City of Berkeley Budget Frequently Asked Questions
OCTOBER 2012 UPDATE: We will be updating this page after the November 6, 2012 election. There are a number of state, county and local revenue measures on the ballot, and the budget figures on this page will be updated to reflect any changes.
Have questions about the budget? You're not alone. Here are a couple of frequently asked questions. If you still can't find what you're looking for, email firstname.lastname@example.org, and we will continue to add to this page throughout the budget process.
Be sure to also visit the Budget Definitions page for a very helpful glossary of terms.
What is a Budget?
A city’s budget is one of the most concrete expressions of public policy there is. Just as in your personal finances, whether you are saving money for a large purchase or paying monthly bills, how you spend your money reflects your goals. Likewise, the City Council makes decisions about the City’s budget based on what it hopes to accomplish during a given fiscal year. The budget is tied to the City’s Work Plan and the specific projects approved by Council.
While most individuals track their finances by the calendar year, the City manages its finances by fiscal year (July 1 – June 30). To help in its planning efforts, the City adopts a balanced two-year, or biennial, budget.
On June 23, 2009, the City adopted its two-year budget for Fiscal Year 2010 and Fiscal Year 2011, which covers July 1, 2009 – June 30, 2011. On June 22, 2010, the City adopted a mid-biennial budget update, which covered FY 2011. The discussion for the FY 2012 & 2013 biennial budget is expected to begin in fall of 2010.
A few notes about this graph:
- General Government includes eight departments: City Manager, City Attorney, City Clerk, Finance, Information Technology, Human Resources, City Auditor, and the Police Review Commission.
- The Housing category includes the Housing Department, the Rent Board, grants to community agencies, and some Berkeley Housing Authority funds.
- Some services are funded primarily through special funds (such as the library or the marina), while others are funded by the general fund (such as Fire and Police).
Where does the City get its money?
The City’s entire adopted budget for FY 2011 was about $324 million, of which about half is the General Fund, the City’s primary discretionary funding source. The General Fund gets the majority of its money from property taxes and property-based revenues; economically sensitive revenues such as sales tax, business license tax, transient occupancy tax, etc.; interest and fees such as ambulance fees; and parking and traffic fines.
The balance of the City budget is comprised of other funding sources such as grants, special tax revenue (like parks, libraries and paramedic services), and fees for specific services (marina berth fees, garbage and sewer fees, building permits, etc.). Revenue generated from these sources must be spent on very specific services. For example, the City cannot use revenue collected from sewer fees to fund police officers.
How much of my property tax dollar goes to City services?
About 33 cents.
California property taxes are set at 1% of the assessed value of the property. The City receives about a third of every property tax dollar collected in Berkeley, and schools get 43% of every property tax dollar. These proportions have been about the same since 1979.
Doesn’t the City get all the sales tax collected in Berkeley?
No – most sales tax goes to the State. Sales tax is 9.75 cents on every dollar. Of that, the State gets 7 cents, the county gets 1.75 cents, and the City gets a penny. In some cities, the economic downturn led to tremendous losses in sales tax revenue.
Berkeley’s sales tax has decreased, but is expected to remain steady going forward because of our efforts to retain our diverse retail mix. Sales tax is not expected to rebound to prior levels for another couple years.
What is Transfer Tax?
The decline in property transfer tax is an example of the impact of the economy on City budgets. Property transfer tax is revenue the City receives when residential and commercial property is sold. All of this revenue goes into the General Fund. This revenue is dependent on the fluctuating real estate market, and can vary dramatically from year to year (note the $9.2 million drop from FY 2007 to FY 2009).
To protect City services from this volatility, much of this revenue is used for one-time infrastructure needs, such as streets and transportation projects.
Where does most of the General Fund go?
For the current fiscal year (FY 2010), half of Berkeley’s discretionary General Fund budget is spent on police and fire protection services. The balance goes to capital projects such as streets and sidewalks, community agencies, debt service and general government services such as the City Clerk, customer service personnel, and Human Resources.
What say does the public have about the budget?
The public is a critical part of the City’s budget and is encouraged to attend City Council meetings when the budget is discussed. Visit the budget calendar page for more information.
The public is invited to write, call, email and visit their representatives on the City Council anytime during the fiscal year to discuss the City Budget. The public may download a copy of the budget from the budget document page.
You can contact Teresa Berkeley-Simmons, Budget Manager,with your budget-related questions. She can be reached at (510) 981-7000 or TBerkeley@CityofBerkeley.info.