Long Beach's City Council Wednesday night approved a special midyear tax increase designed to encourage the State Senate to allow the city to use deficit financing to help solve its fiscal crisis.
The city will charge residents an additional 6.6 percent tax increase, allowing it to pay down its $10.25 million deficit over three years. The tax will last for three years.
The move came four months after the council approved a 7.9 percent tax hike in anticipation of deficit financing, which allows the city to borrow money to pay down the deficit over 10 years at a low interest rate. But the State Senate, which must approve deficit financing, shot down the request in June.
City officials said Long Beach will nix the special tax increase if the Senate approves deficit financing. The Senate meets again in January.
"If there's a debt that I have, it doesn't go away by my ignoring it," council president Len Torres said. "I've got to plan."
The City Council approved the special tax increase by a 3-2 vote, with Councilmen Michael Fagen and John C. McLaughlin opposing the move.
"All I keep seeing is more borrowing and more hits to the taxpayers," Fagen said.
Long Beach officials have called on state Sen. Dean Skelos (R-Rockville Centre), who represents the city in Albany, to advocate for deficit financing, but Skelos has repeatedly said he opposes the idea. He has said the city should focus on spending cuts.
Long Beach Democrats have said they believe Senate Republicans opposed deficit financing because Long Beach is a Democrat-controlled city and Democrats in the Assembly this year opposed a measure to aid Republican-led Nassau County.
City Manager Jack Schnirman pointed to $1.2 million in savings the city identified this month as evidence that it is committed to spending cuts.
"It's just a case of making it easy for the taxpayers," he said.
The May tax increase raised annual city taxes for an average homeowner from $2,475 to $2,694. The figure jumps to $2,877 because of the special tax increase approved last night.
Of the original 7.9 percent tax increase, 2.6 percent was a general fund tax hike and 5.3 percent was a 10-year special tax to pay down the deficit over 10 years.