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, and the findings underscore a growing challenge for our city: Berkeley employs significantly more staff per resident than any of our East Bay neighbors.

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.

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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

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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.

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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.