City proposes double-digit increase in taxes

The City of Long Beach has proposed a 2023-24 budget with a 12.74 percent tax rate — the highest in several years and more than double the current 5 percent. The proposed spending plan totals $102.9 million, up from this year’s $95.5 million. The budget was released late last week.

The proposed double-digit tax rate is primarily the result of a $75 million settlement with the developer Sinclair Haberman, who filed suit after the construction of a building he proposed was blocked. In 2015, the State Supreme Court in Mineola granted Haberman a motion for a default judgment, three years after Long Beach officials failed to file a timely response to the suit’s amended claim for damages in a case that has been wending its way through the courts for 15 years.

The city plans to hold two public hearings on the proposed budget, on May 2 and May 16.

Haberman originally sued the city for $130 million, but over the years the suit grew to $150 million. The city negotiated the settlement down to $75 million, but now must pay Haberman $5 million per year — a financial obligation that has been nicknamed the “Haberman levy.”

The city has stated that the Haberman judgment “was inherited by the current city council and administrative leadership.”

“The buck’s got to stop somewhere,” Ron Walsh, Long Beach’s police commissioner and the acting city manager, said on Monday, “and it stops here.”

The city said in a statement, “The Homestead Tax Rate increase is 12.39% or approximately $574 per the average valued home. The Haberman payment constitutes 83.4% of the Homestead Tax Rate increase. Without Haberman, our increase would be 2.06% or approximately $108 per household. The impact to correct the financial crisis is unfortunate and acknowledged.”

The non-homestead, or commercial, tax rate, is proposed to be just under 44 percent next year, compared with 38.4 this year. The largest commercial taxpayers in the city include KeySpan, Lafayette apartments, which is vacant land, Walton Stewart apartments, and Long Beach Multifamily, also an apartment complex.

Tax rates for homeowners were in the double digits in the early 2000s, and rose as high as 15 percent in 2013.

In its statement, the city blamed “years of inadequate budgeting, poor financial management, and a catastrophic legal judgment all of which combined to create significant financial stress for the City.” It added, “The process of unraveling and correcting years of mismanagement fell to a newly elected City Council and new administration in 2020. Over the next three budget cycles, the City took decisive action and the results are significant.”

The city said it should not face another double-digit tax increase in the next fiscal year, since the levy has been increased to account for the new expense. “This increase is ‘baked in’ to the levy moving forward,” the statement said.

Three of the five members of the City Council — Karen McInnis, Tina Posterli and Liz Treston, all Democrats — are running for re-election this fall. Long Beach Republicans are already launching an attack on the council and the proposed spending plan.

The GOP called the budget “an outrage” and added, “The public will not stand for it.”

The Republicans running for council seats include Brendan Finn, a retired New York City police detective, Chris Fiumara, an entrepreneur, and Michal Reinhart, a fashion company executive.  Patrick Mullaney, a retired New York City Fire Department lieutenant, is running for the seat being vacated by Nassau County Legislator Denise Ford.

“So many senior citizens, families and single people can’t afford to live anymore,” the Republicans said in a statement. “Simply blaming the Haberman decision is a smokescreen for the lack of leadership, wasteful spending, mismanagement and excessive overtime.” Republicans said that the Haberman case “could have been settled for much, much less money, but the city chose not to.

“And now that the judgment came down, they are bragging they reduced it to $75 million,” the statement added.

James Hodge, a former board chairman of the Martin Luther King Center, is also running for a City Council seat.

The city said that its financial position has improved, and that it had been removed from the state comptroller’s list of New York’s most fiscally stressed municipalities. It also said that its last three budgets have been balanced, and that the proposed spending plan did not require borrowing for separation payments. The city has been roundly criticized for some of those separation payments, and has filed suit to claw back some of the money that went to former city employees and officials.

Overtime pay for the city’s firefighters — a bone of contention among some city residents — is up slightly in the proposed budget, to $1.2 million, from $1.19 million this year.

Total pay for the Long Beach Police Department is proposed to be just over $13 million, from just over $9 million this year.

City Council member Roy Lester acknowledged last Friday that he was unhappy with the budget, but added, “We will continue to work on it.”

Resident Ron Paganini, a former Civil Service Employees Association official who frequently speaks at City Council meetings, said that more work needed to be done on the spending plan. “People are not going to be able to afford to live here,” he said.