Proposed Long Beach budget will increase spending by $2.6 million, hike property tax levy by 2.6%

Long Beach’s new city manager is proposing a $104.7 million budget that would raise the property tax levy by 2.6%, a smaller hike than the 10.2% increase adopted last year, budget documents show.

City Manager Daniel Creighton plans to present the budget, the first under the city’s new Republican-majority City Council, on Tuesday night.

The proposed 2024-2025 budget would increase spending by $2.6 million from the 2023-2024 budget of $102.1 million.

The tax hike on "homestead" property would be 1% and increase homeowners’ property tax bill by an average of $53, according to the proposal. The homestead designation for tax purposes applies to certain residential housing such as single-family homes and condominiums not converted to apartments. The budget calls for a 2.3% tax increase on nonhomestead property.

City spokesman John McNally said Monday the levy increase will stay under the tax cap because of how the cap is calculated under the state formula.

The increase in spending is driven by anticipated increases in salaries, rising health insurance and pension costs, and increased liability insurance costs, Creighton said in a message included in the budget proposal.

The city’s finances have improved over the past three years, as reflected in a series of rating upgrades by Moody’s Investors Service that brought Long Beach’s credit rating from Baa3, Moody’s lowest investment grade rating, in 2022 up to A3 in January.

Long Beach’s financial recovery also has been noted by the state comptroller’s office, which in 2020 had designated the city as being under significant fiscal stress. That improved in 2021 and since 2022, the city has been removed from the list of municipalities designated as being under fiscal stress or susceptible to fiscal stress.

The city manager’s salary would increase to $225,000 from $115,000, under the proposal. McNally said the current year budget included only six months' salary for the city manager and the proposed budget includes a full year salary. Last year, the city’s now former police commissioner, Ronald Walsh, also served as acting city manager, with a reduced salary for city manager duties.

The budget must be adopted by May 31 and Long Beach’s fiscal year begins July 1.