Long Beach officials propose $93.5M budget with 1.26% tax hike

Long Beach city officials are proposing a $93.5 million budget for the next fiscal year that would raise taxes and fees by about $142 for the average homeowner.

City Manager Jack Schnirman presented the budget during Tuesday’s City Council meeting. It includes a 1.26 percent property tax increase proposed for the fiscal year from July 1 through June 30, 2018.

Another hearing on the proposed budget is to be held at the May 16 City Council meeting before council members vote on the budget.

The budget tax increase meets the state’s 1.26 percent tax cap, equaling an average increase of $56 per homeowner. The rest of the taxpayer increase comes from the city raising annual water fees by $26 and sewer fees by $60 per homeowner to pay for infrastructure improvements related to superstorm Sandy, Schnirman said.

This year’s budget follows last year’s 6.2 percent tax hike, which included a 4.3 percent mandatory annual tax increase for 15 years to pay a court judgment that found the city undervalued the Superblock property when it purchased the development parcel during eminent domain proceedings. The 4.3 percent increase is built into this year’s budget and residents will not see additional tax hikes as a result, officials said.

“Despite rising fixed costs, we’ve merged our fiscal and physical recovery to generate millions in savings to taxpayers and stay within the tax cap this year,” Schnirman said.

The city will increase debt-service interest payments on long-term debt by $1 million to $11.9 million, in addition to $1 million in increased health care costs, $227,199 in contractual raises based on step increases and $350,500 in pension contributions.

Long Beach Civil Service Employees this year agreed to an eight-year contract with no first-year raise in lieu of up to a 2.5 percent raise in subsequent years. That arrangement will save $400,000, city officials said.

The city will save $200,000 on improved bond rating interest and $2 million in early retirement and attrition from 40 positions, Schnirman said. The state comptroller last month listed the city as being under “moderate fiscal stress.”

The city is carrying a $9 million reserve fund into the new fiscal year and will use $637,000 of reserves to pay down long-term debt and interest payments. Schnirman’s office has cited a $24.2 million turnaround from an inherited $14.7 million deficit in 2012.

“This administration’s surplus is paying for another administration’s deficit,” Schnirman 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.