Arguments In Opposition to Ballot Measures

The  WOM Berkeley Team worked in collaboration with various Berkeley watchdog groups and civic-minded residents to submit arguments in opposition to the (1) Sales Tax Increase, (2) the Bank-Tax and (3) the Infrastructure Bond. We thank all who provided cogent comments and recommendations.

Argument Against the Sales Tax Measure (Berkeley Measure V)

A NO vote is not a vote against police, firefighters, parks, libraries, or other essential city services. It is a vote for accountability.

Berkeley residents have repeatedly supported taxes to fund important public services,  including significant increases in 2024. Before asking taxpayers to pay even more, City Council should demonstrate that it is managing existing revenues responsibly and prioritizing basic city services.

Regressive Taxation

This measure would permanently increase Berkeley's sales tax from 10.25% to 10.75%, regressive taxation that falls hardest on students, low-income households, seniors, and working families. The regional transportation sales tax would further hike this rate to 11.25%, one of the country’s highest, imitating Alabama and Louisiana. During an affordability crisis, Berkeley should not target the most economically vulnerable. And higher local sales taxes would further depress Berkeley's neighborhood businesses.

Consumer Hardship Without Spending Reform

Supporters say this tax will help fund police, fire, and other essential services. However, the ordinance deposits the revenue into the City's General Fund, where it is available for any purpose rather than being legally dedicated to those specific services. Berkeley projects a $29.5 million structural deficit by Fiscal Year 2028, underscoring the need for long-term fiscal reform and responsible budgeting.

The proposed sales tax would generate approximately $10 million per year, but Berkeley's expenditures are projected to continue growing faster than that new revenue. Unless the City addresses the underlying drivers of its structural deficit, today's regressive tax increase will not solve tomorrow's budget problem.

Berkeley deserves excellent public services and responsible financial management. Before asking taxpayers to approve another regressive tax that remains in effect unless repealed or amended by the voters, City Council should demonstrate disciplined budgeting, prudent spending, and accountability for the dollars it already receives.

Vote NO.

Argument Against the Public Bank Parcel Tax (Berkeley Measure Z)

For nearly a decade, proponents sought to capitalize a regional bank through shared contributions from Oakland, Berkeley, Richmond, and Alameda County. The proposed cost was approximately $40 million, with Berkeley contributing about $2.5 million. That shared financing model never materialized. Now Berkeley homes and businesses are being asked to cover 100%+ of the costs, $58.3 million for an experimental bank that may never receive regulatory authorization to operate.

Berkeley Pays, Everyone Benefits

Yet, proponents still promise to finance projects throughout the East Bay, including Oakland and Richmond, with no guarantee that Berkeley will receive benefits proportional to its financial contribution, nor does it require other jurisdictions to contribute before Berkeley taxpayers do. This measure requires Berkeley property taxpayers to subsidize other jurisdictions. 

Berkeley already faces a $30 million structural deficit. Before imposing another parcel tax, voters should ask whether Berkeley should finance projects in cities that are not contributing, or whether new tax revenues should address Berkeley's fiscal crisis.

No Taxpayer Protection

The measure creates unique taxpayer risks not present in traditional parcel taxes. It mandates automatic annual tax increases based on the greater of inflation or California personal income growth. Every other city parcel tax authorizes City Council to suspend, reduce, or modify these increases if they become unnecessary or financially burdensome. Nor does the measure provide a mechanism to reduce the tax if capitalization is achieved. Tax increases are automatic; benefits are not.

Berkeley deserves policies that provide clear local benefits, equitable regional cost sharing, meaningful oversight, and strong taxpayer protections.

Protect Berkeley residents and businesses. Local taxes should deliver local benefits, and have City Council controls.

Vote NO.

Argument Against Infrastructure Bond (Berkeley Measure U)

Measure 1 borrows $300 million with no comprehensive capital plan, no binding commitment to specific projects, and no budget for maintaining new facilities. Higher interest rates make the total costs $550-600 million. High inflation and competing spending priorities, with no blueprint for success, risks taking on enormous debt without addressing Berkeley’s most pressing infrastructure needs.

Borrowing makes sense when it finances high-priority capital projects that serve residents for decades. Council identified 35 potential projects to fund with bond revenues, but did not prioritize or legally commit to any of them. 

This list could change any time and all 35 projects are unlikely to be funded – it’s a $300 million blank check. Berkeley's procurement guidelines have allowed projects to double in cost. Bond Measure T1 (2016) projects cost about 15% more than originally budgeted.

Bonds should finance long-lived capital assets. This measure mixes in operating costs and routine maintenance that should be funded through special or General Fund recurring revenue. Examples include:

• $14 million for sidewalk repairs, even though voters approved Measure FF in 2024 to fix Berkeley's sidewalk and pathway backlog. 

• $6.7 million for seismic improvements to the Old City Hall, despite needing more than $100 million in repairs.

• $25 million for King Pool, despite longstanding concerns about the unequal distribution of recreational facilities between North and South Berkeley.

Berkeley residents devoted countless volunteer hours through 2025 to develop Vision 2050, a thoughtful comprehensive long-term strategy for the City's capital needs. Yet its recommendations have not been implemented or meaningfully incorporated into Measure 1.

Before asking taxpayers to commit up to $550-600 million, the City should establish clear priorities, make binding commitments to bonafide capital projects, and present a credible plan for maintaining new facilities.

Berkeley can do better. Vote NO.

A Tale of Two Parcel Taxes: Comparing Local Benefits, Oversight, and Accountability

This November, Berkeley voters will be asked to consider two new parcel tax measures: (1) the Arts Tax and (2) the Bank Tax. Both measures would impose a new parcel tax on homes and businesses. However, they differ significantly on where funds are used, how tax rates are determined, and whether Berkeley can provide program oversight.
Our comparison is not an endorsement of either policy objective. Rather, it examines how Berkeley residents and businesses asked to fund tax measures can have the expectation of clear local benefits, predictable tax obligations, and meaningful accountability.

Local Benefits: Guaranteed vs. None Required

Perhaps the most important distinction between the two measures is where the money can go. The Arts Tax measure establishes a dedicated grant program restricted to funding  activities within the City of Berkeley. Revenue is dedicated to Berkeley nonprofit arts organizations, Berkeley-based events, artists, and arts and cultural facilities.

By contrast, the Bank Tax is intended to capitalize a regional lending institution. If the bank ever receives regulatory approval to operate, proponents propose to finance projects throughout the East Bay, including Oakland and Richmond. The ordinance contains no minimum requirement that Berkeley receive benefits proportional to its financial contribution.

That distinction raises an important policy question: Should Berkeley homes and businesses ever be asked to authorize new parcel taxes without a guarantee that Berkeley will receive a proportional share of the benefits?

Future Tax Increases: None vs. Inflation-Based

The second major difference concerns what taxpayers can expect over time. The Arts Tax establishes a fixed parcel tax rate of 7 cents per square foot for the duration of the measure. Homes and businesses know exactly what the rate will be each year unless voters approve a future change.

The Bank Tax begins at 6-9 cents per square foot, but the ordinance requires  automatic annual increases based on inflation or cost of living, whichever is HIGHER. Unlike existing parcel tax measures, the Berkeley City Council has no discretion to make needs-based adjustments. During periods of elevated inflation, annual adjustments could approach 10% depending on the applicable inflation or income index.

Local Oversight: Berkeley Oversight vs. Limited Oversight

The third difference involves governance and accountability. The Arts Tax establishes a detailed local oversight structure. The ordinance assigns responsibilities to Berkeley's Civic Arts Commission, requires public grant review, annual financial reports and audits, and provides for City Council oversight through implementing regulations.

The bank proposal is structured differently. Rather than creating a city administered program, it would provide capital to a proposed bank whose lending activities would occur through the bank's governance once established. The ordinance provides comparatively little detail regarding how lending priorities would be established, how Berkeley would influence those priorities, or what ongoing oversight Berkeley officials would have over lending decisions. Effectively, it is a $58 million blank check for a yet to be created organization.

Ultimately, the two measures reflect very different models of accountability. The Arts Tax is centered on ongoing local Berkeley oversight while the Bank tax is not.  The Bank Tax is centered on a regional financial institution operating under its own governance if it is ever established.

Understanding The Berkeley Bank Tax (Berkeley’s Public Bank Ordinance): What Voters Should Know

Berkeley voters are being asked to approve a new bank tax on homes and businesses. The full text of the measure is here. The tax is intended to "capitalize and support” a new bank authorized to make loans throughout the East Bay and Alameda County.

The tax raises important policy questions that deserve careful consideration. This report summarizes bank tax features and issues voters may wish to consider.

A New Tax on Every Berkeley Home and Business

The measure establishes a new annual parcel tax on every square foot of residential and commercial property in Berkeley. Commercial tax rates are 33% higher than residential. The tax is intended to cover the bank’s start up costs. A study commissioned by the City of Berkeley suggests $40 million in taxpayer funding is needed to launch the new bank.

No Required Berkeley Benefit

Berkeley taxpayers are being asked to provide 100% of the bank’s operating capital, but there is no required minimum return or allocation for Berkeley. The managers intend to fund projects anywhere in the East Bay including Oakland, Richmond and Emeryville. At a time when Berkeley is facing a $30 M deficit, important policy questions are whether (1) residents and businesses should be asked to finance projects on behalf of other cities that are not contributing and (2) any new Berkeley parcel tax revenues should address the city's own pressing needs rather than unproven programs.

Unprecedented Mandatory Annual Tax Increases

The starting tax rate is $0.06 per square foot on homes and $0.09 per square foot on businesses. For a 1,600 square foot home, the starting price would be $100 per year that will increase rapidly because the measure imposes automatic annual tax increases regardless of need or impact on residents or businesses.

 

“Annually in May, the City Council shall increase the previous year’s rate by up to the greater of the cost of living in the immediate San Francisco Bay Area or per capita personal income growth in the state” (Section 7.03.020 B.)

 

Every past and current Berkeley parcel tax measure gives City Council the discretion to make inflationary adjustments. Mandating this increase based on the greatest inflationary measure is unprecedented. During inflationary periods, the increase could exceed 10%. Increases would be automatic throughout the life of the measure even if there was no need for additional funding.

The Bank Does Not Yet Exist (And May Never Exist)

Voters are being asked to approve funding for a public bank that has not been authorized to operate. Banking is one of the most heavily regulated industries in the United States, requiring institutions to meet stringent capital, liquidity, risk management, and regulatory compliance standards designed to protect depositors and maintain financial stability. It is unclear if authorization will be obtained.

If the Bank does not secure authorization to conduct business by or before June 30, 2033, the special fund may be used to offer loans which support affordable housing, green energy/infrastructure, and/or small businesses until such authorization has been secured, consistent with this Chapter. (7.03.010 F.)

The ordinance allows until June 30, 2033 for the bank to obtain regulatory approval.  The tax begins immediately, but the bank may never exist.

Redundant with Existing Financing Programs

The bank intends to finance three principal activities:

• Housing,

• Infrastructure,

• Small businesses

California already operates several public financing programs serving these purposes, including:

• The California Capital Programs and Climate Financing Authority (CPCFA)

• The California Infrastructure and Economic Development Bank (IBank)

• Community Development Financial Institutions (Cal IIP)

• Municipal bond financing program

Local credit unions and regional banks provide additional financing for housing and businesses. Berkeley residents are already paying for multiple bond measures to support affordable housing and infrastructure. The Federal Small Business Administration also maintains a loan program from small to large and can be used for most business purposes, including long-term fixed assets and operating capital. 

A central policy question is why pay for a speculative entity for services existing public and private financing programs already deliver.

Significant Financial Assumptions

The 2024 review by HR&A Advisors commissioned by the City of Berkeley concluded that the proposed business model resembles a plausible de novo bank but emphasized that its success depends upon several major assumptions.

Among them:

• approximately $40 million in initial capitalization,

• substantial additional deposits,

• participation by multiple local governments,

• significant funding from foundations, unions, and other private sources.

HR&A noted that many of these commitments have not been secured and recommended that participating governments establish clear funding milestones before committing public money. Under this measure, Berkeley homes and businesses are the only source of revenue; no other local government is required to pay. However, the funds can be spent in Oakland, Richmond and other cities throughout the East Bay.

High Risk Lending Practices

The ordinance authorizes lending to eligible businesses the bank’s management believes "can grow and thrive with loan support" – a subjective standard not typically used to evaluate lending decisions.

Its definition of eligible businesses includes:

• Startups,

• Businesses too small to obtain adequate support from traditional banks,

• Businesses requiring early-stage financing,

• Businesses that the bank's management believes "can grow and thrive with loan support."

These loans are risky. Nationally, roughly half of all startups fail within five years. The Bay Area’s costly environment makes the failure rate even higher. There is a high probability that a many of these high risk loans will default creating additional pressure on the bank’s finances and potentially requiring greater taxpayer subsidies.

Voter Considerations

If approved, Berkeley homes and businesses would be required to:

• Pay a new parcel tax.

• Accept automatic annual tax increases tied to inflation or income growth.

• Capitalize a public bank that has not yet been authorized to operate, and may never will.

• Support lending in cities across the East Bay area without any guaranteed minimum for Berkeley.

• Assume the risk associated with launching a new regional lending institution.

• Be on the hook for additional tax subsidies should the bank’s finances deteriorate

The Public Bank Measure: Should Berkeley Homes and Businesses Subsidize Risky Loans for Everyone Else in the East Bay?

You may have recently been asked to support the so-called “Public Bank” measure. Here’s what the measure actually does: it imposes a new parcel tax on Berkeley homes and businesses—while authorizing a yet-to-be-approved bank to spend the money anywhere it chooses in the East Bay.

In short, Berkeley taxpayers would underwrite high-risk loans that may benefit other cities, all while driving up housing and business costs here at home. Ironically, the measure claims to help small businesses even as it imposes a 33% surcharge on non-residential properties—hitting struggling Berkeley businesses to fund ventures outside the city proper.

A Tax First. A Bank? Maybe—Later

Since 2019, Public Bank-tax proponents have sought an “initial” $40 million investment from Oakland, Berkeley, Richmond, and Alameda County to launch a Public Bank. In 2024, the Berkeley City Council approved $50,000 for a "Viability Study” to determine what capitalization would require. That report has not been publicly released (to the best of our knowledge), so we have requested a copy. City staff have concluded that a Public Bank would demand a “huge investment”—a risky proposition given Berkeley’s $28 million structural deficit.

Undeterred, Bank proponents are now pushing a ballot measure to impose a tax on Berkeley residents and businesses for up to eight years before a single loan is ever made.

If the Bank does not secure authorization to conduct business by or before June 30, 2033, the special fund may be used to offer loans which support affordable housing, green energy/infrastructure, and/or small businesses until such authorization has been secured, consistent with this Chapter. [Section 7.03.010 F]

In other words: Tax immediately. Structure later. Delay business activity until maybe  2033.

Mandatory Tax Increases….Forever

Don’t be fooled by the introductory tax rate. Like a credit card with a hidden interest spike, the measure mandates annual parcel tax increases. Each May, the City Council must raise the prior year’s rate by the greater of Bay Area cost-of-living growth or state per capita income growth. In 2025, this formula resulted in parcel tax increases of 6.44%. In periods of high inflation, the increase could exceed 10%. Council would have no discretion to stop the escalator— it is guaranteed in the language of the tax measure. The Public Bank is not.

Annually in May, the City Council shall increase the previous year's rate by up to the greater of the cost of living in the immediate San Francisco Bay Area or per capita personal income growth in the state. [Section 7.03.020 B]

Berkeley Subsidizing Risky Loans Anywhere in the East Bay

One of the most disturbing aspects of this measure is that there is no requirement that funds be spent in Berkeley. Because the bank does not yet exist, its eventual service area is unknown. A modicum of assurance to taxpayers would be a provision that guarantees a minimum percentage of subsidies paid by Berkeley taxpayers would be loaned within Berkeley. However, no such a provision exists. 

High-Risk Lending Rejected by Other Progressive Jurisdictions

Proponents of the Public Bank measure insist Berkeley property taxpayers should subsidize regional business startups because big banks deem such loans as “unprofitable or risky.” However, this measure will prioritize extremely high risk ventures:

 

• Businesses too small to secure traditional financing, 

• Startups,

• Any operation the Bank’s management believes “can grow and thrive with loan support.”

These loans are extremely risky. Nationally, roughly half of all startups fail within five years. The Bay Area’s costly environment makes the failure rate even higher. Adding a 33% surcharge to Berkeley businesses only increases financial strain locally—while subsidizing risky ventures in other cities. Further, management only needs to "believe" a business "can grow and thrive" as opposed to making an affirmative financial determination that the enterprise is viable.

Massachusetts rejected a Public Bank at the state level citing these exact concerns: the high costs, risks, and unclear benefits including a significant initial investment of capital by taxpayers.

A Redundant “Solution” in Search of a Problem

Existing mission-driven banks and credit unions already serve small businesses and nonprofits without taxpayer subsidies. The Public Bank measure would create a subsidized entity competing with these local lenders.

Besides small business, the parcel tax subsidies may be used to finance housing and green energy infrastructure. However, the state already operates the California Infrastructure and Economic Development Bank (IBank).  IBank has financed over $56 Billion in energy, infrastructure, and housing.

From Dubious Economics to Nonsensical Gaslighting

These are undeniably difficult times (as we have previously noted), with federal cuts to health care, education, and social support hitting Berkeley hard—including reductions to social safety nets, and funding for UC Berkeley and the National Labs. Bank proponents are using these hardships to justify yet another local tax—appealing to emotion and identity politics rather than fiscal sense. A Public Bank cannot replace federal funding for essential services and “provide local resilience.” Please, stop the gaslighting.

At a time when the federal government has made many sudden grant cancellations, a public bank can provide local resilience to changes in federal funding flows or from federal government shutdowns. [section 2: I]

To the proponents of the Public Bank tax, please explain under what existing conditions would bank loans be a substitute for federal funding for health services and research?

The Bottom Line

This measure asks Berkeley homeowners and businesses to:

• Fund a bank that does not yet exist

• Approve a permanent parcel tax

• Accept automatic annual increases pegged to the highest inflator

• Subsidize high-risk regional lending

• Receive no guarantee that funds stay in Berkeley (100% could be spent elsewhere in the East Bay such as Richmond or Oakland)

Berkeley faces real fiscal challenges. Layering a permanent, automatically escalating tax onto residents and small businesses to finance a speculative regional bank will not result in fiscal resilience.

In fact, a Public Bank would be a  long-term financial gamble—with Berkeley taxpayers holding all the risk.