Long Beach seeks to trim proposed tax hike
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Long Beach City Council members will seek to trim the city's proposed 2013-14 budget in an attempt to lessen a pending tax increase, council members said Tuesday night.
Long Beach is considering a 2013-14 budget that would raise the tax bill for the owner of an average home by a little more than 2 percent, or $64, to $3,001 annually. The city held the first of two public hearings on the budget Tuesday night at City Hall.
City council member Eileen Goggin said she would like "the city to reduce the tax increase to 1 percent or below that" in light of the financial burden residents face because of superstorm Sandy.
City manager Jack Schnirman said the city will look for more spending cuts, but is challenged by declining revenues.
"As we're cutting costs, our revenues are still dropping," Schnirman said.
The drop in revenue -- to money streams such as beach and park fees -- necessitates the proposed tax increase, Schnirman said.
The city's proposed $83.9 million budget is actually down about 1 percent from the current year's budget. However, the tax levy must rise because of expected losses in revenue, said Schnirman, who attributed the losses to Sandy.
Long Beach's proposed total tax levy increase is 2.16 percent, just below the state's 2.19 percent tax cap for the city.
Schnirman opened his budget proposal by highlighting the proposed $1.1 million reduction in spending from the current budget. The announcement drew cheers from the crowd of about 200 residents.
A few residents spoke during the hearing, with some offering praise for the spending cuts. One resident, John Bendo, said the city needs a contingency plan in case Federal Emergency Management Agency funds for Sandy repairs fall short of need -- not just a plan to borrow.
"It's not really a contingency, it's that they'll borrow money," Bendo said.
The proposed budget would allow the city to move forward with paying down a $10.25 million deficit officials discovered in March 2012, Schnirman said. The deficit would be fully paid off by 2015, he said.
Meanwhile, bond rating agency Moody's "will be watching the city's budget process," Schnirman said. The agency downgraded the city's bond rating to one step above junk-bond status in 2011, before the current administration took office.
The fiscal year starts July 1. The city council must approve the budget by the end of May. It could be approved at a May 21 budget hearing, when council members could also propose amendments to the budget.
The city's annual outside audit, which is six weeks overdue because of Sandy, is also nearing completion, Schnirman said.