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Long Beach mulls budget that could raise taxes by 8 percent

Long Beach's proposed $90.4 million budget includes a

Long Beach's proposed $90.4 million budget includes a mandated 4.3 percent annual tax -- $138 a year per average household -- related to a $19 million judgment that the city must pay to the previous Superblock land owners. Above, the Superblock property on Wednesday, Sept. 9, 2015. Credit: Steve Pfost

A budget proposal in Long Beach to cover a shortfall and a $19 million judgment from the Superblock property that the city must pay could raise annual taxes by approximately 8 percent, officials said.

The proposed city budget includes a 3.9 percent tax increase to cover the city’s budget expenses and operations, Long Beach City Manager Jack Schnirman said. That equates to an approximately $126 annual tax increase per household.

Residents are also facing a mandated 4.3 percent annual tax for the next 15 years to cover a 2015 Court of Appeals order that the city owes $19 million to the previous Superblock land owners for undervaluing the property off the boardwalk at Riverside and Long Beach boulevards. That tax equals $138 more in annual taxes per household.

The court judgment is unrelated to the currently proposed apartment building development on the property.

Meanwhile, state Comptroller Thomas DiNapoli’s office has issued its annual budget review of the city’s $90.4 million proposed budget, under a 10-year fiscal monitoring program of the city.

DiNapoli’s office said the city is proposing reasonable budget and revenue projections, but must vote to pierce the city’s .12 percent tax cap.

In the proposed budget, the city will collect $36,440,314 in property taxes and will spend $637,000 from the general fund. The proposed budget also includes approximately $79 million in general fund spending; $5.3 million in spending from the city’s water fund; and $6 million in sewer fund spending. The city and water fund each has a proposed 4 percent fee increase.

City officials said the 4.3 percent Superblock penalty — without a tax increase — would result in $1.4 million in cuts in the budget. Combined with the proposed 3.9 percent tax, that would equal $2.7 million in service cuts and layoffs.

The only alternative to the tax hike, Schnirman said, is for the city to find other sources of revenue, cut departments and city functions, or tap into city reserves and potentially increase the city’s interest rate for issuing future bonds.

“This represents a cost to continue services and an attempt to grapple with finances to continue services as-is,” Schnirman said. “The City Council will be given a menu of options to eliminate a general fund tax increase and allow them to discuss any of those options that are palatable.”

City Council members last week raised beach fees, expected to generate $4.9 million in revenue. The city is also expected to generate $9.3 million in additional garbage charges, representing about a $10 annual increase per property.

City Councilman Len Torres said last week that the council should not tap into the city’s $7 million in reserves, which could risk sending the city back toward bankruptcy.

Schnirman called it “budget morphine” to give the city temporary relief with no solutions.

The City Council will resume budget hearings at Tuesday’s meeting to discuss the proposed tax hike or other options. A vote on the budget could come Tuesday, but is likely to occur during its May 24 meeting, officials said.

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