The Long Beach City Council Tuesday night unanimously approved a significantly reduced 2023-24 budget, replacing one it proposed late last month, now with a lower tax rate and, as a result, reduced taxes for homeowners.
The council reduced the original proposed tax rate of 12.39 percent to 9.97 percent.
The council was under extreme pressure from residents, who had turned out in large numbers at meetings to complain about the initial tax rate. The tax increase for the average homeowner will now be $462, down from $574 under the original proposal.
Asked on Wednesday whether the reductions could not have been made earlier, acting City Manager Ron Walsh said, “Constructing a budget is an art form. We sharpened our pencils and sat down with the department heads to see what we could do.”
Asked if the reductions were the result of public pressure, Walsh said, “It was in response to public concerns.”
Some residents said they believed the reductions could have been made much sooner. But, Councilman Roy Lester said, “It took a meeting of the minds.”
The reductions were listed in an amendment to the budget called Errata, for errors and corrections.
Council members and city administrators said they were able to reduce the original proposed budget by eliminating or delaying hiring for some key positions; making cuts in several departments, including police, public works, the central garage and municipal buildings; and saving on fringe benefits based on new information from the state.
“The entire tax increase is due to the Haberman case, which goes back to the 1980s,” the city said in a statement. “There was no way to avoid this.
“To be clear,” the statement added, “if it wasn’t for the Haberman settlement, there would be no tax increase this year.”
The statement was referring to a $150 million suit filed against the city by the Manhattan developer Sinclair Haberman, whose project to build expensive oceanfront condos was thwarted. Haberman sued, and was awarded a $150 million judgment. Last year the city negotiated the settlement down to $75 million, but it must pay Haberman $5.5 million a year for the next 30 years.
“The elephant in the room is the Haberman settlement,” City Council president John Bendo said. “We had to pay the developer. We zeroed out all of the tax increases except for Haberman.
“Hearing your taxes are going up is not great news,” Bendo added. “But it was out of our control.”
In the new spending plan, the police department will cut $50,000 in expenses. Walsh said the department would delay some hiring “to save money for the city.”
Long Beach also got some good news from Albany: It will not have to pay the state $130,000 in pension costs, due to a miscalculation by the state, city Treasurer Inna Reznik said. Reznik also explained that the city would save money by not hiring a comptroller or a city planner. Long Beach is also negotiating with its professional firefighters, who have been working without a contract since 2010. Their overtime pay has been an issue for some residents, who have described it as excessive.
Ron Pagnini, a former Civil Service Employees Association official, raised the issue again Tuesday night. He complimented the City Council on the budget reduction, but added, referring to the professional firefighters, “I’m not going to have any union put a gun to my head. It doesn’t work. They make good salaries.” He asked that the firefighters “give back some.”
Councilwoman Tina Posterli noted that the council and the city administration had worked hard to come up with the budget reductions. “We also feel very grateful to the residents who came forward to give their feedback,” she said.