My conclusions come from over 30 years of experience as a CPA to small and mid-sized businesses and non-profits in the East Bay, that cumulatively have hired thousands of employees and paid hundreds of millions in wages.
Under the City Charter the City Auditor has very broad powers to both audit and to act as an independent budget adviser to the City.
As Auditor I would take a much more active role in fullfilling the advisory role.
If we don't deal with the large deficits that the City's own budget department projects in the coming years, we will have to either drastically cut vital services further, drastically cut employee compensation, or drastically increase parcel taxes.
Those would have different effects on the City's economy. Big increases in parcel taxes would make it extremely difficult for OUSD to raise the tax revenue it will need in coming years as buildings age and student populations drop.
There are specific things we could do right away. If we wait too long, we’ll have to do them just to avoid falling behind other cities.
- Find civic-minded businesses that would invest in the installation of dark fiber internet to at least the BART corridor. There are Federal matching grants available.
- Implement free trade zones so that high value light assembly business could thrive here free of US customs fees.
- Start a city-owned electric power utility that it could provide cheap electricity to industries that move here. This has the other benefit of providing green power for consumers who are willing to pay more than conventional power but still less than PGE would charge.
- Lower the business tax rate permanently to the average of the 6 other largest cities in the Bay Area.
- Lower the business tax rate for totally new start-ups, including newly constructed rental housing but not medical marijuana, with a two year holiday from any business tax.
Spending money on economic development consultants, staff, and promotion is often not effective. NPR's Planet Money had a very good series on the subject. http://www.thisamericanlife.org/radio-archives/episode/435/how-to-create-a-job
To the extent Oakland “succeeded” in the past at business development it was to attract government and non-profit organizations to downtown. Unfortunately, that was too successful. Those types of organizations pay 0 business taxes, 0 property taxes, and generally have employees who spend very little at lunchtime or after work. But they do require costly city services which are only partly offset by the social services they provide to Oakland residents. They do compete for office space with businesses that pay taxes.
Let's focus on providing high quality basic city services without having to later lay them off when the current real estate bubble deflates. Let’s not encourage any particular type of enterprise to locate here.
Economic development will come all on its own if we don’t scare it away with high crime, poor schools and weak infrastructure.
Avoid trying to encourage certain types of businesses, be they green tech or green medical marijuana. If the Feds are bad at picking tech winners, and savvy venture capitalists assume that most of their investments will be duds, then the odds are not good that a bunch of City Council members, most of whom have never started their own for-profit business in their lives, let alone worked for a for profit enterprise, be trusted to decide which types of business or specific business to encourage.
If Oakland just had substantially less crime, it would attract a hefty percentage of the business that now goes to SF or skips over Oakland to go to the East Bay cities that surround us. I’ve heard that from numerous business clients who chose not to locate here and from affluent clients who won’t shop in Oakland.
But if we improved our schools, that success would be even greater because of a better prepared workforce and a more attractive place for employees of prospective business.