"Death and taxes" - Oakland City Council is the one who knocks
The city council finance committee spitballs ideas to extract an additional $40 million in taxes from its residents and businesses
Oakland has a lot of taxes. It is difficult for the average person to keep track of them all, much less to fully comprehend their true scope and purpose. Many line items on the tax bill are mysteriously labeled and require hardcore research to figure out what they are, like the one labeled simply, “City of Oakland 1.” (It’s the Pension Override Tax that Oaklanders have been paying since 1981.)
Oakland’s various property-related taxes currently add up to nearly 1.5% of a typical home’s value. That’s an $11,150 property tax bill each year for the median home1 in Oakland. And it’s far more than the 1% limit established2 by Proposition 13, owing to Oakland’s extensive use of parcel taxes and overrides.
Property taxes are not the only taxes that are remarkably high. Oakland’s sales tax was raised in April to 10.75%. Only one California city has a higher rate: Lancaster/Palmdale in Los Angeles County.3
Yet Oakland intends to ask voters to give even more. The city appears determined to raise another $40 million in taxes from residents and businesses. When city council passed the city’s fiscal year 2025-2027 budget last June, it added $40 million of hoped-for new tax increases to its budget to make ends meet. That is something akin to taking a second mortgage on your home, based on hoped-for income from a new job that you haven’t even applied for yet.
[Editors’ note: This deep dive on potential tax increases, a major topic on the Oakland City Council Finance & Management Committee meeting agenda for October 28, replaces our Agenda Watch column for this week.]
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The Oakland tax mill
New tax measures appear on ballots in seemingly every election cycle these days, and voters often approve them. Yet Oakland’s streets and sidewalks continue to be clogged with trash, its police force continues to be woefully understaffed, and its political leaders’ financial decision-making continues to be most charitably described as questionable at best.
The government collects taxes in order to provide the services that most people agree the government should provide. This is a necessary arrangement that most reasonable people agree with, and a foundational aspect of government.
But when the government fails to provide a level and quality of service that is reasonably commensurate with the amount of taxes it collects, then what? When the ship of government is sinking into a financial abyss, its heavy ballast dragging it ever down into the deep, what should the government do to stay afloat? In Oakland, the answer routinely is to collect more taxes.
As more taxes are loaded on to save the sinking ship, the thinner the justifications for new taxes tend to become, and the farther from view the accumulated burdens tend to recede. Discussions about the many varieties of taxes often become problem-solving exercises on how to convince a majority of voters to tax themselves, or to tax somebody else, at the ballot box.
Virtually absent from such explorations, aside from the technicalities required for the tax measure to pass legal muster, are reflections on the long-term impacts and unintended consequences the tax may have. Rarely are questions asked as to how and why the city services came to be in such urgent need of salvation in the first place.
One may wonder, why are there so many different taxes in Oakland? What are all those taxes actually being spent on? And given the regrettable state of some of Oakland’s public services, why even bother paying taxes at all?
Oakland Report is taking a closer look at Oakland’s many taxes and the ballot measures behind them — what the taxes were originally for, how they came to pass, and how they are being used now.
As a first step, we’ll take a closer look below at the upcoming Oakland City Council Finance and Management Committee meeting on Oct. 28.
A menu of tax hikes for city council to peruse
As the agenda materials state, the finance committee will be reviewing an extensive menu of options to “raise an additional ongoing $40 million in general purpose fund revenues.” These options were assembled by the city administration in fulfillment of the budget directive for fiscal years 2025-2027.
As the city administration frames it, the task at hand is “to adopt or increase a tax effective July 1, 2026 to provide ongoing resources for public safety services and to maintain key equipment, IT systems, and 911 investments.” That reads very much like the question one would find on a ballot, which suggests that the city has already identified the essence of its sales pitch: to exploit residents’ concerns about public safety and the severe shortage of police officers.
Never mind that the city could use the new taxes to displace, rather than add to the funds previously committed to public safety. Never mind that the new taxes would not hold the city to any meaningful standard for efficiently and effectively using the funds.
Oakland already has taxes “to provide ongoing resources for public safety.” The most recent such tax, Measure NN, was passed by Oakland voters in November 2024. But as Oakland Report reported earlier this month, the tax was not a two-way deal. While taxpayers have an obligation to pay the tax, the city has a loophole that allows it to suspend its obligation to maintain the minimum 700 police officers promised in return. There are now fewer than 600 officers on duty, yet the city continues to collect and use the tax funds at its total discretion.
In that context, this Oct. 28 agenda item has two staff reports that suggest the committee is searching for just the right recipe to win votes at the ballot box.
The first report, dated Sept. 23 and previously reviewed by the committee on Sept. 30 provides a menu of all the taxes the city conceivably could try to increase. Included are explanations and calculations for each tax and brief analyses of the impacts to various constituencies, the likelihood of voter approval, and in some cases, the potential strength of public opposition.
The second “supplemental” report dated Oct. 16 is perhaps the more interesting of the two. It lists the questions council members had about the menu in the first report, and provides some analysis in response to each question. It provides insight into the council members’ and staff’s deeper thought processes.
A new lease on life — replacing the Pension Override Tax
The first council question in the report relates to the Pension Override Tax, which is set to end in 2026. The old retirement system into which Oaklanders have paid this tax since 1981 will be fully funded this year, leaving the city with an estimated $340 million surplus in its account balance. (The surplus is comprised of the existing $260 million balance plus approximately $80 million of additional taxes to be collected this year from the “City of Oakland 1” tax line.)
The idea is to replace the expiring tax with a new parcel tax that can be applied toward general city operations instead of paying down pension liabilities. Oakland Report made a similar suggestion one year ago.
The nature of the council’s question suggests they want to pitch the idea to voters as a tax reduction for some single-family homeowners, a group that can form an influential voting bloc under the right circumstances, even though the total amount of tax collected would be higher overall. Calculations in the report highlight proposed new $40 million, $50 million, and $60 million “parcel tax targets,” along with the percentages of Oakland’s single-family homeowners who would pay less.
This proposal is likely to get serious consideration by the committee and eventually the full city council for a few reasons.
First, it has the potential to generate a lot of tax money for the city.
Second, it has a connection to public safety, albeit a somewhat tenuous one with respect to the narrowly-defined purpose of the old levy which was for a police and firefighter pension fund.
Third, the ballot measure could be sold to voters as simply replacing an expiring tax.
Finally, the new tax could be sold as a tax decrease for a critically important bloc of voters, even though the total amount of tax collected would be much higher.
This rings many bells for the city, and it would not be surprising to see this recipe or something very similar to it on the ballot next June.
Squeeze play — increasing real estate transfer taxes
The second council question appears to be about figuring out just how much the city could increase the real estate transfer taxes collected from the more expensive properties without triggering a slowdown in property sales or catalyzing “politically challenging” voter sentiment against the measure.
The city collects a tax every time a property changes hands. The more expensive the property, the higher the tax rate the city collects. For example, the current rate on a $300,000 property sale is 1.00%. According to the Sept. 23 report, that rate is not proposed to increase. The current rate on a $725,000 property sale, the average home price in Oakland, is 1.50%. That rate is proposed to increase to 2.00%, which would result in a $3,625 tax increase on that average home sale to a total $14,500 in transfer tax.
The city estimates having collected $66 million in transfer tax last fiscal year. This appears about typical for recent years, but the amounts can vary wildly from year to year because they depend on the ever-shifting volume of sales in the real estate market. A single high-end property changing hands, for example the iconic Lakeside Drive office tower that Kaiser Permanente sold to PG&E earlier this year for $908 million, can generate a hefty amount of transfer tax. But sales like that don’t happen every year, or even every few years.
The current rate for property transfers valued above $10 million is 2.50%, which in the case of the Lakeside Drive office tower sale pencils out to a whopping $22.7 million in transfer tax. If the rate had been increased to 4.00% as proposed in the staff report, the transfer tax on that sale would have jumped to $36.3 million.
The city was aware of this volatility, thus it included in its Consolidated Fiscal Policy that the real estate transfer tax should be expected to fund no more than 15% of its General Purpose Fund. However, even that view seems now too rosy, with the current $66 million amounting to less than 10% of the General Purpose Fund budget.
Shock value — raising taxes on utilities
The third question is about increasing utility consumption taxes on natural gas while lowering them for electricity. The implication here appears to be that natural gas is bad and electricity is good, so maybe voters will go for raising taxes on the bad thing and lowering taxes on the good thing, if the net result is more tax money for the city.
However, this approach is likely to receive less enthusiasm because it is regressive — utility taxes disproportionately affect low- and middle-income households, and the staff report says that this particular maneuver would actually result in around $50,000 less tax collected overall.
Several other questions seem to center around the notion of taxing people or activities that the city judges to be bad or undesirable in various ways. These ideas include taxing Amazon deliveries, industrial emissions, diesel fuel, “above baseline” consumption of utilities, vapes and tobacco products, alcohol, and “luxury sales.” Apparently even the city’s popular centerpiece park is considered too much of a good thing, with one idea to charge “congestion pricing” around Lake Merritt.
The report provides analyses and data on each of these ideas and outlines various regulatory, political, or practical difficulties they would face. In one case the report-writer explains that the council member’s idea is flat out illegal per the state constitution.
Another idea in this category is to tax multi-dwelling residential properties (i.e. landlords) and commercial properties at higher rates than single-family homes. The implication appears to be that landlords and big businesses are bêtes noires in the eyes of many Oakland voters, which is good when trying to pass a measure that taxes those groups more. However, it doesn’t take a political savant to predict that those groups almost certainly would express strong and vocal public opposition on grounds that further burdening housing providers through higher taxes would work against the city’s housing supply goals and state mandates.
If enacted, this tax increase could collect more than the predetermined $40 million target. But as a special tax, it would need to get approval from two-thirds of Oakland voters, a high bar.
Use it or lose it — increasing vacant property taxes
A couple other ideas appear to possibly have some legs with the committee based on the way they are presented in the report, except for the fact that Oakland already has taxes with very similar mechanisms.
One is about collecting taxes on undeveloped land, and the other is about taxing long-vacant storefronts. The implications in both cases appear to be that the owners of these properties already have more than most people, and could be characterized as hoarding and wasting resources at a time of need for more housing and businesses.
The subtext here is that many voters are likely to be amenable to the notion that wasteful property owners should be taxed more, and the tax itself conveniently would not directly affect most voters. Seemingly absent from consideration is the full breadth of Oakland’s economic distress that contributes to these vacancies, including a city government that some consider neglectful and even punitive to business, in particular with respect to fundamental issues such as public safety and cleanliness.
Furthermore as noted above, Oakland already has a tax on vacant properties, implemented when voters passed Measure W in 2018, and it already includes taxes both on undeveloped land and on vacant storefronts.
On the undeveloped land tax increase idea, the staff report offers a few charts indicating that adding a separate tax targeting undeveloped parcels (instead of undeveloped “land”) could conceivably achieve the predetermined $40 million target. However, “it remains an untested tool within current property tax frameworks,” meaning that this distinction without a difference has never been tried before.
On the vacant storefront tax increase idea, the staff report notes that the current tax collects $3,000 per vacant unit, but curiously offers no total amount that the tax has collected citywide. It instead points to an ABC news story that says a similar tax in San Francisco has yielded only $5 million since 2022.
Death and hot dogs
All the technocratic discussion of tax percentages and regulatory requirements aside, the underlying questions before the finance and management committee on Oct. 28 remain:
Which recipe has all the right ingredients to hit the spot and make the sale to the voter?
Which of the potential taxes can achieve the predetermined financial target?
How can the measure be framed in a way that avoids triggering stiff opposition from influential constituencies and interest groups?
Who are the people or groups that can be taxed in sufficient measure to achieve the target, yet who most voters won’t overly sympathize with and who some voters perhaps might even relish the prospect of taxing more?
Oakland will sadly soon be losing two of its beloved old-school hot dog joints, Top Dog4 and Kasper’s Hot Dogs5, but one needs not travel further than Oakland City Hall to see the sausage being made. Just try not to look too closely at the ingredients.
Oakland Report is by no means comprehensive in our coverage of public meetings in Oakland. The scope and frequency of public meetings are far more than we can presently cover. You can review the full agendas of all six upcoming council committee meetings on the city council meeting calendar, or by following these links to specific committee meeting agendas:
Finance and management committee, Oct. 28
Life enrichment committee, Oct. 28
Public safety committee, Oct. 28
Rules and legislation committee, Oct. 30
Do you have a tip about an Oakland agenda item that you think should get a closer look? We want to hear about it! Contact us at oaklandreport@citizensoakland.org.
ATTOM Data. “Oakland, CA Real Estate & Property Data.” ATTOM Data Solutions. Accessed Oct. 26, 2025. https://propertynavigator.attomdata.com/data/us-real-estate/ca/alameda-county/oakland/#:~:text=Total%20Residential%20Properties%2092%2C156,year%2Dto%2Ddate%29%20398
Wikipedia contributors. “1978 California Proposition 13.” Wikipedia, The Free Encyclopedia. Accessed Oct. 13, 2025. https://en.wikipedia.org/wiki/1978_California_Proposition_13
California Department of Tax and Fee Administration. “California City & County Sales & Use Tax Rates (effective October 1, 2025)” CDTFA. Accessed Oct. 25, 2025. https://cdtfa.ca.gov/taxes-and-fees/rates.aspx
Madeline Wells, “Berkeley’s legendary Top Dog to soon be down to one location.” SFGate, Oct. 15, 2025. https://www.sfgate.com/food/article/berkeley-top-dog-closing-oakland-location-21102867.php
John Metcalfe, “Kasper’s, the hot dog that ‘started it all’ in Oakland, is no more.” East Bay Times, Oct. 24, 2025. https://www.eastbaytimes.com/2025/10/24/kaspers-the-hot-dog-that-started-it-all-in-oakland-is-no-more/
What an extraordinary piece of reporting. Thank you so much for doing this!
I believe you misstated this in your original premise:
"Yet Oakland intends to ask voters to give even more."
'Taxpayers' are but a small subset of Oakland 'Voters'.
And therein lies the problem.
If they were the same folks, the voting would likely be more prudent in regard to taxes, as we see in many other cities and counties.
But for better or worse, a large percentage of Oakland voters do not pay property taxes, business taxes, etc. So voting for these taxes for them is a 'free kick' and a chance to raise money from others for government programs they are told will benefit them.
I support everyone voting on sales tax because everyone pays it.
But why do so many citizens get to vote on property taxes when they don't have to pay them?
(Rent control effectively insulates them from the effects of property tax increases on their apartment buildings. No, owners do NOT get to pass it along to renters!)