by Steve Early
Butt’s belief that it was a “clear conflict of interest” for RPA city councilors to be aligned with Local 1021, the largest city employees union, did not bode well for future consensus on municipal labor relations issues involving its 360 members in Richmond. In fact, it wasn’t long before differences flared up again over the city budget, Point Molate development decisions, and even subjects of past left-liberal agreement like public safety reform. During the debate about Police Commission changes, Butt accused RPA councilors of cop-bashing; he described Jael Myrick as “arrogant and self-righteous” for siding with the RPA. Myrick, in turn, urged all his council colleagues to “stop constantly questioning one another’s motives when we have disagreements” due to conflicting “perspectives, ideals, and worldviews.”24
Prior to launching its 2016 rent control and city council campaigns, the RPA held strategy sessions and discussions on the lessons of past election battles. At one such gathering, about forty RPA supporters met at Richmond’s main library to consider how the city’s changing political ecosystem might affect the outcome of voting in a presidential election year. For example, would there be defections among more affluent, home-owning voters, who shared RPA concerns about Chevron but agreed with Tom Butt’s critique of rent control? Would any loss of support in that segment of the Richmond community be offset by an electoral surge by low-income tenants with the most to gain from this reform? Or would Richmond’s disproportionately lower levels of Latino voter registration, turnout, and eligibility to vote (due to non-citizenship) make winning rent regulation via referendum too difficult? (Later polling by friends and foes of rent control confirmed strong support for the concept among likely voters.)
At a workshop to help Richmond immigrants apply for citizenship, new RPA cochair Marcos Banales acknowledged the barriers to political participation by Latinos and the cynicism of some who could already vote. “In one-on-one talks, they tell me, ‘politicians always promise a lot of things but nothing changes, so why worry about it?’”25 If that mentality can’t be changed, Banales believed, the RPA should rely instead on young people inspired by Bernie Sanders’s social justice message or alarmed by the xenophobia of Donald Trump.
At another public forum, this time at a church in Oakland, Gayle McLaughlin compared notes with a forty-three-year-old Indian immigrant named Kshama Sawant. She had become the US left’s best-known local elected official by winning a Seattle city council seat in 2013. In her reelection battle two years later, Sawant got much support from young people newly enthused about local politics because of their Sanders campaign experience.
As a backer of rent control and other Richmond-style reforms, Sawant still had to overcome what she called “a tsunami of corporate cash.” Top executives from Starbucks, Boeing, Alaska Airlines, local banks, and builders gave $100,000 to her opponent, the African American CEO of Seattle’s Urban League. Six of Sawant’s nine fellow city councilors backed this chamber of commerce effort to knock her off the council. She also faced attack ads and mailers funded by a super PAC formed to collect money from corporations across the country.
Sawant’s own formidable fund-raising, aided by her membership in a national organization called Socialist Alternative, attracted 4,000 donors from Seattle and out of town. For a district election decided by less than 32,000 voters, her campaign raised $450,000 and recruited 600 volunteers. The latter knocked on 90,000 doors and made 170,000 voter-ID and get-out-the-vote calls. According to Sawant, her 56 to 44 percent victory showed “that it’s possible to run a serious campaign entirely powered by donations from ordinary people inspired by a bold, pro-worker platform.”26
McLaughlin argued that an influx of “more people of color and younger people” as “key leaders of the campaign” would produce similar success for the RPA in 2016. To pay for its expanded organizing, Richmond progressives made their first-ever national fund-raising appeal, via RootsAction, a vehicle for online activism and political crowdfunding cofounded by Norman Solomon, a Northern Californian neighbor who writes for the Nation.27
RootsAction hailed the RPA as “a model for progressive action” that was “rising up against corporate control of the democratic process.” The pitch raised more than four thousand dollars to help pay the rent and revive the RPA’s campaign newspaper, the Richmond Sun. In November 2016, RPA campaigners would face another test of their now much-practiced ground game. More than money, always in short supply, they counted on volunteer recruitment, voter identification and education, and systematic turnout. If the RPA succeeded, it would gain a council majority for the first time since the group was formed, an electoral outcome far from certain and definitely not welcomed by all.28
EPILOGUE
MAKING LOCAL PROGRESS
EARLY IN HIS FIRST TERM as mayor of New York City, Democrat Bill de Blasio was widely hailed for tackling local manifestations of national problems, like inequality, by harnessing the power of the social movements that helped get him elected. Dissent magazine described cities like New York, under de Blasio, as “lighthouses in the reactionary storm” that will only get worse if the “conservative movement gains total control of the federal government” in 2016.1 In its own “Cities Rising” series, the Nation regularly applauded de Blasio’s “new urban agenda” as a leading example of municipalities becoming “laboratories for progressive innovation,” despite “widespread despair about national politics.”
New York’s municipal reformers have benefited greatly from the city’s system of public matching funds, which encourages reliance on small donors and reduces municipal candidate dependence on wealthy individuals and local business interests.2 After de Blasio was elected in 2013, he and his city council’s nineteen-member Progressive Caucus racked up a series of victories. They were able to extend mandatory sick leave to an additional five hundred thousand workers, launch a universal pre-kindergarten program, issue municipal ID cards to undocumented immigrants, experiment with participatory budgeting, raise the minimum wage for city workers to fifteen dollars an hour, and secure rent increase relief for tenants. “Every time we succeed, it builds momentum for other cities,” de Blasio told Gayle McLaughlin and other visiting members of Local Progress in December 2014. Thanks to activist leadership in cities across the country, “change is coming,” de Blasio said, “and working its way up—real, sustained, and lasting change.”
Unfortunately, mayors do not rule the world, so their attempts to make change are frequently hobbled. Even in the Big Apple, renewing rent control, imposing new affordable-housing requirements on private developers, undertaking infrastructure repairs, and addressing public education problems all require help or approval from Albany. Want to impose a five-cent fee on disposable plastic shopping bags for waste-reduction purposes in NYC? It doesn’t happen without state legislators threatening, in bipartisan fashion, to block any municipality from enacting such a surcharge, a move that forced city council member Brad Lauder, a Local Progress leader, to accept delayed implementation of the tax he proposed and got the council to approve.3
After only eighteen months of such experiences, Mayor de Blasio was venting fiercely about how much control his state’s governor and legislature exercise over New York City affairs. The mayor’s main source of upstate frustration was New York governor Andrew Cuomo, a fellow Democrat and favorite of Wall Street. His claimed successes have been capping property taxes, reducing corporate taxation, and creating tax-free zones for startup firms. During New York’s 2014 elections, Cuomo openly reneged on a pledge, made personally to de Blasio, to help elect more Democrats to the GOP-controlled state senate. Instead, as Nation columnist Eric Alterman reports, the governor “worked to elect a Republican legislature, undermining candidates of his own party.”
Post-election, Cuomo returned to Albany and personally “batted down every one of de Blasio’s proposals, particularly those advancing affordable housing and early childhood education.”4 Even editorial writers at the New York Times were forced to conclude that their end
orsed Democratic candidate for governor “had acted disgracefully toward the 8.5 million people of the city Mr. de Blasio leads.”5
Amid continuing academic and journalistic celebration of municipal innovation and mayoral leadership, the Cuomo–de Blasio rift provides a good reality check on the constraints faced by elected leaders in cities large and small. De Blasio responded, of course, with a forceful defense of what he called “fundamental achievements with a very big reach.”6 They include a local rent freeze helping many New York City tenants, progress on affordable housing creation, and the rollout of his universal pre-kindergarten program (although Cuomo helped nix the tax on higher incomes that the mayor proposed to fund it). Yet thanks to ongoing upstate sabotage of his downstate agenda, the mayor could still wake up to front-page headlines like this one from mid-2015: “Messes Pile Up for de Blasio in 2nd Year.”7
Richmond is one-eightieth the size of New York, but municipal officials there face multiple challenges of their own. Like their counterparts in New York, mayors and city councilors in California have far less influence over county, state, and federal policy than they would like and limited resources at their disposal. Even if local initiatives are far from utopian, their funding requires a shared commitment to social and economic problem solving at higher levels of government.8 Not only is that too often absent, but powerful private interests (like plastic-bag manufacturers, developers, or landlords) can use their sway elsewhere to thwart regulation or revenue generation.
In Mayor de Blasio’s city, state legislators are particularly reluctant to relinquish their current role in school administration, taxation, and mass transit operation. And the only long-term structural remedy for that would be rewriting the state constitution, via the complicated process of holding a constitutional convention. (Such a convention can only be convened by popular referendum, and its results must be confirmed the same way.)9
In Richmond, city government’s ability to address local manifestations of national problems related to poverty, inequality, and health-care access is hampered by scarce financial resources and lack of local control. Richmond’s troubled public schools are run by a “unified school district” encompassing other cities. Its board members are not elected by Richmond residents alone. Doctors Medical Center, the public hospital long used by low-income Richmond patients, was operated by the West Contra Costa Healthcare District, which has an elected board similarly composed of representatives from multiple communities. The DMC was closed—despite objections from the people most dependent on it—just as many other public hospitals in California have been shuttered in recent years.
Local finances are greatly affected by state and federal spending priorities, and in California, property taxation is imposed at the county level, not locally. The work of Richmond’s downtown revival has been hampered by the state legislature’s bipartisan “dissolution of local redevelopment agencies, a policy that hit cities like Oakland and Richmond extremely hard, taking away millions previously used for economic development programs and affordable housing.”10 The scope of any rent control approved by Richmond voters in November 2016 is limited to newer rental properties, per past landlord-friendly action by state legislators. And rent regulation by itself, as supporters and opponents agree, does not increase the city’s supply of low-income housing through new construction.
“What we really need,” argues Gayle McLaughlin, “is a major federal affordable housing program.” Yet, in recent fiscal years, Richmond’s own federal housing grants have steadily diminished in size due to sequestration-driven budget cuts and Housing and Urban Development funding that was inadequate to begin with. As a result, cities like Richmond, trying to expand their affordable housing stock, must continue to rely on collecting “in lieu” fees from builders of market-rate housing or persuade these developers to set aside some units for lower-income tenants. However, Governor Brown and powerful real estate interests favor a new quid pro quo for this private subsidization of greater housing affordability. They want development projects that designate a small percentage of units as affordable to be exempted from normal environmental review and community-approval processes, which are already under real estate industry attack.11
THE FISCAL SQUEEZE
During Tom Butt’s first year in office, Richmond depended on new revenue from a sales-tax increase—approved by voters in 2014—to keep its annual budget of about $140 million in technical balance. In 2015 Richmond also had to use one-time revenue sources, such as Chevron’s latest installment payment on its multiyear tax settlement, to eliminate a projected $9 million deficit. The alternative would have been cuts in public safety or library services and staff, although not on the scale of the cutbacks in 2003.
Future infusions of Chevron money, owed to the city under the terms of the refinery modernization deal, cannot be used in the same fashion. Those incremental payments are already earmarked for programs like Richmond Promise, the scholarship program open to graduates of local public and charter schools. As for closing future budget gaps with any Chevron damage payment for the 2012 fire, Tom Butt predicted that the city’s lawsuit against the company “will take a couple of years to pay off.” According to Butt, “It’s going to get settled on the courthouse steps.” But as this book went to press, in mid-2016, lawyers for both sides hadn’t gotten that far yet.
In June 2015, Moody’s Investors Service downgraded Richmond’s bond rating to “medium risk,” citing the city’s “unhealthy dependence on Chevron for a large portion of property taxes and a history of borrowing from various funds to balance the budget.” This action was vigorously contested by Butt, as was a related probe of the city’s finances suddenly announced by the California comptroller’s office and then just as abruptly canceled after city officials argued that it was not warranted. Striking a populist RPA-like note, Butt decried the role played by Moody’s (and its two fellow ratings agencies) in holding “life and death decision-making authority over public agencies, with a handful of self-appointed ‘experts’ playing God with the fate of cities like Richmond.”12 Moody’s downgrade proved costly because it forced Richmond to renegotiate terms of one ten-year-old bond. To avoid paying an immediate $30 million bond termination fee, the city agreed to pay the holders higher interest, amounting to $10 million, over the life of the bond.
“While the City of Richmond faces continuing fiscal challenges, it is in many ways no more challenged than most municipal governments,” Butt insisted. “The city is not even close to any kind of financial failure.” Unfortunately, balancing the budget became a continuing challenge for the new mayor, while creating an annual source of political tension with his predecessor and her RPA colleagues. As the deadline approached for adoption of the city’s fiscal year 2016–2017 budget, Richmond faced a $3 million shortfall. The mayor, city manager, and their staffs were resigned to some combination of job cuts, city service curtailment, and/or health-care cost shifting to balance the budget. (The employee benefit changes required negotiation with city unions.)
McLaughlin, Beckles, and Martinez weighed in with an alternative plan, inspired by the practices of the Mondragon Cooperative, a famous worker-owned enterprise in Spain. They proposed to balance the budget with “graduated salary reductions”—temporary pay cuts that would not affect city workers making less than $60,000 annually and would fall most heavily on those making $80,000 or more. This creative attempt to minimize city-service cuts did not sit well with the mayor, the council majority, Richmond’s management employees, or the unions representing its higher-paid public safety workers.
In Butt’s view, the proposal was “irrational and delusional.” It could not be implemented in time to balance the budget and would only trigger an exodus of city employees. “These kinds of measures may be possible in dictatorships,” the mayor asserted. “But they are virtually impossible in our type of government.” In the end, a new budget was approved unanimously, avoiding what Richmond’s bond counsel, John Knox, called “a potentially damaging
financial outcome.” Said Knox: “Those of us who watch the position of the city in the financial markets can exhale for the time being.” Usually a fierce critic of the RPA and its “radical socialist agenda,” Knox thanked the progressive councilors for their “spirit of cooperation” and willingness to “put the good of the city above their own agenda.”
As McLaughlin pointed out during this budget debate, Richmond will always be under fiscal duress without major tax reform.13 For nearly four decades, property tax revenue in every California city has been adversely affected by Proposition 13. Prop. 13 was passed statewide in 1978 by voters seeking tax relief for themselves, as homeowners. It also created a giant loophole for businesses like Chevron, by sparing them tax payments based on the assessed current market value of their property. This has led to a huge shift in the property tax burden from corporations to homeowners.
In 1978, California businesses contributed about 44 percent of all property tax revenue, while homeowner payments produced the other 56 percent. Today the corporations’ share is down to 28 percent and homeowners are responsible for 72 percent of the total property tax bill.14 As tax reform advocate Michael Bornstein points out, “Because some large commercial property owners are paying deeply discounted taxes based on 1975 assessments, everyone else has to pay more—$9 billion more.”15 Chevron alone saves about $225 million statewide and $30 million locally, thanks to Prop. 13 tax breaks. If the company paid its fair share, Richmond would not be forced to reduce services, cut staff, or seek health-care concessions from its employees. Instead, the city could balance its budget without such measures—and spend more on infrastructure repair, its reserve fund, future pension liabilities, and retiree health care costs.
