Mayor Ishii says Berkeley has a “structural deficit.” What does that mean?
A structural deficit is not the same as temporarily running short of cash, and it is not merely one bad budget year.
It means the gap repeats. Unless recurring revenue rises or recurring spending falls, the same shortfall appears again next year — and the year after that.
Berkeley's City Auditor put the figure at $32 million in FY2027 and $33 million in FY2028.
When did Berkeley first publicly identify the kind of recurring budget imbalance it now calls a structural deficit?
More than a decade ago. Berkeley's FY2012–13 adopted budget was already describing a structural deficit and discussing salary and benefit growth outpacing revenue.
The people making today's decisions say the same. Councilmember Kesarwani said in 2026 that “we knew” the structural deficit would recur. Mayor Ishii has called the current deficit “longstanding.”
More than a decade ago Berkeley's own budget said correcting its projected structural deficits required cutting recurring spending. In February 2025, which eight-year incumbent described the City's operating deficit as “first of its kind”?
Ben Bartlett, first elected in 2016. On 11 February 2025 he told Council: “We have a $13 million deficit this year, first of its kind deficit. Not one of our usual infrastructure deficits, this is a new operating budget deficit.”
Berkeley's FY2012–13 adopted budget had already named both the problem and the cure: “The impacts of escalating costs combined with revenue reductions result in a projected structural deficit in the General Fund and several of the major funds. In order to correct the City's projected structural deficits recurring expenditure reductions are needed.” Its five-year forecast projected the General Fund gap growing “to over $8 million in FY 2016” — the year Bartlett took his seat.
Council did not cut recurring spending. It added it. Bartlett is the original sponsor of the African American Holistic Resource Center, whose operating cost the City still lists as TBD with no identified recurring funding stream — a commitment every member present has since carried forward.
He named the mechanism himself in the same remarks: “This deficit will continue to grow as our scale or structural costs increase.” That describes a structural deficit. It does not describe a new one.
Measure P was sold to voters as raising an estimated $6–8 million a year for general municipal purposes such as homeless services. It has actually averaged about $11 million a year. What can Council legally do with that revenue?
Council has discretion over all of it. Measure P was sold around homelessness, but it is a general tax. The ballot said it would raise funds “for general municipal purposes such as” homeless services, and the Homeless Services Panel recommends expenditures; Council decides.
Voters were told to expect $6–8 million annually. The City now says Measure P has averaged about $11 million a year.
That leaves Council with flexibility today.
Even if Council treats the campaign's homelessness commitment as binding in spirit, it can continue putting the entire promised $6–8 million toward homelessness and direct roughly $3–5 million of the average annual overperformance toward the longstanding General Fund deficit.
Legally, Council has even more flexibility. Because Measure P is a general tax, it can redirect as much of the revenue as it chooses. Homelessness is a political commitment, not a legal restriction.
Whether Measure V passes or fails, Berkeley already has flexible General Fund revenue that Council can choose to use differently.
Supporters warn that without Measure V, Berkeley faces cuts to fire and 911. If Measure V fails, what is the City legally required to do?
Nothing requires those particular cuts. The City Attorney's impartial analysis describes no consequence, mandated reduction, or contingency if the measure fails. If Measure V does not pass, Council still has to adopt a General Fund budget and decide what Berkeley funds first.
The symmetry runs the other way too. Measure V is a general tax: the analysis states the revenue “would be placed into the General Fund and could be spent on any valid municipal purpose.” So passage does not guarantee a dollar of it reaches fire or 911, and failure does not require a dollar to be taken from them. Both outcomes leave the same body making the same choice.
That is the question the framing avoids. “Fire and 911 or new revenue” presents a budgeting decision as a fact about the world. What a voter is entitled to see is what Council would fund first with the money, and what it would protect without it — and neither answer is on the ballot.
Even after reconsidering politically directed uses of existing General Fund revenue, a city with a recurring structural deficit has other choices besides raising taxes. Which of these could reduce the recurring gap?
The four correct choices share one feature: each changes the recurring picture. The other two cover a year and leave the structure untouched.
Berkeley has repeatedly used the second kind. The FY2025 budget was balanced with $4.7 million from the workers' compensation reserve and a $3 million withdrawal from the Section 115 pension pre-funding trust. Both covered a budget year. Neither corrected the recurring mismatch — and the pension draw worked against the City's own pre-funding strategy.
The County option is not hypothetical either. Environmental Health food-facility inspection was discussed as a service Alameda County already performs for other cities. Council raised fees instead, without directing the City-versus-County cost comparison that would have shown whether the alternative was cheaper.
In her April 15, 2026 budget message, Mayor Ishii told residents she was also focused on raising revenue — not only on the proposed sales tax. Which activity did she identify?
Writing that “we have also been focused on revenue generation,” the Mayor pointed to promoting local hotels and businesses, and to improving fee collection.
That is a legitimate idea. More hotel stays and more business activity do produce recurring City revenue.
It is also, in her message to residents, the whole of what she offered besides the tax. There was no reorganization of services, no scope reduction, no consolidation with the County, no renegotiation of recurring costs — nothing on the spending side of a recurring imbalance.
And the revenue-side answer has a scale problem. Berkeley already pays Visit Berkeley from hotel-tax revenue specifically to market tourism and lodging. The City's FY2025 financial report shows about $20.0 million in sales-tax revenue and about $6.4 million in net transient-occupancy-tax revenue. Those are the entire existing streams, not the additional revenue that better promotion might realistically produce. Together they are still smaller than a roughly $30-million recurring gap.
So the conclusion from the separate hotel-and-business review is not that Berkeley should stop promoting hotels or local businesses. It is that naming economic growth as an activity is not the same as showing a fiscal plan of the required scale. If promotion is the principal alternative offered to a new tax, voters should be shown what additional revenue it can realistically generate — and what recurring spending changes address the rest.
While Council was considering Berkeley's proposed 0.5% City sales tax (Measure V), what other 0.5% sales-tax proposal was also headed toward Berkeley voters?
A regional transit measure, also a 0.5% sales tax, was moving toward the same November ballot.
Berkeley's own resolution placing Measure V describes it as “bringing the aggregate sales tax rate in Berkeley to 10.75%.” That is the rate if Berkeley's measure passes alone. If both pass, the combined rate would be 11.25%.
The combined figure was not absent from the room. At the June 16, 2026 meeting where Council placed the measure, two members of the public raised it directly — one warning that “at 11.25%, you will see a serious decline in revenues from sales tax,” another that Berkeley businesses were “effectively on track for an 11.25% sales tax rate on top of the 5% plus inflators you've just approved.”
Each comment was answered with “thank you,” and the meeting moved on. The resolution Council adopted that night, and again on second reading two weeks later, still described the result as 10.75%.
What would best demonstrate that Berkeley actually needs another sales tax to address its structural deficit?
The existence of a structural deficit establishes a problem. It does not establish that a particular tax is the necessary solution, or that the proposed rate is the right size.
The three wrong answers are all ways of choosing a number without establishing a need. Comparing rates with neighbors tells you what other cities decided, not what Berkeley requires. Unused capacity tells you what is legally available. Polling tells you what voters will tolerate.
What voters should be able to see is the work between “we have a $30 million problem” and “therefore we need another sales tax”: the alternatives examined, what each could save or generate, what was rejected and why, and the financing gap that remained.
Quiz complete
A NO vote on Measure V is not a vote to cut fire and 911. It is a vote to make City Hall reopen the budget and prioritize.
Measure V is a general tax: the City Attorney's analysis says the revenue “would be placed into the General Fund and could be spent on any valid municipal purpose.” Nothing in the measure guarantees a dollar of it reaches fire or 911 if it passes, and nothing obligates the City to cut either if it fails — the analysis describes no mandated reduction at all. Berkeley has known about this deficit since the FY2012–13 budget, which named the cure as recurring spending cuts, and the staff report recommending Measure V listed two alternatives: do not place it on the ballot, or bring it back later. Presenting those cuts as the alternative is a scare tactic that avoids the harder question of what City Hall should prioritize first.
So why does Berkeley need another sales tax?
Berkeley has a real structural deficit, and its own budgets identified the underlying recurring imbalance more than a decade ago. The existence of that problem does not by itself establish that a new sales tax is the necessary solution or that the proposed rate is the right size.
This quiz found fiscal capacity and choices that already existed: Measure P is legally general-tax revenue; one-time balancing measures did not correct the recurring mismatch; and recurring expenditure reductions, service redesign, alternative delivery, and genuine economic growth are all categories that can change the recurring picture. Mayor Ishii also said she was focused on hotel and business promotion, but naming a revenue activity is not the same as showing how much of a $30-million-scale gap it can close.
The standard is straightforward: show the work between 'we have a recurring problem' and 'therefore residents need to pay this tax.' Quantify the alternatives, say what was tried, say what was rejected and why, and tax only for the recurring gap that remains. The record assembled for this project does not yet show a comparably developed non-tax plan behind Measure V.