Long Beach Council approves city budget with 5% tax hike
Long Beach City Council President Karen McInnis at City Hall on Jan. 8. Credit: Newsday/J. Conrad Williams Jr.
Long Beach City Council members have passed the city's 2022-23 budget, including a 5% tax hike set to take effect July 1.
City Council members voted 4-1 last week to approve the $95.5 million budget and the tax increase equating to an average $219 hike per household. Freshman Councilman Roy Lester was the lone dissenting vote.
Council members said the tax increase was needed to budget for $2.5 million in owed separation pay to retired and former employees, police and firefighters.
City officials said they were following recommendations from the state comptroller and credit agencies that repeatedly criticized the city for issuing bonds annually to pay for separation pay. City leaders said they did not want to add to the city’s debt, which, along with other liabilities and obligations, totals nearly $500 million.
Council President Karen McInnis said the council was following guidance from the state comptroller for the past several years to set a realistic, balanced budget with a fund balance for unexpected expenses or revenue shortfalls.
“I have confidence in this budget and the people of this city,” McInnis said. “I am angry we have to have a tax increase, but I have to remember I have a moral responsibility to pass a responsible budget with no borrowing for separation payments.”
The city budgeted for separation pay for the first time in nearly a decade instead of borrowing, officials said.
A state comptroller’s analysis found the city’s budget projections were reasonable, but exceeded the state’s 2% tax cap. Council members also voted last month to exceed the tax cap.
The city’s operating funds grew by 17% since 2019 and state officials said the council is working to address the city’s poor financial condition, which remains susceptible to fiscal stress, but has improved, according the state comptroller’s office.
Long Beach is projected to spend $4.1 million in overtime this year before the fiscal year ends June 30, exceeding projections by $315,000, according to the state comptroller’s office. State analysts said the city’s paid fire department had exceeded estimates by nearly $400,000 and was set to exceed $1 million by June.
The city’s budget is also contingent on beach revenue projections of $5 million after the city voted to raise the cost of annual beach passes by about $25 to offset the cost of maintaining the beach.
The budget does not account for a $75 million settlement to be paid out to developers for the Sinclair Haberman oceanfront condo development, which the city bonded for and will be required to include in next year’s budget with anticipated additional tax increases.
Lester said he voted against the budget, saying a decade of fiscal mismanagement was being absorbed by taxpayers without cutting costs.
"While I applaud the fact that, for the first time in years, we are not borrowing for separation pay ... the fact that we are told we cannot live within the amount New York State has determined is appropriate for operating a municipality disappoints me greatly,” Lester said.
John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.
