City Council’s 6.4% Rate Hike and New Parcel Taxes Drive Big Bills

Berkeley homeowners are opening their new property assessment — and many are surprised to see historically high increases.

One Nextdoor thread details 10% to 25%. increases and resulting questions about what’s behind these big jumps. Why are some people’s increases so much higher than others? Over the next few weeks, WOM Berkeley will break down the reasons for these differences. For now, here’s what we know.


What’s Causing the Increase?

The main reason is parcel taxes — charges based on the size (square footage) of your home.

Here’s what’s new:

  • New taxes: Measure FF (Street Repair) and Measure X (Library), and an increase in Parks rate (Measure Y).

  • City Council increase: They voted to raise many existing parcel taxes by 6.4%.

  • School funding: Berkeley Schools also raised their rate.

Together, these changes created one of the biggest overall tax increases in years. The graphic below illustrates the unprecedented nature of the 2025 increase.

This graph illustrates how parcel taxes and assessments cost are the driver of this year's increase.


Could the Increase Have Been Smaller?

Yes.

When drafting parcel tax measures, Council gives itself the discretion to increase the rate every year based on economic indicators. We've been in touch with the Finance Department and they have explained the 6.4% is based on choosing to use personal income growth (PIG) in Berkeley as opposed to the Consumer Price Index (CPI) — the standard inflation measure.

Using the CPI would have meant about a 2.5% increase, closer to what’s been done in past years. See for yourself, according to additional data provided by the Finance Department, 2025’s increase is among the highest on record. We have compiled historic data here.*

Still, it shouldn’t take this much effort to understand your tax bill. The City should create a public dashboard showing every tax assessment and annual rate change — so residents can see exactly where their money goes.


Why Did Council Approve a 6.4% Increase?

That’s unclear.

The decision was made without public input, in June on the Consent Calendar — a procedure meant for routine, non-controversial items like meeting minutes or small contract renewals.

But this City Council often uses the Consent Calendar to pass major, multi-million-dollar changes with no debate. That’s a troubling trend that should be stopped.


Did Council Recognize the Magnitude of the Increase?

It was not discussed.

When we asked, one City Council office said the increase was “ministerial,” meaning it was automatic — something voters had already approved.

That’s only partly true.

Voters approved one specific increase — Measure Y (Parks and Landscaping) — but all other parcel tax increases were up to the Council’s discretion. Each recently passed parcel tax lets Council decide whether or not to raise the rate every year.

This confusion suggests that Council may not fully understand its own tax policy. WOM Berkeley believes there should be a public hearing every year to review all tax increases and the financial implications for residents.

Our Recommendations:

  • Create a dashboard that includes current and historic assessments for each measure (We have discussed the importance of information transparency).

  • Review the cumulative impact of all assessment changes at public hearing of City Council.

  • By extension, Council should vote on the package of changes as an “action item” with public input. 

  • Stop using the  Consent Calendar to pass major, multi-million-dollar changes.



* Note, WOM Berkeley obtained this information from the City of Berkeley.  We identified some incorrect figures in the original data which we have corrected. We believe this information is now accurate; however, we have been unable to verify some outlier figures. 



WOM Berkeley spends an inordinate amount of time trying to access and verify public information that is not readily available through the city’s website. Fundamentally, we believe the City of Berkeley should maintain a dashboard for all tax assessments with current and historical rates available to all in a manner comparable to what we are providing here.


Counting the Cost: A Berkeley Business Owner on the 2025 Property Tax Hike

The property tax on my business (808 Gilman St. LLC) will go up 13.1% in just this year, largely due to three property tax measures which all concurrently passed.  Measure FF (a new tax which is 0.25/sf for businesses, crafted as a voter initiative requiring only a simple majority) was especially impactful on my business - an old 10,000sf warehouse converted into class C office and lab space.  Along with the 0.09/sf increase from Measure X, and 0.043/sf increase from Measure Y, these will collectively result in an aggregate property tax rate of 4% of my property's assessed valuation (the building was purchased in 2012). 

The "needs" behind the measures all appear worthy, but instead of constantly seeking new taxes at every election, the City really needs to reduce unnecessary projects elsewhere, execute projects far more efficiently, better contain overtime usage, and negotiate increased employee pension contribution portions for new hires (see 2023 compensation data.  A city of only 124,000 should not require a morbidly obese budget of $750MM per year ( see summary on Page 10).

One truly worries about Berkeley's future when it seems to have an increasing number of empty storefronts

One truly worries about Berkeley's future when it seems to have an increasing number of empty storefronts, especially in the western portion, and when the two largest West Berkeley R&D campuses are mostly empty, and put on hold, respectively.  I, and other small business people I talk to, believe  that as a developer or business evaluates purchasing a site or building in Berkeley, they come to realize that the aggregate annual property tax and other business taxes are collectively higher than anywhere nearby, and will be a significant drain on their operations.  They further see that they will lose at least 3.5% of the equity when they eventually sell it, due to Berkeley's unusually high RETT (increased to 3.5% by Measure W of this past election).  The city's other numerous and heavy  business taxes (e.g. large gross receipts taxes regardless of whether the business is even profitable, and  a 7.5% Berkeley utility tax - even on clean electricity) will further burden their business.

Business owners come to realize that the aggregate annual property tax and other business taxes are collectively higher than anywhere nearby

With a history of multiple new heavy taxes on every single Berkeley ballot, and virtually no sunsetting ever, and with many taxes (like FF) auto-increasing with inflation, savvy developers and business owners will do the fairly simple math and simply steer clear of Berkeley, as appears to be happening, at least from where I sit here in West Berkeley.

Berkeley has great potential, thanks to its progressive and intellectual culture and what is one of the  best universities in the world, but at some point the viability of a location goes beyond ideologies, and is brutally governed by basic economics.

Is there something we can collectively do, well before the next election, to stem this unrelenting and damaging trend?   

Best regards,

Joel Libove

P.S. Despite measure FF (Sidewalk and Street Repairs Parcel Tax) having passed, I received a letter from the City of Berkeley demanding that I fix the City sidewalk near my building that was damaged by a city tree root.

WOMBerkely welcomes your experience either in our comments or through correspondence at WOMBerk22@gmail.com

Property Taxes Jump 10 to 14% – Newsom Vetoes Transparency Rollback Bill

 

Property Tax Bills Bring Sticker Shock

If you haven’t opened your property tax bill yet, prepare for a surprise.

Readers are reporting their residential assessments are up 10 to 12%, while local businesses are faced with increases as high as 14%. This difference reflects City Council's tendency to up charge commercial properties in parcel tax measures as they did for the recently passed Measure FF.

You can view your property tax bill online.

Part of the increase reflects new parcel taxes approved by voters in 2024 — including the Library Tax (Measure X), Sidewalk and Street Repairs Tax (Measure FF), and an additional 16% hike in the Parks, Trees, and Landscaping tax (Measure Y). On top of that, the City Council quietly passed three parcel tax increases exceeding 6% each, all appearing on the Consent Calendar at City Council on June 24th with no discussion.

The Consent Calendar is meant for routine, non-controversial items that can be approved with a single vote and little or no discussion — such as approving meeting minutes, accepting standard reports, confirming committee appointments, or renewing ordinary contracts.

It is deeply troubling and, frankly, disrespectful to the public process when actions with such far-reaching consequences — in this example parcel tax increases involving tens of millions of dollars — are bundled into the Consent Calendar and approved without any discussion or deliberation.

We are currently speaking with both business owners and residents on fixed incomes to understand how these increases are impacting them. Stay tuned for further assessment and recommendations in our upcoming posts.


A Victory for Ballot Transparency: Governor Newsom Vetoes AB 699

In August, we reported on Assembly Bill 699, which would have removed key financial details—including the estimated tax rate, duration, and annual revenue—from the ballot labels of local bond and parcel tax measures.

Despite widespread public concern (see comments in previous report), Assemblymember Buffy Wicks and Senator Jesse ArreguĂ­n voted in favor of the bill.

Fortunately, on October 1, Governor Gavin Newsom vetoed AB 699, citing that it would “reduce transparency for local tax and bond measures.”

His veto preserves voters’ ability to see essential financial information directly on the ballot — a critical safeguard for fiscal transparency and informed decision-making. We commend the Governor for this veto.


Berkeley’s Budget Strain: When High Staffing Levels Become a Structural Problem

 

We’ve just updated our report, Fiscal Imbalance: Analyzing Berkeley’s Budget Deficit, with the information below, see page 5. The findings underscore a growing challenge for our city: Berkeley employs significantly more staff per resident than any of our East Bay neighbors. In fact, Berkeley has one employee for every 46 residents.

While staffing levels may reflect Berkeley’s strong commitment to local services, they also reveal a structural cost problem—one that helps explain the city’s persistent budget deficit.


Employees Per 1,000 Residents – East Bay Comparison

City

Employees per 

1,000 Residents

Berkeley

21.4

Alameda

15.1

El Cerrito

14.9

Oakland

14.5

Walnut Creek

13.0

Albany

8.5

Source: California State Controller https://publicpay.ca.gov/Reports/Cities/Cities.aspx


Why This Matters

·       Personnel costs dominate Berkeley’s spending. Roughly 54% of total expenditures—and a striking 68% of the General Fund—go toward salaries and benefits.

·       High staffing levels magnify cost pressures. Even modest increases in wages, pension contributions, or healthcare premiums compound quickly across such a large workforce.

·       Fixed labor costs limit flexibility. Unlike project-based expenses, personnel costs recur every year and are difficult to reduce without layoffs or cuts to city services.


The Bigger Picture

These numbers highlight a structural issue rather than a short-term budget hiccup. When so much of the city’s operating budget is tied up in personnel, even small cost escalations can push the city further into deficit. 

Addressing this imbalance doesn’t mean cutting essential services—it means aligning staffing levels, compensation growth, and service priorities to ensure that Berkeley’s fiscal health is sustainable for the long term.