Parcel tax point-counterpoint
A working document - not for publication in this form. The material will be used in a subsequent, published article.
a. Councilmember Zac Unger claimed on Nextdoor that “The article is not entirely true. The unions are getting a three percent raise this year, which will happen whether or not the parcel tax passes.” Unger’s claim is misleading at best, for a number of reasons,, starting with the fact that the unions’ raises are not guaranteed as he implies. Per the union contact Unger and the council approved in September, the $14.9 million raises are contingent on the city ending the fiscal year with a surplus of at least $9 million. The city’s desired parcel tax, which the unions have spent $400,000 so far to put on the ballot, is an essential part of the budget surplus strategy. The city’s own forecast predicts a budget shortfall of $115 million this fiscal year.
b. Unger’s staffer, Keara O’Doherty, said on Nextdoor, “the parcel tax will be on the ballot June 2. The Oakland fiscal year ends June 30. The union contract trigger will happen much before the tax is implemented.” O’Doherty’s statement also is misleading in this context, because the article actually says that the pay raises are tied to the city posting a budget surplus, and cites that language from the union contract. The desired $34 million parcel tax is a key component of achieving a budget surplus. In addition, O’Doherty’s comment raises another interesting, and odd component of the pay raise “trigger,” which is the city will make its determination of a budget “surplus” before the fiscal year has even been completed. Her comment also raises the question, which she did not answer, of why the unions are putting up hundreds of thousands of dollars to put the parcel tax campaign on the ballot and campaign to get it passed, instead of the City Council placing the tax directly on the ballot?”
c. Unger himself then stated that “the raise is based on the performance in previous quarters, not on the parcel tax. It will go through or not independent of the passage or failure of the parcel tax.” When pressed on the same counterpoints, i.e. that the budget surplus is largely dependent on the parcel tax passing; and that it is odd that the city plans to declare its year-end surplus or deficit position before the fiscal year is ended, but before the pay raise deadline in the union contract; and why are the unions putting the measure on the ballot instead of the city council -- Unger did not respond.
d. A commenter on Substack claimed that, “the raise the union negotiated is just a 3% cost-of-living adjustment to offset inflation and the parcel tax isn’t a new tax it’s just replacing an expiring parcel tax... the ‘triggered wage increase’ is capped at 3% and 2024 CPI was 2.9%. The union essentially agreed to a pay cut in real terms if the city didn’t meet revenue targets. The fact that it’s a ‘triggered’ wage increase was a concession by the union.”
But that comment is misleading because that’s not what the new contract says. What it says is that the pay raises are tied to the city achieving budget surplus.
By comparison, SEIU’s previous three-year contract in 2022 awarded a total of 14% in cost-of-living-adjustments (5% the first year, 5% the second year, and 4% the third year) that were not contingent on the city achieving budget surpluses, nor on any other contingency. It also awarded a “pandemic service stipend” in the form of five new vacation days, enhanced benefits, and $1.5 million more to covert part-time staff to full-time.
Those raises capped off twelve years of compensation increases that added $411 million in costs to the city budget since 2013. The raises also exceed inflationary cost of living adjustments (COLA) by $184 million. As a result, Oakland city employees became paid far more than similar-sized California cities as well as San Francisco.
The current one-year contract is none of those things. It is a straight cash bonus up front, and the promise of another pay raise if the city increases revenues to close the budget deficit by the end of the year, primarily by passing the new parcel tax the unions are now campaigning for (and that SEIU has donated $200,000 toward so far).
By the same reasoning the commenter is using -- which is flawed -- one could also assert that the SEIU contract is “effectively,” “de facto,” a payout to financially incentivize the unions to campaign and pay for the “citizen-sponsored” parcel tax increase. Except that our assertion is supported by the actual language in the contract, the city council’s authorized budget which includes the new tax, the city administrator’s “roadmap to fiscal health” defining the criteria for the new tax, the language in the union’s ballot measure the echoes those criteria, the unions’ campaign finance statement demonstrating their financial support for the new tax, and other evidence as outlined in the article.