Proposed Long Beach budget calls for 6.3% tax increase for residents

Long Beach city officials are proposing a $93.6 million budget for fiscal year 2022, with a 6.3% tax increase for residents as the city faces rising pension costs and expenses, some due to the coronavirus pandemic.

City Manager Donna Gayden’s proposed budget would raise property taxes by an average of $283 per home. The city also plans to hike commercial taxes by 12%.

City Council members will hold the first virtual budget hearing Tuesday to consider amendments and will vote on the budget May 11. The City Council must vote to pierce the state’s 1.23% tax cap to cover a $4 million deficit, comptroller Inna Reznik said.

The city is planning to collect $50.5 million in property taxes to balance other revenue shortfalls in fiscal year 2022, which starts July 1, Reznik said.

"We are trying to provide the same excellent services as in the past," she said.

Long Beach had an additional $10 million in expenses last year, about half of which came from responding to the COVID-19 pandemic. The City Council voted to borrow $4.2 million in a short-term bond last year to cover revenue losses and expenses from the pandemic.

City officials are planning on $3.67 million in federal stimulus funding to help repay the bond this year.

The budget calls for paying an additional $1.5 million in FICA payroll taxes, an additional $1 million in pension costs, contractual raises and $260,000 in raises for part-time employees.

City officials also plan to bond $3 million to cover separation pay for expected retirees, which the city cannot afford to budget as expenses.

Officials are using about $1 million from city reserve funds to balance the budget.

Gayden said the city had about $128 million in bonded debt, but the city faced a total of nearly $500 million in other long-term liabilities, including $139 million in outstanding pension and benefit payments, and a looming $131 million judgment the city was ordered to pay developer Sinclair Haberman for planned oceanfront condos.

The city’s debt ceiling, the total amount of money the city can borrow, is about $394.2 million. City Council members voted this month to use $1.5 million to hire financial advisers and restructuring attorneys to stave off bankruptcy.

"It should not take a 100-year crisis to prompt overdue change," Gayden said in her budget. "But with the twin crises of financial peril and the pandemic, we see an opportunity to recast the culture of how our city does business."

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.