OAKLAND — Faced with a crushing financial deficit totaling $265 million over the next two years, Oakland’s interim mayor proposed a budget Monday that includes dozens of layoffs and the freezing of hundreds of other positions.
But the two-year budget spares the city’s police and fire departments from further staffing cuts.
Councilmember Kevin Jenkins — serving as the city’s acting leader before Mayor-elect Barbara Lee is sworn in later this month — laid out what he called a “pathway to financial stability” aimed at beginning the long, arduous process of reshaping the city’s checkbook from its usual pattern of stinging annual deficits. He did so in a seven-page budget summary ahead of the full budget’s formal release, which was expected at a yet-to-be-announced hour Monday evening.
Jenkins’ proposal includes cutting 80 jobs that are currently staffed, though city officials on Monday expressed optimism they could shuffle all but less than a dozen of those people to similar, now-vacant positions with the city. In addition, more than 325 vacancies will remain unfilled.
City officials on Monday did not describe which departments would be impacted by the job cuts.
Calling public safety the city’s “top responsibility,” Jenkins proposed funding 678 sworn police officers for both upcoming fiscal years. He also proposed funding six police academies over the next two years, along with two firefighter academies.
Jenkins also wants to drop the number of fire station closures from three to two, and have those two closures rotate throughout the city. For example, the two fire stations in the Oakland hills that were recently closed for budgetary reasons will likely reopen over the summer fire season, while others facing lower call volumes will temporarily shut down, city officials said.
Jenkins stressed that four more fire stations would have closed had voters not recently approved Measure A, a sales tax increase which is expected to add $20 million to the city’s budget next year and $30 million the following year.
“We are working very diligently to restore public safety in the city,” Jenkins said at a press conference Monday afternoon. “You see from the election that recently happened that residents are demanding that they want to feel safe in the city that they love.”
The budget proposal now heads to the City Council, which is expected to haggle over amendments and changes ahead of a June 30 deadline for passage. City staff also must hold public budget meetings in each council district for residents to offer their input.
The budget — which calls for $2.1 billion in spending from July 1 through June 30, 2026, and another $2.2 billion the following fiscal year — is largely contingent on federal funding remaining steady, even as President Donald Trump vows to gut federal spending in the coming years.
It also assumes the passage of a yet-to-be-drafted ballot measure in June 2026, which could bring in another $40 million in tax revenue for “ongoing public safety resources,” according to the budget overview released Monday. That tax revenue — if put on the ballot and passed — would pay for services and staff currently on the city’s payroll, city officials said.
Oakland Mayoral candidate Barbara Lee, right, greets supporters after her speech during a special Election Day watch party in Oakland, Calif., on Tuesday, April 15, 2025. The following Oakland mayor will replace former mayor Sheng Thao, who was recalled last Nov.. (Ray Chavez/Bay Area News Group)The proposal comes at a turbulent time for Oakland as the city grapples with a perilous budget crisis and an ongoing leadership void.
Oakland leaders have warned the city faces a $265 million budget shortfall over the next two fiscal years, amid lagging revenues from taxes on real-estate transfers and business licenses, along with rising overtime costs for the city’s police and fire departments. That deficit includes a $138 million shortfall during the next fiscal year — which runs from July 1 through June 30, 2026 — and a $127 million shortfall the following fiscal year.
Already this year, the city has laid off 42 employees and demoted 34 others to rectify a deep budget shortfall in its current fiscal year. Other steps to balance the current fiscal year budget have included temporarily closing two fire stations, cancelling all police-training academies and slashing $2.6 million in funding for outside nonprofits and a host of other grants and citywide programs.
In the process, several agencies — among them Moody’s, Fitch and S&P — have lowered Oakland’s bond rating, making it more expensive for the city to borrow money for infrastructure projects. That could complicate plans outlined Monday by Jenkins to buy $180 million in bonds for affordable housing projects over the next two years, along with $50 million in bonds for street paving projects.
Oakland isn’t the only municipality in the Bay Area to struggle financially. San Francisco faces a $876 million shortfall over that same two-year time period, while the city of San Jose is grappling with a $60 million shortfall in the coming fiscal year.
Unique to Oakland, however, is a run of deep political upheaval within the mayor’s office. In November 2022, voters recalled the city’s former mayor, Sheng Thao, barely two years into her first term. About two months later, a federal grand jury indicted Thao — along with her romantic partner and the father-and-son duo running the city’s recycling contractor — on federal bribery charges tied to an alleged pay-to-pay bribery scheme.
Since the recall election, two councilmembers have served as interim mayors, including Jenkins, who authored the budget released Monday. The city’s fourth mayor in seven months — Lee — is expected to be sworn into office later this month with the goal of serving out the remainder of Thao’s original four-year term.
The budget’s rollout was, itself, a rocky process. Jenkins last week delayed its release by four days, citing “a period of transition following the recent election.” The announcement came two weeks after Finance Director Erin Roseman submitted her letter of resignation amid growing scrutiny over her handling of the city’s coffers.
Also missing recently has been any hint of the city’s latest five-year financial forecast, which is typically released in the weeks ahead of the mayor’s two-year budget proposal. City officials expect that document to be released by the end of the month.
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