Local ballot initiatives for Oaklanders, analyses

I am concluding my election writing with analyses and recommendations on local measures on the ballot for Oaklanders. In this case, our measures are those being voted on in the city itself, Oakland Unified School District, Alameda County, the AC Transit District (buses), and the BART District. I am going from biggest areas (BART) to smallest (the city).

None of these will be yes on substance and no for anticlutter: the vast majority are revenue measures, which need voter approval by law; the remainder amend either the city charter or prior ballot measures.

Discussion: Tax levels

There are a number of measures on our ballot this year that would bring in tax money – sometimes to pay off bonds over time for infrastructure investments, other times simply to help fund annual operations. Except for the soda tax, this year they all happen to target property taxes, either as additional rates charged as a percentage of assessed value (only apparently allowed in the case of bonds) or as parcel taxes, which are a flat amount on each parcel of land, no matter its value.

I mostly examine in my analyses whether they are worthwhile investments, but there is the charge, “Aren’t they just piling new taxes on us bit by bit, each one defensible individually, but excessive in total?” So let’s take a look at how much they actually add up to. The median assessed (taxable) home value in Oakland is $434,000; this is far lower than the median actual value as it includes the Prop 13 assessment growth cap and various exemptions. Cross-referencing Zillow and the county assessor website, I found a home whose assessed value was slightly below that, $375,000. What would the combined impact be on them? Right now, their tax rate is 1.35%, which comes to $5,065, or when adding plus various charges and assessments (including those parcel taxes), a total of $6,035, so the overall effective tax rate is 1.61%. All five of the relevant measures, if passed, would bring the bill to $6,537 or 1.74% – a very small overall increase, even if you consider other taxes may be added from time to time. The vast majority of the increase is Oakland’s KK; the county, transit, and school measures are small by comparison.

Our tax level in California generally is about middle-of-the-pack compared to other states, despite our higher cost of living, higher level of service provision, and large percentage of population in poverty, again, largely because of the heavy restrictions put in place by Prop 13. I would say to the charge above that that the truer picture is one of local communities continually straining to keep revenues adequate to services, and special taxes are one way they keep things functional around the margin, but still only with difficulty.

That is California as a whole. I won’t pretend Oakland isn’t a relatively high-tax city: it is, from my look at the data, on the high end of taxes per capita across our large cities. I want to understand that data better; there’s probably inefficiency in how we go about services, and it’s not impossible the openness of the public to newer taxes is related. But I suspect a great deal of the gap is the comparative tax base (more value out there to tax), cost of living, level of services the city collectively wants to provide, and the proportion of the population that needs those services. I would like to have it be more transparent that we get value for money; at the same time, starving the system and hoping things get better is not a recipe for success. When they are good investments to be made, I am inclined to make them, and simultaneously push for efficient government.

I do think it’s problematic that some of the proposed measures are parcel taxes, given their regressiveness, but it appears to be one of the few options legally open: or rather, given the state of East Bay politics, I’m sure that if ad valorem (value-scaled) taxes were an option under the Constitution for any purpose other than bonds, they would be used all the time. It’s also worth keeping in mind that the more we target taxes on the especially high income, the more volatile that revenue will be; and parcel taxes do typically have means to exempt certain low-income homeowners.

Measure RR: Infrastructure bond (BART)

Measure RR is about the adequacy of BART infrastructure – cars, rails, electrical and control systems, stations, etc. BART is critical to getting everyone around the Bay (26% of downtown SF workers and 24% of downtown Oakland workers get there by BART), but underfunding hits them like the rest of our critical services, and it’s been aging over time, as witnessed by the increasing delays and other incidents like fires. Some big projects, like a new Transbay Tube, are needed, but the stars are not yet aligned for that: in the meantime, BART badly needs an infusion of capital.

RR would raise bonds of $3.5 billion, and pay for them with increased ad valorem taxes across San Francisco, Alameda, and Contra Costa Counties, of a maximum of 0.0001749% of value ($17.49 per $100,000 assessed value) – usually lower since the bonds will not be issued all at once, and most of the time they will be either ramping up or ramping down. This is an excellent time to borrow for this kind of spending, as BART has a triple-A Moody’s rating and can likely now get some of the money at as little as 2.5% interest. A new control system will let them safely space trains closer together and increase throughput; a bigger maintenance facility will let them shuffle cars in and out of service more efficiently; tracks and cars need to be replaced, and tunnels repaired; in short, the whole system needs this infusion to best meet the high demands it’s being put to without breaking down.

Note that even if you exclusively drive, BART likely helps you by cutting congestion in the most-trafficked corridors, according to compelling research. Not that your sole criterion for social investment should be whether it helps you directly, but for what that’s worth.

Finally, it allows a small amount of its money to be used for studying expansions including a second Transbay Tube. This is increasingly being talked about because the current Tube is a bottleneck (almost literally): with only two tracks running under the Bay, all-night service is impossible and increased capacity is challenging. A new Tube would be quite expensive, and you might see that in a future measure, but it would be worth it.

Taxation: The maximum tax rate this is estimated to require is $17.49 per $100,000 of assessed value, but that is in 2036 once the last bond has been issued; in most years they will be either ramping up to or ramping down from that point. The best estimate of the weighted average annual tax over the entire life of the measure is actually $8.98 per 100,000, so for the hypothetical slightly-below-median Oakland homeowner described above, that would be an additional $33.67 paid annually.

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes

Measure A1: Affordable Housing Bond (Alameda County)

We all know housing is unacceptably expensive in the Bay; it’s the market’s invisible blood-encrusted two-by-four. The high cost of housing is draining incomes, increasing commutes, preventing savings and asset-building, promoting homelessness, and letting owners make windfall profits. Protections for renters can be helpful depending how they work, but in the end it largely comes down to supply; we need a big infusion of housing stock.

There are those who say more market-rate housing will naturally bring prices down, but that is too much classical hand-wavy “trust the market” logic for me. If new construction is slow enough, and there are enough wealthy newcomers, speculators, and tourists to keep buying, it’s quite possible, even likely, that the the wealthy will monopolize new units long enough for everyone else to go broke – or put in more economic terms, the market will take far too long to reach equilibrium. In other words, I believe the surest way to make sure new housing is affordable to those with low incomes, is to reserve more of it directly for such people.

In this light, Measure A1 is a much needed investment, if not itself sufficient either, of course. It’s a bond of $580 million, of which the plan is to spend about 80% ($460m) developing rental housing, and $120m on owned housing.

Allocation details: the smaller portion for owned housing will assist people make down payments, focusing on middle-income residents and those likely to otherwise be displaced, assist new construction by nonprofit developers for the low-income to purchase affordably, and will make accessibility and rehabilitation improvements so that seniors, persons with disabilities, and other low-income people can stay safely in their homes. Of the larger portion for rental housing, the vast majority will be just what it says on the label, development largely for low-income households, focusing on those under 60% of average median income, which for a family of four is under $56,000; some space will also be carved out for higher- or lower-income groups, including homeless and disability recipients. Another $35m will be a special pool for pouncing quickly when opportunities emerge unexpectedly, like when a building comes on the market that could be purchased to become long-term affordable housing. (You will not find this detail on the ballot, because the measure text wisely goes easy on setting hard constraints, but it’s from the county’s public planning.)

This is also the right kind of thing to spend with borrowing – critical infrastructure – and would likely come at a very favorable interest rate since Alameda County is currently rated triple-A from Moody’s, much higher than the state of California. Another strong yes.

Taxation: Because they intend to issue all the bonds by 2022, faster than RR, the maximum rate is probably close to the weighted-average rate. That makes it around $13.90 per $100,000, or $52.12 for our sample Oakland homeowner.

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes

Measure C1: Parcel tax extension (AC Transit)

This is a parcel tax of $96 per property per year to keep AC Transit funded – it was passed in 2008 for 10 years, and would otherwise expire in 2018; this would continue it through 2036 with no increase.

Buses are arguably a more important form of public transportation than the admittedly sexier heavy rail; hundreds of thousands are dependent on it – 168,000 rides per weekday in 2014-15, including 13,500 transbay commuters. It’s more flexible than heavy rail, covering more areas with less upfront investment. With more work over time, like the Bus Rapid Transit now in progress on International, it is possible to make it more reliable and attractive to middle-income people, opening up more affordable opportunities for everyone while keeping carbon emissions down. This revenue will help the system keep going without cuts, especially in the likely recession sometime in the next 5 years. Easy yes.

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes

Measure HH: Soda tax (City of Oakland)

I wrote about the soda tax two years ago (scrolled), when it passed in Berkeley and failed in San Francisco. It is much the same measure – a one cent per ounce tax on sugary soft drinks, so 12 cents more for a can, or $0.68 added for a two-liter bottle. It is another sin tax, so to speak – not so much for the purposes of revenue, although that’s a bonus, as it is to change behavior, reduce sugar consumption.

Nutrition panics over specific foods are often overblown – I call it the nutrition-media-industrial complex, where researchers churn out low-quality studies, with small numbers of participants and designed so that by chance they are likely to find clickbaity, scientifically weak results, like that everything you can eat simultaneously causes and prevents cancer. But the evidence for the harmfulness of soda is much better-quality, comprising many long-term studies following tens of thousands of people for years or decades. These studies found substantial links to weight gain, diabetes, and other major health issues, even controlling for other factors like overall calorie consumption. I don’t know what it is; perhaps the dopamine hit of all the added sugar hitting the body in a way more traditional calorie sources don’t. But there is something about soda in particular.

So why a tax? Because we should have learned at this point that when you want to really achieve change, transparency or awareness is weaksauce; incentives and spending work. We need not voluntary guilt-driven carbon-reduction, but carbon taxes or cap-and-trade. Not just tobacco education and health warnings, but tobacco taxes. Not just mandated maternity leave, but socialized insurance for pay during parents leave. People are busy, bombarded with information; giving them more information and expecting them to work things out tends to do very little, but money makes things happen.

Of course we need to address the intersection of food and health more broadly – overhaul agricultural subsidies and the distribution system so that healthy foods are cheaper and more available, other problematic foods less so, and so forth – but this tax would be a proof of concept showing that pricing is a feasible policy lever. The soda industry is well aware of that and pouring money into this campaign, knowing that what starts in the Bay could be replicated at a higher level.

Is it a “grocery tax”? No; that term blanketing our airwaves was invented by the soda industry, misinforming a few locals to enlist them for ad spots and posters. Theoretically, there is nothing preventing grocers from spreading the cost across all their products, but that would not make economic sense for them and is not in fact what they are doing in Berkeley.

Will it be counteracted by people going to other places to buy their soda? Probably a bit, but not hugely; how much do people actually shop around looking for a 12-cent-per-can price difference? A lot of the consumption being deterred will likely be on the fly in people’s neighborhoods. And extending the tax zone to all of Oakland will make shopping around require much more travel than currently where it only applies in Berkeley. (Still, hopefully it will be extended to more jurisdictions, or statewide, at some point.)

Is it regressive on the low-income? Technically, yes, but like the tobacco tax, in a positive way. Given what we know about diabetes and other health impacts, the health benefit to the low-income will likely be disproportionate to them. Also, all the non-sugary drinks will be unaffected by the tax, so low-income households will be perfectly able to substitute to untaxed drinks and see no financial impact – or a financial gain from switching to water. (Milk products, pure fruit juice, baby formula, medical food, plant milks like soy, etc. are exempt from the tax.)

A bonus is that the revenue from the tax can be flexibly used – no ballot-box budgeting. One of Prop 13’s many antitax provisions was that if you want to dedicate a local tax to a special purpose, something easily advertisable like health or education, you have to reach a higher two-thirds threshold; but you can pass an unearmarked tax with a simple majority. In 2014, SF’s attempted soda tax got 56% yes votes, but failed because it was dedicated to health, nutrition, and activity programs and needed 67%. Berkeley’s was a general tax, but this feature did not keep it from getting passed with 76%. So Measure HH is a general tax, requiring only 50%. There is a commission to recommend how to spend the money, but nonbindingly. This is better for chances of passage and better for governance.

All of the above also applies to this year’s Proposition V in San Francisco and Measure O1 in Albany, both very similar. Let’s try something new and meaningful for once and strike a blow to amoral big business.

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes

Measure LL: Civilian police commission (City)

Oakland, like much of the country, has major problems with its police. Assaults on protesters [Occupy], baffling shootings [Hogg], shameful abuses of power [Guap], and an insular, defensive culture add up to a police service with little confidence from the community. It is partially symptomatic of our deep racial inequities – when certain people are seen as valueless by the rest of society, those society entrusts with weapons will piggyback on those judgments – but I believe a great deal of it is amenable to managerial change: we do not need to wait for racism to end, we can actively reform an institution that does many things for no better reason than that it always has and its insiders are invested in denying this was ever wrong. However, whether out of political calculation or because they truly believe, the mayor and much of the Council tend to acquiesce or participate in OPD’s resistance to change. 

We have an independent civilian review board, but like many other cities’ similar boards, it’s been more and more painfully apparent over time that it has very few teeth in practice; it can investigate complaints and recommend discipline and other measures, but has no power to force OPD to adopt them. The local police accountability advocates, together with allies on the Council, seized on recent scandals to push through reforms in Measure LL.

Measure LL would eliminate the existing Police Review Board and replace it with a Police Commission as well as a Police Review Agency staffing it. It would continue to review complaints, investigate, issue findings, etc., but the new powers given them would be:

• The ability to add or change OPD policy, or reject OPD-initiated policy changes, relating to four areas: use of force, profiling, and First Amendment assemblies, and anything in the current federal settlement agreement. That last covers a lot of ground, but the Commission’s special authority over such policy would only last as long as the settlement agreement does.
• The ability, after investigation, to directly discipline police officers. There is a rigamarole of a process to go through: if the police chief disagrees, the chief has to compile their own findings and alternative proposed discipline, and the Agency can either allow that alternative action to be taken, or bring the dispute to a subcommittee of the Commission, which makes the final decision. Appeals processes like employee arbitration that could later overturn such action remain in force. But currently the police and city administrator have final say, and that would be completely eliminated, in my reading.
• The ability to subpoena all OPD files and records, except that personnel records access is limited to the Agency director, not the rest of the Agency investigators or staff.
• The ability to fire the police chief with a supermajority vote (five of seven commissioners).
• The responsibility to identify candidates for police chief, and produce a list of at least four candidates for the mayor to pick from. The mayor must either choose one they recommend or reject them all and ask for a new list. (Note it’s currently vacant, so the commission could end up immediately choosing the next chief.)

Obviously, giving the commission formal power to override the police and the city administrator only goes part of the way: the subsequent issue is, given that power, will they use it? Who are the commissioners – who are they appointed by, friendly with? So who appoints how many commissioners matters a great deal, and was a major point of contention when this measure was making its way through the City Council. The final negotiated result was to give the mayor three seats to appoint directly, while the other four are effectively appointed by the Council through an intermediate “Selection Panel”. With that balance of power, even if the mayor has only one other ally on the commission, the administration will effectively still be in control; also, due to the supermajority requirement, the decision to fire the police chief must have at least one mayoral supporter.

The other common objection heard is that arbitration over police discipline and termination is left unchanged, unlike in earlier drafts of the measure. I am not so deeply concerned with that fact: although arbitration has created strange, barely-supportable outcomes in the case of the OPD, it makes sense as a generic labor protection. It appears that the real problem with arbitration is that city and police administration do not press their side with any vigor, which is not something any commission would have fine-grained control over.

How problematic is it that the entire deal was negotiated downward (as with areas like personnel records access) until the police dropped their objections and allowed it to go onto the ballot with no opposing arguments? In the end, it highlights the tension between trying to make change by tinkering with institutional structures and trying to make change by pressing directly for the right things to be done, no matter the structure. No matter how formally strong the commission and agency are made, true reform cannot be imposed if the day-to-day leaders ar kicking and screaming against it. It comes down to what values all the relevant actors have, including mayor, council, and police leadership – or alternatively, what values noisy citizens and the press, plus voters, force them to live up to. Everyone in City Hall and OPD HQ needs to continually get the clear message that the privilege of using force comes with a huge burden of justification, and police must be part of the community rather than an occupying force. Neither institutional tinkering nor system-agnostic advocacy can do this all on its own; both methods must coexist. In this particular case, a decent civilian oversight structure can help facilitate the needed change, as well as send a message on its own.

The fact remains that Measure LL is a major step forward, a more powerful oversight body than almost any US city has now. Check out Campaign Zero for constructive, thoughtful proposals on what is needed in full, at multiple levels of government, to bring police shootings to zero. And as a partial measure, vote yes on LL.

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes

Measure JJ: Rental protections (City)

Back to housing and the great affordability gap. 

Economists assail rent control as a means of ensuring affordability, but I see it as a helpful, if inferior, step in the absence of a sufficient housing stock. It certainly helps people of higher incomes who may not strictly need the help (including myself, for full discloure); but that is a tradeoff for helping a wide swath of the community across the board, rather than the handful of people targeted by means-tested programs, or who luck into the small number of affordable housing set-asides. I would be open to loosening rent control on market-based grounds if we had a clear way forward to building the entirety of the supply gap [LAO link]; I’m not sure how that will happen, although Measures A1 and KK are important to pass. I see landlords making windfall profits only because of the heated economy they had little to do with – Oakland rents increased __% in the past 3 years – and think it is reasonable to put a lid on this. 

Measure JJ does not extend rent control per se, but tightens up some of its provisions and awards more rights to non-rent-controlled tenants. The Costa Hawkins Act of 1995 greatly limited how much California cities could control rent: most importantly, it forestalls any rent control on buildings constructed after 1983. Oakland can do nothing about that except advocate for Costa Hawkins reform. An additional protection Oakland has imposed is requiring just cause for evictions, but only for buildings constructed before 1980: Measure JJ would push that to 1995. People’s livelihoods depend heavily on reliable housing, without landlords looking to clean up through finding the next, richer, tenant; eviction is a move potentially harmful enough to not be worth leaving to the market.  

Existing rent control in Oakland limits increases to the rate of inflation, but allows increases beyond that if it is to pay for improvements made. (Landlords must absorb part of that cost, but can pass 50% on in rent.) The other important change in JJ is that it requires prior approval for such additional increases over CPI. This makes sense to me. I have a surprisingly good landlord; he made small reasonable improvements a couple of years ago and provided a letter walking through how they were reflected in my rent. But even though I think those are likely reasonable given what I know of the landlord, I don’t have full knowledge that those costs were true and correct as stated, or if there were underlying shenanigans; if I wanted to find out, I would have to complain and launch a lengthy and possibly risky process through the rent board. It makes sense for the city to act as a clearinghouse for these changes, as it has the ability to categorize and compare and identify which might be unreasonable. I could imagine some inefficiency in the process; everything is imperfect, but in this case let the risks of inefficiency fall on landlords rather than tenants! They are much better equipped to press their cases and lobby for, for example, more funding for the rent board to do its job more efficiently, if needed.

Details: JJ continues to exempt owner occupied housing with up to 3 units (duplexes/triplexes). It does not pose anticlutter concerns because it is amending a prior ballot measure (Measure EE, 2002, which imposed just cause for evictions) and therefore unfortunately must take up ballot space.

We need to build a prodigious amount of housing, which will likely tread on many people’s toes, and also reform Costa Hawkins. In the meantime, yes on JJ to forestall displacement and keep Oakland from becoming even less livable.

A final thought: given how utterly private development has failed to keep in touch with the low- to middle-income market, I think we should give serious thought to reviving public housing. Hong Kong and Singapore, which both have high-performing economies and extremely limited space, have ensured affordability by having the majority of their population housed publicly, and letting the private market cater to the rich only.

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes

Measure KK: Infrastructure bonds (City)

Measure KK lets the city borrow $600 million for critical infrastructure improvements – mostly streets and sidewalks, but also facilities and affordable housing.

We all know viscerally that the quality of Oakland’s streets and other infrastructure is subpar; again, the product of longterm disinvestment. This is exactly the kind of infrastructure where, if you’re going to do anything more than tread water, you need a lot of money up front via borrowing. Everyone is also aware of a level of inefficiency in Oakland city government specifically; this needs change, but again, is not a reason to continue to starve the city – which is to say, ourselves – of desperately needed work.

Details of spending: $350 million, the largest part, is to be used for streets, sidewalks, bike lanes, etc. There is no specific allocation between improvements for drivers, bicyclists, and pedestrians; this flexibility makes sense. $150 million for facilities, of which half is to police and fire stations, the remainder to libraries, parks, water, etc. $100m for affordable housing, focusing on immediate displacement prevention, whether by newly constructing, renovating, or otherwise preserving affordable projects. 

The $100m for affordable housing will likely go even farther than it sounds, because the larger pool of money raised by the county measure A1 often requires a local (city) match, which this could help provide. Unfortunately, there is no mention in KK specifically of supportive housing for the homeless – “affordable” typically means for people with low to middle incomes, and may require more rent than is reasonable to get homeless people properly housed. This contrasts with A1 which does make some supportive housing. But there is probably still flexibility in the language for the city to interpret “affordable” in that way if it so chooses.  

This is the largest of the property tax increases on the Oakland ballot: at a maximum of $79 per $100,000 assessed value, which would be reached within several years, our median homeowner would see an increase of around $400 per year. This seems worth it to me as it is part of the needed investment to actually make living in Oakland worthwhile. (Think of how much wear and tear cars sustain from our level of potholes, for example; or the amount of money people will be able to save by making bicycling more of a safe commuting option.)

One bit of misinformation I wanted to combat is that the official opposition argument says that the funding buckets are meaningless as after 10 years the council can reallocate unused funds elsewhere. I’m surprised the supporters didn’t get a judge to change this language on the ballot, because it’s quite clearly wrong: the legislative text says that no more than 10% of any funding pool may be reallocated to another funding pool, and not to non-designated purposes. So for example, of the $350m for streets, no more than $35m could actually end up going to facilities or housing. This is eminently reasonable, just flexibility at the margin as needs and available projects may change for one reason or another.

Utilitarian recommendation: Yes
Anti-clutter recommendation: Yes 

Measure G1: School parcel tax (OUSD)

Measure G1 raises another $120 per parcel of land per year to further support the Oakland schools. The majority goes to an across-the-board salary increase, reflecting that despite the additional revenue currently coming in due to the economic boom, salaries are still far behind what is reasonable given local cost of living (starting at __ for new teachers). The remainder goes to middle schools in particular, both public and charter: I am not sure why they merit singling out and suspect some kind of behind-the-scenes deal.

Regardless, G1 is worth supporting. [Expenditures per student]

Again, as a parcel tax, it is mildly regressive, but it is a benefit that accrues to everyone in the community, and the district’s legal ability to raise money in more progressive ways is limited, so that is worth it. Also, it will stay a relatively stable source of revenue even if we fall into a recession in coming years. There are means to exempt low-income homeowners from the tax.

Utilitarian recommendation:
Anti-clutter recommendation: