Long Beach officials aim to break tax cap

Long Beach's financial woes will require the city to override the state's tax cap, city officials said Tuesday.

The cash-strapped city, which is dealing with a projected $10.25 million deficit for the fiscal year, will seek to pierce the state's 2 percent cap -- in place for the first time this year -- on May 15.

Long Beach is considering a 2012-13 budget that carries a 4.1 percent increase to the tax levy. Additionally, the city may pay $3.3 million annually for three years to pay down the deficit -- a move that could cause an additional temporary tax increase of 11.9 percent every year for three years.

The two tax increases would raise Long Beach taxes by about $430, to $2,904, for the owner of an average home next year.

The city council voted unanimously Tuesday to hold a required public hearing about the proposed override on May 15. The override is necessary for Long Beach to address its deficit, which is about one-eighth the size the city's budget, officials said.

"You've got to take your medicine," said City Manager Jack Schnirman.

City officials need to pierce the tax cap because of the city's "inherited deficit," which must be reduced through a tax increase and spending cuts, documents filed at City Hall state.

The city's budget proposal cuts more than $1.78 million from city departments' spending. But Long Beach still needs a combination of union givebacks and increased property tax revenue to avoid an even steeper tax increase or heavy layoffs of city workers, city officials have said.

Long Beach's grim financial picture came into focus in March when city officials projected the $10.25 million deficit. The city ended 2010-11 with a $107,000 surplus. Moody's Investors Services also downgraded the city's bond rating to BAA3 -- a step above junk-bond status -- in December.

Many Long Island municipalities, including more than a third of the island's villages, have passed similar resolutions to override the state's tax cap.

The public hearing about the override plan will be held at City Hall on May 15 at 7 p.m. Public budget hearings are also scheduled for May 15 and May 22 at 7 p.m. at City Hall, 1 West Chester St.