The Long Beach City Council voted Tuesday to break the city’s 3.5 percent tax cap, which opens budget negotiations for a potential 7.9 percent residential tax hike.
The increase in the proposed $97.6 million budget would raise the average homeowner’s tax bill by $300 per year.
Some residents at the public hearing Tuesday said the tax increase would price them out of their homes and make it unaffordable to stay in Long Beach.
"I can't afford to live here anymore," said Eileen Damore, who moved to the city in 2016. "I should have stayed in Queens, but I thought I was coming for a better standard of living. All I can do is pay or put my house up for sale and move out."
The city’s budget does not include any planned layoffs, but a state financial restructuring board and team of financial advisers is conducting a workforce analysis that could later recommend layoffs, officials said.
“I’m not prepared to fire the workforce and guess where we should be cutting,” acting City Manager Rob Agostisi said. “I’m not saying it may not have to happen in the future, but our workers deserve a look in the eye.”
The budget is also being audited by the state comptroller’s office under a 10-year monitoring program.
The comptroller is also expected to release an audit this summer on the city’s practice of bonding for separation payments to current and former workers. The payments are under investigation by the Nassau County district attorney.
The proposed budget includes bonding for $1.7 million in planned retirements, but the city ended its drawdown of accrued time to staff that has not left the city.
The budget includes $586,000 in additional health care costs and more than $1 million in union contractual raises.
Agostisi said the 7.9 percent tax hike is required to bridge a $2.8 million deficit and lay the foundation to help the city recover from nearly a decade of unbalanced budgets.
The tax increase marks the second straight year residents face a tax hike after council members passed an 8.3 percent tax hike last year to address a long-term fiscal crisis.
The city faced a $14.7 million deficit in 2011 and was borrowing to make payroll before superstorm Sandy. Long Beach then received an influx of $102 million in federal aid that masked many of the city’s financial woes until last year.
“In the years after Sandy, the city suppressed tax hikes to every extent possible to allow people to rebuild. We didn’t know if people were going to come back at that time,” Agostisi said. “State and federal funding was used for a number of years to plug the hole of the revenue loss.”
Agostisi said the city should have tried to spread out tax increases as federal funding ran out.
The city previously raised taxes by 12 percent in 2012 and by 25 percent in 2006.
“The city has been locked in a cycle where every few years, some massive adjustment needs to be made to address a structural imbalance,” Agostisi said. “Historically, what we’re seeing is very large tax increases because the number catches up to us. This is what diminishes our financial credibility.”
The next public hearing on the budget is scheduled at 7 p.m. May 21 at City Hall.