Berkeley Proposes "Bonds Forever," While the Legislature Tries To Conceal Their Costs

In a previous post, we highlighted the national conversation about the perceived dysfunction of government in many blue cities and states. The challenge for these jurisdictions is clear: demonstrate that progressive governance can deliver public services efficiently—on time, on budget, and cost-effectively.

We're therefore disappointed to learn of  two recent policy developments in the City of  Berkeley and the State of California which are headed in the wrong direction.

First in Berkeley, the Budget and Finance Committee has proposed what we will refer to as a “Bonds Forever” policy. Council has asked the City Manager to draft a comprehensive fiscal policy that institutionalizes a regular, predictable schedule for issuing general obligation bonds. The Committee has pointed to the failed Measure L from 2022 as a model for this approach.

As we detailed in a recent report, Measure L would have authorized $650 million in new borrowing. The cost to repay that debt would have exceeded $1.2 billion over 48 years—effectively passing today’s financial burdens onto future generations. Beyond the staggering repayment cost, the bond would have been funded through a property tax based on assessed value (see Alameda County Parcel Viewer). As a result, two households living in nearly identical homes on the same street could be taxed at dramatically different levels, with one paying up to ten times more than the other. We’ll explore the inequities of assessed value-based bond financing in a future post.

The Council states that this proposal will create “predictable financial planning horizons” to address the city’s infrastructure backlog. However, this reasoning prioritizes borrowing while the structural causes of our ongoing budget deficits persist. Absent a stable and sustainable fiscal environment, taking on additional debt is premature. 

Compounding this issue, the California State Legislature is backing a proposal to remove cost disclosures from ballot summaries. In other words, voters could be asked to approve large-scale borrowing, without being informed of the financial implications in the summary language on their ballots.

CalMatters reports

 

[Historically] the bill’s sponsors wanted to revive the old practice of using the 75-word summary to extol the virtues of proposed tax and bond measures, discarding the requirement that it be a “true and impartial synopsis.”

 

The new bill is sponsored by advocates of low-income housing who believe that housing bonds would be easier to pass if their property tax increases were less evident, but the effects of AB 699’s enactment would apply to all bond issues, not just those for housing.

At a time when we desperately need leadership that engages the public with practical, forward-thinking strategies to build a sustainable, equitable, and resilient financial future, our elected local and state officials appear to be doubling down on issuing debt, while obscuring the cost. Unfortunately, this only reinforces the growing narrative of dysfunction in progressive governance.

Contact Assembly Member Wicks:

assemblymember.wicks@assembly.ca.gov

Dear Assemblymember Wicks,

As one of your constituents, I was deeply disappointed by your “Yes” vote on AB 699 (Local Measure Tax Rate Disclosure).

The current law strikes a reasonable balance, by ensuring voters receive impartial information about the costs and benefits of proposed local tax measures. By deliberately concealing the true cost of these measures from voters, AB 699 undermines that transparency.

As an elected official who publicly champions transparency, your support for this bill is both troubling and inconsistent with the values you claim to uphold.  As Dan Borenstein of the Mercury News points out, it is not difficult to explain the costs and benefits to voters.  An example he cites is a Fremont bond measure for schools.

 


Fixing Berkeley's “Structural” Budget Deficit Starts with Transparency

By Paul Mathew, Geoff Lomax, Isabelle Gaston, Josh Glatt, Steve Kromer 


During the recent budget deliberations, the Mayor and Council reiterated the need to address the city’s “structural deficit.” We believe the new City Council and Mayor are committed problem solvers, and we would like to support their efforts to address this challenge. Moreover, as our report emphasizes, fiscal stewardship in municipal governance is the foundation upon which sustainable growth, public trust, and long-term civic stability are built.


After engaging with public officials for over a decade, we can attest that Berkeley’s budget transparency is woefully inadequate, particularly when compared to similarly-sized California cities, such as Pasadena, that provide a much clearer understanding of their budget.


Berkeley residents and taxpayers should be able to quickly and easily find  basic information about the city budget, such as:

  • Itemized reports of dollars spent on city services, including vendor names, dollar amounts, and funding sources. (The City of Pasadena provides this information in downloadable files.)

  • Revenue sources in sufficient detail to understand the impact of state and federal actions that can affect the city’s finances.

  • Services delivered per unit of spending. e.g. $/shelter bed; $/mile for street paving, etc.   

  • Benchmarks for the above metrics against comparably sized California cities, and where appropriate, against non-governmental organizations.


Too often, requests for such information are met with evasive answers: ‘hard to say’; ‘it depends’; ‘it’s complex’; ‘it’s a social justice issue.’ We cannot make good decisions and properly evaluate trade-offs under veils of obfuscation or piety. Yes, some budget questions are genuinely complex. But even in such cases, the city should be able to provide top-line numbers understandable to any Berkeley High School graduate, with appropriate caveats and footnotes, if needed.   


We especially need a clear understanding of marginal costs and benefits. For example, consider libraries. What’s the cost of each additional hour or day of library open hours?  Yes, we all care about libraries and want to maximize their availability and use. But in a budget crisis, library patrons could do their part and take the effort to access services within a more limited time window. That would provide cost savings with only minor inconvenience.


In a similar vein, our report notes that spending by the Mayor and City Council offices has ballooned in recent years and is projected to increase by 140% over four years. What are the marginal benefits of additional staff? Could those funds be better used elsewhere, or even eliminated entirely to help reduce the deficit? 


In addition, we need to define success using measurable outcomes and not just good intentions. At a time when there is a national conversation about the reputed dysfunction of government in blue cities and states, let’s show that progressive cities really can deliver, by providing government services cost-effectively, on schedule and on budget. That would be the best way for us to advance progressive values.  




Within Our Means Berkeley Renews Its Commitment to the City's Sustainable Financial Future



 


In 2025, the City of Berkeley stands at a critical and unprecedented financial crossroads. We continue to face a persistent structural budget deficit where ongoing expenditures are outpacing revenues. Additionally, recent federal actions all but guarantee further strain on California's finances, with cuts to health, education, housing, and social safety net programs.

The Mayor and City Council have expressed a commitment to finding sustainable solutions to address the persistent imbalance of expenditures and revenues. As residents dedicated to Berkeley’s social and economic well-being, we applaud their commitment. However, we firmly believe a clear, long-term strategy of policy changes is essential. Without it, the city risks compromising its ability to meet core priorities and maintain the quality of life residents expect.

Within Our Means Berkeley is renewing its commitment to supporting this effort. We believe the Mayor and Council are sincere in their desire to chart a sustainable path forward. However, given current fiscal realities, that path will need to diverge from previous approaches.

In the months ahead, we will offer concrete, constructive solutions to help guide this process. As a starting point, we present our report: Fiscal Imbalance: Analyzing Berkeley’s Budget Deficit.

This report provides insights into some of the structural factors contributing to the current fiscal imbalance. Going forward, we will explore and propose specific strategies that can help Berkeley achieve a more sustainable financial future.