New report offers grim forecast of Oakland’s economy through 2030

OAKLAND The next five years are projected to be as tough as the past half-decade was in Oakland where ripple effects of the COVID- pandemic the economics of the Trump administration and rising pension costs indicate rough financial seas ahead a new city document has discovered Oakland is facing post-pandemic struggles similar to those of other California cities but the money spent on worker salaries including overtime pay for police officers and firefighters has ballooned the city s shortfalls to levels not seen since the Great Recession The trend isn t likely to change for the rest of the s according to the summary a five-year financial forecast typically published ahead of the city s biannual budget cycle It predicts annual deficits through ranging from million to million in the general purpose fund which pays for worker salaries and other operational costs Regardless of this forecast or what definitely happens in the economic system the city remains underfunded with regard to meeting these obligations for current and past city employees to the tune of more than billion the city assessment prepared by Oakland s budget officers reported The city will need to consider additional more aggressive fiscal policies to increase funding to responsible levels to ensure the city will be able to meet its obligations the document adds Kevin Jenkins a City Council member who led Oakland as its interim mayor before the swearing-in last week of Mayor Barbara Lee proposed a new budget earlier this month that would attempt to close a million shortfall over the next two years Newly elected Oakland Mayor Barbara Lee speaks after being sworn at City Hall in Oakland Calif on Tuesday May Dai Sugano Bay Area News Group The new forecast places the expected two-year shortfall at a lower number million and overall the shortfalls in these two-year budget cycles rely on assumed costs and revenues that often do not end up aligning with reality Other costs facing the city are more fixed Retirement costs including for biological insurance and pension obligations are expected to place increasing pressure on the general purpose fund the forecast states The city has set up financial trusts to help pay down its pension obligations a approach that the new description credits for slowing the upsurge of money owed to past workers long after their retirements But on the revenue side the market system has not returned to pre-pandemic levels Fewer flights taken at the Oakland airport have contributed to an enduring dip in hotel occupancy real-estate sales have not bounced back from a decline driven by higher interest rates and the account states plainly that the city s retail market is not up to par Taxable sales are the lowest among California s largest cities lacking major retailers like Costco for example the forecast points out Meanwhile tariffs imposed by the Trump administration are expected to raise the costs of both goods bought by residents and materials needed for construction of new buildings such as steel aluminum and strength products City leaders have strived to cut spending laying off dozens of population employees earlier this year and projecting further staff reductions in the new two-year budget which spares cuts to police officers Members of the Oakland Police Department take part in a ceremony to honor the Oakland police officers who died in the line of duty on Thursday May in Oakland Calif About people including relatives of the deceased officers current and retired Oakland police officers and city and county functionaries took part in the annual ceremony The memorial wall inside department headquarters has the names of the Oakland police officers killed in the line of duty between and Aric Crabb Bay Area News Group Oakland is paying for around sworn officers but police Chief Floyd Mitchell reported Wednesday that only officers are current on the force with the rest out on either medicinal or administrative leave The city has also cut programs for free parking slashed funding for nonprofits and no longer offers grants for various populace events such as the popular Art and Soul festival We won t be able to permit all the fairs and festivals that make Oakland Oakland ' Ashleigh Kanat the city s director of Economic and Workforce Rise mentioned Wednesday at a city budget meeting Still administrators noted Wednesday the city continues to have a number of positive factors working in its favor ripe ground for maturation advanced transportation options and a downtown business scene looking to rebound Oakland is in a position to thrive Kanat reported We are so rich in assets Shomik Mukherjee is a reporter covering Oakland Call or text him at - - or email him at shomik bayareanewsgroup com