There are six measures on Oakland’s ballot this year ranging from new taxes on vacant properties and luxury real estate, to tax breaks for cannabis companies, to stronger worker and renter protections, plus a parcel tax to pay for educational programs. Here’s what you need to know about each one before you vote.
Measure V: Cannabis Tax Break
Under Oakland’s existing laws, medical cannabis companies face a 5 percent tax on their gross receipts, and those selling weed for recreation have to pay 10 percent. These tax rates are locked in by a previous ballot measure and can only be changed by voters. Payments are due in one lump sum at the beginning of each year, meaning a company has to estimate their sales and hand over money in advance. This is difficult for businesses that don’t have a lot of cash on hand and for newer ones just getting started. And because the federal government still treats cannabis as the equivalent of meth (seriously, what year are we living in?!), California’s marijuana companies can’t deduct their expenses from their federal income taxes. The result is a system that’s overly burdensome for cannabis entrepreneurs.
Measure V is an attempt to fix these problems. If approved, the city council will have the power to adjust the current tax rates downward as much as it wants, while keeping the ceilings at 5 and 10 percent for medical and recreational sales. It will also allow cannabis companies to deduct the cost of materials from their gross receipts, making up for their inability to take deductions on their federal taxes. And it will allow companies to pay their city taxes on a quarterly basis, making it less burdensome.
Measure W: Vacant Property Tax
Measure W started out as a proposed 1-percent surtax on large rental property owners, but landlords’ groups beat back the idea. That sent Councilmember Rebecca Kaplan, the author of that measure, back to the drawing board. She returned with the idea of taxing vacant properties, defined as empty lots or buildings and condos that are used less than 50 days out of the year. Although Councilmembers Larry Reid and Lynette Gibson McElhaney sided with landlords again, the rest of the council thought this was a good idea and put in on the ballot. Mayor Libby Schaaf also supports it.
If approved, Measure W will impose a $3,000 to $6,000 parcel tax on vacant properties. The goal, according to supporters, is to incentivize owners to put land and housing into use. City staffers estimate that the tax could raise as much as $10 million a year. This money would be spent on homeless services and illegal dumping cleanup. There are exemptions to the tax for low-income seniors. Opponents, mostly landlords, have called Measure W “a scam to increase revenue to the city to pay pensions and a growing bureaucracy.” The union SEIU 1021 and the Homeless Advocacy Working Group also support Measure W and note that it includes an independent community oversight committee to make sure the money properly used.
Measure X: Real Estate Transfer Tax
Measure X isn’t a new tax, and for most Oaklanders, it won’t entail any tax increase. Rather, Measure X is a change to Oakland’s existing real estate transfer tax, which is currently a single rate for all transactions. If approved, Measure X would establish a graduated-rate structure. The vast majority of homes sold in Oakland won’t be affected because, under Measure X, the transfer tax rate will remain the same as it is now — 1.5 percent. But for land and buildings that sell for between $2 million and $5 million, the new rate will higher, 1.75 percent. And for very expensive properties sold above $5 million, the transfer tax will jump to 2.5 percent.
Written by Councilmember Dan Kalb, Measure X will give Oakland a progressive real estate transfer tax, similar to what San Francisco has. Most of the increase will fall on commercial properties, including big office and retail buildings. Only the most expensive homes in Oakland will be taxed at these new, higher rates. The Alameda County Taxpayers Association is predictably opposed. The group says Measure X is the result of “the city bureaucracy’s lust to reward itself” and urge voters to “choose austerity” instead of the roughly $9 million a year in new revenue Measure X would raise for the general fund.
Measure Y: Just Cause Renter Protections
Back in 2002, when Oakland originally adopted its Just Cause for Eviction Ordinance, one of the exemptions written into the law was for small landlords. To this day, even though they’re regulated by rent control, landlords who live in duplexes and triplexes can evict their tenants for any reason at any time. In recent years, as rents in Oakland have soared, the incentive for landlords to push out rent-controlled tenants in these small buildings has increased. In some cases, investors have swooped in, bought buildings, moved in, and conducted evictions. In other cases, owners have lied about living in the buildings to remove tenants and subvert rent control.
In response, Councilmember Dan Kalb, with support from Noel Gallo, introduced Measure Y, which would extend just cause protection to renters in two- and three-unit owner-occupied buildings. Property owners’ groups strongly oppose the measure, saying it removes the flexibility that small landlords need. But tenants counter that owners can still evict tenants who don’t pay rent, violate their lease, or for any of the other nine permitted reasons under the Just Cause Ordinance. If approved, Measure Y will extend eviction protections to renters in thousands more units of housing and stem displacement by limiting small landlords’ powers.
Measure Z: Hotel Worker Pay and Protections
Measure Z was placed on the ballot after more than 26,000 voters signed a petition. It would mandate that Oakland’s large hotels, those with more than 50 guest rooms, pay their employees a minimum wage of $15 an hour or $20 (without health care benefits). Hotels would also have to provide employees with panic buttons to protect them from sexual assaults and harassment. Hotels would also have to abide by strict limits on the amount of work they can push onto employees.
Measure Z is a response to recent abuses by some Oakland hotels that broke the city’s minimum wage law, as well as state labor laws, and to industry-wide problems of harassment and violence against housekeepers, who are mostly women of color.
Opposing Measure Z is Oakland City Council President Larry Reid and Zachary Wasserman, an attorney who has represented hotel corporations that violated Oakland’s minimum wage law. They argue the city doesn’t need to do more to enforce labor laws in hotels, and hotel workers shouldn’t be paid a higher wage than the city’s current minimum wage of $13.23 per hour. They also question why smaller hotels with fewer than 50 rooms along MacArthur Boulevard shouldn’t also be protected under this law.
Proponents argue that similar laws are already helping protect hotel workers in Emeryville, Seattle, and Chicago and that large hotel companies should have no financial difficulty treating their employees better.
Measure AA: Early Childhood and Preschool Education
Known as the “Oakland Children’s Initiative,” Measure AA has support from numerous high-profile leaders — Schaaf is heading the campaign with endorsements by Congresswoman Barbara Lee and Assemblymember Rob Bonta — and no other measure has nearly as much money backing it. Supporters have already spent just over a million promoting Measure AA.
If approved, it will create a $198, 30-year parcel tax to raise about $30 million annually. Most homeowners and other commercial property owners will pay the tax. There are a few hardship exemptions built in, however.
The money will be used to expand early childhood and preschool education and fund programs to improve high school graduation and college readiness. The money will be managed by nonprofit providers — called “implementation partners” in the ordinance — that would be selected by a citizens’ oversight commission created by Measure AA. Proponents argue that Measure AA is needed to boost Oakland’s low-graduation rates and make early childhood education more affordable to low-income and middle-class families.
