As Councilwoman Sheng Thao campaigns to be the next mayor of Oakland, she should know the details, or at least the fundamentals, of the $850 million bond measure she and six of her council colleagues voted to put on the same election ballot.
But when asked about Measure U in our endorsement interview last week, she didn’t understand how the measure would work and grossly understated the tax property owners would be required to pay.
The encounter exemplifies why Thao is not ready to lead a city of 450,000 people that is confronting a 24% increase in homelessness over the last three years, homicides in 2021 that hit the highest level in 15 years, and inadequate police staffing. A city where, despite strong general fund tax revenues, leaders keep coming back to voters every election year for new tax hikes.
Thao is the candidate most labor unions and the city’s hard-left faction are trumpeting in the Nov. 8 election to replace Mayor Libby Schaaf, who has served the maximum two terms. Thao’s tenure on the council has been concerning. Most notably, she is among the council majority that has squeezed police funding and slow-walked Schaaf’s proposal to increase the number of training academies needed to speed up hiring of officers.
Like it or not, Thao’s position on law enforcement seems one of policy that is carefully politically calculated in a city that’s divided on the issue. In contrast, the discussion of the upcoming bond measure simply shows how uninformed she is.
Thao boasts that four years on the City Council and four prior years serving as policy director and then chief of staff for Councilwoman Rebecca Kaplan have prepared her to be mayor. Yet, when asked about Measure U, Thao was clueless.
VIDEO: Oakland Mayoral Candidate Sheng Thao’s endorsement interview
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She claimed the measure would cost property owners $198 a year; actually, for most homeowners the levy would be far more. She claimed the tax would be the same for all property owners; actually, it would vary depending on the assessed value. She claimed Measure U was merely an extension of an existing tax; actually, it’s a new tax piled on top of a similar old one.
She claimed it would be regressive, proportionately hurting those who could least afford it the most; actually, city officials chose Measure U’s tax method because it was the less-regressive option. And, echoing a deceptive talking point of Measure U supporters, she claimed it would not increase taxes. Wrong again.
Thao even seemed uncertain about how voter-approved bond measures work. Asked how they are usually paid off, she responded, “City revenue.” Nope. Voter-approved bond measures such as Measure U require property tax increases to pay off the debt.
Property tax basics
Thao wants to lead the Bay Area’s third-largest city. Voters deserve a mayor who understands the basics of taxes that city residents are being asked to pay. It should be bare-minimum knowledge to qualify for the job.
Here are the fundamentals that, after eight years in city government, Thao should know. There are two primary types of voter-approved property tax increases. One is a usually flat annual levy, often called a parcel tax, for a specific purpose or to supplement a city’s general fund. That’s what Thao wrongly claimed Measure U is.
The other type is a tax proportional to the assessed value of the property. The higher the assessed value of a house, the greater the annual tax. The money is used to pay off over decades bonds the city issues for a specific purpose. Measure U is such a bond measure.
City officials estimate that the property tax to pay off the Measure U bonds would be an average $67.35 per $100,000 of assessed value and last about 40 years. For a home with an average assessed value of about $500,000, that works out to about $337 per year.
One reason city officials opted to use a bond measure for Measure U is that the associated taxes are considered more “progressive” — those with greater assessed property values pay more. (To be sure, under California’s arcane property tax system, assessed value often doesn’t reflect the actual value of property.) In contrast, a flat parcel tax would have been a greater proportional burden on those with less means — it would have been more “regressive.”
Thao said she wasn’t sure she was going to support Measure U even though she had voted to put it on the ballot, and then said, “I’m actually not a fan of regressive taxing.” That answer would make sense if Measure U were a flat parcel tax. It isn’t.
Measure U details
Asked how much she thought the tax would be, Thao said, “I believe it’s $200” and then added with a laugh, “or $198 because it polls better.”
Thao also said that Measure U would not raise taxes because it was a renewal, at “the same amount,” of Measure KK, approved by voters in 2016 also to fund roads and housing. “They’re not raising taxes because it’s already an ongoing tax on it right now. It’s just a renewal, right.”
Thao is correct that Measure U would go for the same purposes as Measure KK. She’s incorrect that it’s merely an extension and that it would not raise taxes.
Like Measure U, Measure KK was a bond measure, not, as Thao claimed, a parcel tax. The ongoing annual taxes for repayment of the Measure KK bonds are projected to last through 2053. The taxes for repayment of Measure U bonds would begin in 2024, ramp up significantly in 2027 and last until 2062.
Thus, Measure U taxes would not be a replacement for Measure KK; they would be piled on top. City projections show that property tax payments for the two measures combined, for an average home assessed at $500,000, would jump to roughly $500 annually early in the next decade
The repayment structure for Measure U could avoid a net tax increase for property owners. But not for the reason Thao claims.
Rather, in 2026, a tax to help pay off police and firefighter pension liabilities that date back more than half a century is supposed to end. The pension tax is the single largest supplemental levy on Oakland property tax bills. Once that’s paid off, Oakland property owners should get a long-overdue tax reduction.
But, if Measure U passes, Oakland officials would ramp up those new taxes in 2027 — carving away at taxpayers’ savings from the pension tax elimination. That’s the convoluted rationale Measure U backers use to claim that it would not be a tax increase.
There are good reasons to oppose Measure U, but not because it’s regressive. Clearly, Thao didn’t understand the measure when she voted to place it on the ballot. And she still didn’t understand it when she was interviewed last week.
Now she wants voters to reward that incompetence by electing her mayor.
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