Fears of recession, loss of federal funding clouds county's budget outlook

'This budget that we’re looking at has some complications that we’ve never experienced in the past;' Final pre-election campaign finance reports for Oakland's special election

☕️MORNING BUZZ

—Over the past two decades, Alameda County has faced three distinctly adverse budget events.

The Great Recession, starting in 2009, ballooned Alameda County’s budget shortfall to a staggering $177 million. Annual deficits of $152 million and $137 million followed.

A mild recession in 2017 provided a momentary blip for what was five years of modest shortfalls ranging from $60 million to $67 million.

The strong local economy was sidetracked by the pandemic, raising the county’s shortfall to $128 million, but a torrent of federal stimulus funds kept the lights on.

The past four budget cycles have returned the county to an era of acceptable budget shortfalls.

—But growing worries about a recession on the horizon and great uncertainty about what the Trump administration has in store for local municipalities presents unique variables as the county heads into budget season.

“This budget that we’re looking at has some complications that we’ve never experienced in the past,” Supervisor Nate Miley said at a budget overview session on Tuesday.

“It’s different than the pandemic years, and what’s different than in 2009-10 is the fact that with the Trump administration they’re doing all sorts of stuff that no one ever contemplated. I mean, all sorts of crazy stuff. We just can’t figure out what is going to happen.”

Further complicating the budget road ahead is that Oakland’s large deficit may lead to cuts to some of the city’s social services programs,” Miley added. “I think some of that is going to be reflected in what we may have to entertain because of the level of marginalized residents in Oakland.”

Uncertainty about the local and national economy, the ramifications of Trump’s vast menu of tariffs, a drop in consumer confidence, and worries about a recession are tempered by some positives.

Home sales appeared to be rebounding. In Alameda County, the median number of days a single-family dwelling is on the market is 11 days, as opposed to 26 days statewide. Unemployment in Alameda County is 4.6 percent, as of January, which is below the state’s overall rate of 5.4 percent.

The unknowns, however, are aplenty.

“I think this year, more than ever, we need to have the forethought of contingency,” Supervisor David Haubert said. “What happens if we enter a recession? What happens if we receive fewer dollars from the federal government?”

Haubert floated an idea to focus upcoming budget discussions on services that are unmandated by the state and federal government, while also scrutinizing spending contained in previous budgets that may no longer be needed.

—More inside:

• Miley: Let’s not get too good at balancing our budget. Doing so could prompt the state to bypass Alameda County to fund struggling counties.

• Next steps for Alameda County’s budget.

• Alameda County Dems go somewhat wild: Arguments and disturbances returned at Wednesday's central committee meeting.

• Campaign finance capsules for each Oakland special election candidate and IEs

• Campaign finance data for Thursday: Love is in the air. Eight positive expenditures were posted with 11 days to Election Day.

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