Albany’s General Municipal Election for 2026 includes a number of Ballot Measures that raise taxes to support city services. One of these is Measure Q, advanced to “protect funding” for Albany Fire Department in the event that Golden Gate Fields is transferred into public ownership.
At a recent event, more than one first-time candidate for Albany City Council voiced concern that the Council’s solution to an anticipated funding gap was a tax increase. The Stronach Group had announced the closure of Golden Gate Fields in July 16, 2023 (“Golden Gate Fields racetrack to close this fall,” NBC Bay Area, https://www.nbcbayarea.com/video/news/local/golden-gate-fields-racetrack-to-close-this-fall-2/3274060/). Interviewed a day later, then-Mayor Aaron Tiedemann told NBC Bay Area that the decision was a surprise to him (“Albany mayor on Golden Gate Fields closure,” NBC Bay Area, https://www.nbcbayarea.com/video/news/local/east-bay/albany-mayor-on-golden-gate-fields-closure/3274753/). In the end, Albany had a softer landing—the racetrack remained open until June 9, 2024 (“The history of Golden Gate Fields,” Berkeleyside, https://www.berkeleyside.org/2026/03/31/the-history-of-golden-gate-fields).
In a July 2025 article in the The Mercury News, Albany Finance Directory Reina Schwartz stated that a long-term structural deficit was expected to reach close to $2 million by 2029 and peak at up to $6 million in 2035 (“Albany leaders consider budget stabilizing measures as revenue falls short,” July 9, 2025, The Mercury News, https://www.mercurynews.com/2025/07/09/albany-leaders-consider-budget-stabilizing-measures-as-revenue-falls-short/).
The 2025 article notes growing pension liabilities amounting to $45.2 million as well as major capital improvement projects that then remained unfunded. City staff proposed a number of options to “modernize” tax measures and increase revenue including “updating the language of the city’s business license fee, a street tree parcel tax and street lighting parcel tax, updating the city’s sewer enterprise fee to ensure everyone using the system is paying properly, and issuing bonds for building and facility upgrades.” To see the measures that made it onto the November ballot, see the City of Albany website.
Several members of the Council were interviewed for the 2025 article. Vice Mayor Peggy McQuaid voiced concerns that Albany voters would be overwhelmed by the number of measures that might go on the ballot. According to The Mercury:
She advocated for being realistic about what the city asks of its residents and for bundling related items like street lighting and tree management, calling it “a relatively easy sell.” Getting an updated business license measure passed may also be doable this upcoming election cycle, McQuaid said.
“We want them to trust us. We want them to believe us. We want to be able to serve them and I think if we overwhelm them they may just throw up their hands and say I’m not doing any of this,” McQuaid said. “Ideally, I’d like to do all of this, but I think we’re really going to have to think about what we can do and sort of keep it simple and take care of our real needs.”
Councilmember John Miki was also concerned that voters would face an excessive number of measures in November 2026. Specifically, he worried about measures combining language changes with new taxes.
Councilmember Preston Jordan defended the slate of proposed ballot measures, adding that he hoped some would appear on the June 2026 ballot. This would “enable the city to begin collecting revenue sooner, reducing the number of measures appearing on the November 2026 ballot” (“Albany leaders consider budget stabilizing measures as revenue falls short,” July 9, 2025, The Mercury News, https://www.mercurynews.com/2025/07/09/albany-leaders-consider-budget-stabilizing-measures-as-revenue-falls-short/).
♦
One of the measures on the November ballot that proposes to “modernize” taxation in Albany is Ballot Measure Q. This measure “updates” the Emergency Medical Services, Advanced Life Support, and Fire Protection Special Tax on residential and commercial property by adjusting the rate and reapportioning the tax to pull in about $2,500,000 annually or until voters end it. The measure closes a loophole that could raise rents for seniors living at Belmont Village but offers some protections for those with “low” and “very low” incomes. According to “Argument in Favor of Measure Q” signed by the current members of the Council, the measure will increase the average tax by $12 per month, per residence.
Also on the ballot is Measure S, a “Real Property Transfer Tax” advocated as a means to “make Albany more equitable” (“Argument in Favor of Measure S”; https://www.albanyca.gov/files/assets/city/v/1/city-clerk/documents/elections/2026-election/ballot-measures/arguments-and-rebuttals/primary-arguments/measure-s-real-property-transfer-tax-in-favor.pdf). According to the “City Attorney’s Impartial Analysis,” the change from the universal 1.5% property transfer tax rate to a five-tiered structure is estimated to bring in another $1,000,000 in revenue each year.
There are a few rounds of arguments for and against Measure S on the Albany city website. For each measure on the November ballot, the City Council presents a letter of “Argument in Favor” signed by all council members. The “Argument in Favor of Measure S” attributes the need for the measure to Proposition 13, voted into law in 1978:
Why does Albany need Measure S and so many other taxes? In 1978, California voters passed Proposition 13, rolling back and limiting annual local taxes on property value to 1%, cutting revenue in half overnight. Proposition 13 also limited the increase in property value for tax purposes to 2% a year.
The Council explains that without the “periodical approval of tax adjustments, the City would fall financially behind, necessitating cutting services and events and eventually contracting out or cutting public safety.” The Council claims that “Albany runs efficiently” and provides some numbers for the sake of comparison:
Albany runs efficiently. Its budgeted spending this year is $36 million. Piedmont’s budget is the same but for half the population. Emeryville’s budget is three eighths larger ($63 million) for a bit over half Albany’s population. El Cerrito’s budget is larger by more than half ($58 million) even though its population is only a quarter larger than Albany’s.
Finally, the summary sentence in the Council’s “Rebuttal to Argument Against Measure S” argues:
Measure S is a reasonable approach to compensate for a small part of the effects of Proposition 13 while making Albany’s property transfer tax fairer.
The argument attributes the need to raise taxes to a proposition long since passed into law by a majority of California voters, including those represented by the Council. And again, the argument equates what is likely to be an unpopular tax increase with the equity we believe we should share. In the end, the equation complicates the evaluation of the package. The remainder of this writing takes a closer look at some of Albany’s budgetary constraints.
I don’t know the in’s and out’s of city budgets. I suspect this is true of many candidates for office. If elected, I will rely upon the advice of those hired to provide financial expertise to the Council. But AI does make it easier to wade into the complexity of a city budget. The analysis that follows relies heavily on the use of ChatGPT to compare the cities of Albany, Piedmont, Emeryville and El Cerrito. I must note that AI does make mistakes, however, the information that follows is drawn from what ChatGPT has “learned” about municipal economics and accounting practices as well as from the review of relevant documentation.
♦
The Council’s argument compares four neighboring cities with different populations. It’s a comparison that falls apart when you consider differences in fiscal structure. ChatGPT broadly differentiates between the four cities:
- Piedmont: Small population + enormous residential property values + parcel tax + transfer tax + almost no sales tax.
- Emeryville: Small population + enormous commercial economy + business/sales/hotel/card-room revenue.
- El Cerrito: Larger population + significant property base + much larger sales-tax stream than Albany.
- Albany: Larger residential population than Piedmont or Emeryville, but without either Piedmont’s exceptionally valuable residential-property base or Emeryville’s exceptionally large commercial tax base.
The following table describes the impact of these differences in the cities’ General Fund revenues.
| City | Particularly revealing FY2025–26 General Fund revenues | What it suggests |
| Albany | Property tax $10.63M; sales/use tax $4.89M | Significant dependence on property tax; meaningful but smaller sales-tax base |
| Piedmont | Property tax ~$19.90M; property-transfer tax $3.80M; parcel tax $3.23M; sales tax only $0.23M; business-license tax $0.41M | Overwhelmingly residential/property-oriented |
| El Cerrito | Property-related taxes roughly $21.3M including transfer tax; sales taxes roughly $9.20M; business-license tax $1.21M; utility-users tax $3.70M | Considerably more diversified than Albany/Piedmont, particularly through sales taxes |
| Emeryville | Property tax 12% of GF revenue; sales tax 16%; business-license tax 14%; hotel tax 12%; card-room tax 4% | Extraordinary commercial/non-resident revenue base relative to the population |
Basically, Albany cannot compete with “the unusually powerful revenue engines” of Piedmont, El Cerrito, or Emeryville:
- Piedmont: Extraordinarily valuable residential property base + substantial voter-approved property/parcel taxation.
- El Cerrito: Larger population and considerably more diversified tax base.
- Emeryville: Extraordinary commercial/business/hotel/sales-tax base. Its FY25–26 revenue mix confirms how little it resembles Albany fiscally.
- Albany: Smaller residential city with some commercial/sales-tax activity, but nothing approaching Emeryville’s commercial engine or Piedmont’s property-tax yield.
These cities also differ in the provisioning of municipal services. For example, Albany keeps services in-house and offsets the cost of police dispatch by selling dispatch services to Kensington. El Cerrito offsets the cost of its fire department by extending fire protection services to Kensington. In contrast, Emeryville contracts with Alameda County Fire for fire protection.
These differences show that it’s not whether one city spends less or more than another city. It’s about the services we choose to provide and whether we choose to provide services directly or through regional partnerships or contracts.
ChatGPT concludes that Albany is “a small, relatively full-service city with limited economies of scale and a comparatively constrained revenue base.” The net effect is a trend toward structural imbalance:
longstanding revenue constraints + particular local tax base + small-city scale + service choices + compensation growth + current pension costs + legacy pension debt + actuarial/market experience + prior funding choices = projected structural imbalance.
This equation includes the costs of current and legacy pension plans—not an uncommon scenario. Piedmont, El Cerrito and Albany have this in common. What’s different is how each city handles the transition from the old pension plan to the new one.
Piedmont’s legacy police and fire plan is “extraordinarily well funded.” This is not surprising for a city that pulls in substantial revenue between its residential property base and voter support for hefty property taxation. In 2018, for example, Piedmont’s legacy plan assets amounted to six times the remaining liability. No contribution was required.
El Cerrito tells a different story. The municipal pension plan was first closed, then unfunded, and then operated on a “pay-as-you-go” basis out of the General Fund. El Cerrito’s statements reflect annual contributions of 100% for the audited years. The plan ended in 2025 after the last of the beneficiaries died.
Albany’s handling of its closed police and fire pension plan contrasts strongly with that of the other two cities. Albany’s legacy plan was once fully funded and then underfunded. The plan continues to hold assets and to receive actuarial funding with current contributions that amount to about half of the actuarially determined yearly cost.
The FY2025 audit reports the following contributions and deficiencies.
| FY | Actuarially determined amount | Albany actually contributed | Reported deficiency |
|---|---|---|---|
| 2021 | $844,500 | $218,723 | $625,777 |
| 2022 | $844,500 | $847,799 | ($3,299) excess |
| 2023 | $1,038,051 | $500,000 | $538,051 |
| 2024 | $1,023,773 | $500,000 | $523,773 |
| 2025 | $1,023,773 | $500,000 | $523,773 |
Audited schedules further show deficiencies of $82,401 in 2016 and 2017. Given the FY2022 excess of $3,299, the deficiencies from FY2016 to FY2025 total about $2.373 million (City of Albany, California Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2024).
The analysis concludes that the consistent withholding of fees to support the legacy pension plan is a matter of policy. Failure to pay the actuarially determined amount each year decreases investment and limits returns that could help to defray costs. Overall, the analysis found that “a substantial portion of the pension pressure on the General Fund is debt service on pension benefits accrued in the past.”
The decisions Albany City officials make on how much and when to fund pension obligations are subject to the Albany City Charter, to the rules of the pension plans we adopt, to actuarial requirements and to other law. These are not choices that Albany voters make. But paying less than the actuarially determined amounts can become intergenerational debt that increases the funding burden for those who come later.
Albany’s legacy pension plan remains underfunded while CalPERS—the newer plan—is funded consistently. In addition, Albany maintains reserves against future CalPERS cost increases. It is this history of pension funding decisions that ChatGPT suggests “deserves scrutiny.”
♦
Thirty years after its passage, Proposition 13 is state law and an operating constraint shared by cities across the state, including El Cerrito, Piedmont, and Emeryville. In the upcoming election, Californians will vote on Proposition 43, touted as a “local Taxpayer Protection Act to Save Proposition 13.” If voted into law, Proposition 43 reaffirms the intention of the voters to limit tax increases. Through the lens of a budget balanced within applicable constraints, the ChatGPT comparison reveals the importance of budgeted items including municipal services and pensions as well as how we choose to operate them. The ChatGPT analysis shows that Albany suffers from a “small-city economy-of-scale problem.”
I’m troubled by the tendency of our elected officials to attribute budget shortfalls to measures long since enacted into law. State law is a basic constraint we work within. The law is a fundamental constraint within which our elected officials must operate.
Blame creates divisiveness. With division comes exclusion and even a belief that those who benefit from Proposition 13 are less valuable residents entitled to less. It’s not much different than a belief that those who qualify for Section 8 or low-income housing don’t deserve the same civil rights as the rest of us. What’s worse is that this kind of division might encourage real estate scams intended to expel the owners of Proposition 13 houses and force properties onto the market. The end result is not affordability. It is gentrification.
As a woman who inherited her childhood home in Albany, this is something I know. Proposition 13 is not the cause of all that ails Albany, nor is it the cause of whatever ails California. If there was no Proposition 13, there would still be a housing crisis. All you have to do to know that is to look at any other state where housing inventory is low and speculation high, where tenants are treated like they carry their homes on their backs, and where homeowners give up the dream and still can’t afford to rent. ■