Proposed $95.5M Long Beach budget calls for 5% tax increase

Long Beach is proposing a $95.5 million budget with a 5% tax increase, which would increase a homeowner's tax bill by an estimated $219 a year, city officials said.

The 2022-2023 spending plan will budget for $2.5 million in separation pay for the first time in more than a decade as city officials look to avoid issuing bonds and adding to its long-term debt.

The tax increase is needed to balance the budget without borrowing for separation pay and employee expenses, City Comptroller Inna Reznik said. She said this was the first year the city could afford to budget for separation pay after improving city finances and recovering from the COVID-19 pandemic.

“This is going to be our hardest budget year by not borrowing for separation pay. Future years should be much better,” City Manager Donna Gayden said. “Department managers are really cognizant that this is the year to include termination pay in operating expenses.”

The budget, which takes effect July 1, must be approved by the end of May.

Gayden has said the city has nearly $500 million in long-term debt and obligations including $2.1 million in outstanding payments owed for previous retirements this year and an additional $400,000 owed for new retirements this year.

Officials said payouts include time owed to longtime city employees, and police and firefighters, but recent arbitration decisions with the PBA and an agreement with the police commanding officers association will cap payouts for new officers and future retirements. Credit agencies have repeatedly criticized the city for borrowing to pay operational expenses like separation pay.

This year’s budget does not include a $75 million settlement with oceanfront apartment developer Sinclair Haberman.

Payments for the settlement will begin next year, which must be paid over 30 years as it is absorbed into the budget and could lead to additional property taxes for residents. The city last week approved the settlement, cutting a $150 million judgment in half for a decades-old legal dispute.

The budget is also contingent on raising costs for the annual beach passes this summer by $15 to $25 to help meet projected beach revenue of $5 million to offset the annual expenses of operating and maintaining the beach, Reznik said.

City Council members are considering a separate resolution that would raise annual beach passes to $85 for residents and $170 annually for visitors. Annual family passes would be raised to $115 for residents and $230 for visitors.

Daily individual passes would be unchanged at $12, for residents, to $15 for visitors. 

The city hopes to increase revenue as beach and other events return to pre-pandemic levels. The beach fee increases are equivalent to avoiding an additional $85 tax increase, Reznik said.

The budget does not plan to borrow from the city’s reserves or contribute to its $3.5 million liquid fund balance. The city borrowed $4.7 million last year to balance the budget and fund revenue loss and expenses related to the pandemic.

“It’s important the public realizes we are moving ahead and we are in a better place,” Gayden said.

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.