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Proposed Long Beach budget raises taxes 7.9 percent

The $97.6 million proposal would cost the average taxpayer about $305 more a year. Officials say operations and services will be maintained.

Rob Agostisi, the Long Beach acting city manager,

Rob Agostisi, the Long Beach acting city manager, is proposing a $97.6 million budget. Photo Credit: Howard Schnapp

A proposed $97.6 million budget in Long Beach would raise taxes by 7.9 percent, or about $305 a year for the average homeowner, city officials said.

The budget maintains staffing and operations and provides the same city programs and services, acting City Manager Rob Agostisi said. He said the city is planning to reassess services and how the city can operate more efficiently.

“What we’re trying to do is rectify a chronic structural imbalance,” he said. “We’re doing as much as we possibly can this year to rectify this issue without overburdening the taxpayers."

The 2019-20 proposal includes a $586,500 increase in health care costs and $1 million more for contractual salary raises. Revenue has decreased by $1.6 million compared with the 2018-19 budget. Officials said they are dealing with the end of some federal and state grants related to disaster recovery and want to focus on more realistic projections. The city last year did not generate the anticipated $225,000 in revenue for hosting events in the city and is not including that in the new proposal.

Agostisi will present the proposed budget to the City Council at its May 7 meeting, when council members can pass amendments to reduce the tax rate. If council members cannot reach a majority vote to pass the budget by May 30, the proposed 7.9 percent tax hike would become permanent.

Long Beach City Council President Anthony Eramo said he would like to see the tax increase “come down significantly.”

The city had relied on federal funding for superstorm Sandy projects to balance budgets, but it can no longer do that going forward, officials have said.

“Sandy masked some of the structural problems the former administration was dealing with and without the influx of federal money, we’re back on the road to recovery,” Eramo said. "You want to take slow steps to recovery, but I don’t think giant tax increases are sustainable.”

The proposed budget also includes bonding for $1.87 million in anticipated retirements. Retirement payouts are expected to be about $80,000 less than last year. Agostisi said the goal is to budget for retirements, but the city first must increase revenue or decrease expenses.

The proposed tax increase adds $2.8 million in new residential taxes. The average homeowner would pay $4,160 in annual city taxes. City officials said the city property taxes account for about 35 percent of residential tax bills; the remaining 65 percent covers school taxes.

The city will seek to increase revenue by launching a marketing initiative to attract more visitors to the beach during the summer season. The campaign will promote the near completion of the U.S. Army Corps shoreline protection project and bank on better summer and weekend weather to boost beach pass sales and daily attendance.

“This will lead to the long-term stabilization of city finances for the benefit of the taxpayers,” Agostisi said. “Ultimately, by adjusting city finances now, we can head off tax increases in the future.”

The City Council hired a consulting firm last week for help with long-term fiscal recovery and is applying for grants from the state financial review board in exchange for state-mandated budgetary reforms.

Taxes are set to go up for a second straight year. The city council passed an 8.3 percent tax increase on a $94.5 million budget for 2018-19, which ends June 30.

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