially in a single family home and no matter the value of the home, is really going to push even more people over the edge,” he said. “We are not doing anything else except raising taxes. We are not looking at any other structural changes. We are not looking at modifying what we do. I think that at some point the train will derail and I don’t think it is going to take that long.”

Councilmember Brooks agreed. “I think we need to look at a different way to do this, but I’m not willing to burden the residents of Oakland with extra [taxes] when they said they are not going to do this,” she said.

It was widely acknowledged by the council that the parcel tax is unlikely to pass in the fall, but many councilmembers voted for it to let Oakland voters decide what they will and will not pay for. “This gives the public the opportunity to make that evaluation rather than us making it for them,” said Nadel.

As Brunner pointed out, putting the tax on the ballot was the only way to reach the long-awaited compromise with the police union. “If we do not do anything, if the revenue doesn’t pass and the amendments don’t pass, we are laying off [an additional] 122 police officers,” she said. “We will have laid 200 police officers when crime has gone down and the chief is really changing things. Public safety is parks and recreation, but public safety is also the police department.”

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  1. MarleenLee on July 27, 2010 at 7:54 pm

    Your story contains several errors. First of all, neither the City nor I have ever claimed that Measure Y requires employment of 739 officers. Rather, I have claimed, in my previous lawsuit, that Measure Y required employment of 739 non-Measure Y officers, before it could collect Measure Y money to pay for an additional 63 officers. The City has claimed, in response, that all it needs to do is “appropriate” sufficient funding for 739 non-Measure Y officers. Nobody has ever claimed that total staffing of 739 is required, and that’s not what the Measure says.

    In addition, you claim that if the measure passes, the City will “retain” the $20 million it “collected.” Wrong again. The City was forced to stop collecting the tax effective July 1. If the measure passes, they’ll be able to start collecting it again. But they will have lost the revenue from July 1 until the end of the year.

    Next, you claim that if the measure doesn’t pass, the City will be “forced” to lay off additional officers. Not true. That’s the City’s claim. Please don’t state it as fact. The City has lots of other options. It can make cuts elsewhere. It could try to repeal Kids First. Blah blah blah. Please don’t just print the City’s press release verbatim.

    Lastly, you neglect to mention that the deal with OPOA must be approved by its membership. That hasn’t happened yet.

  2. […] pot taxes: Berkeley’s would tax medical marijuana sales at 2.5 percent, while Oakland’s would charge 5 percent of all marijuana receipts. Both of those cities are proposing a 10 percent tax on marijuana sold for recreational use, […]

  3. Michael Beaty on July 29, 2010 at 4:47 pm

    About the city council’s proposed parcel tax: no, no, and HELL NO! Parcel taxes are supposed to support infrastructure and capital improvements, not general operations.

    Don’t get me wrong, I think Oakland needs 1,200+ sworn officers (and a DA with a backbone would certainly help, too). But abusing parcel tax powers to do an end run around Prop. 13 is not the way to accomplish it, worthy goal or not.

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