Long Beach residents could be facing a double-digit tax hike in the coming fiscal year. The increase is primarily the result of a $5.5 million down payment on a $75 settlement with Manhattan developer Sinclair Haberman, who was thwarted in his attempt to build oceanfront condominiums decades ago.
Police and professional firefighter overtime costs are also an issue, as is rising inflation.
At a special work session last Saturday morning, city officials said the tax increase in fiscal year 2024, which beings July 1, could be as high as 11 percent. Comptroller Inna Reznik said that Long Beach must begin making payments to Haberman, and the first one would cost the average Long Beach homeowner about $610.
“The City Council is struggling to reduce costs to city residents, and the process is long and difficult but the job will get done,” said Acting City Manager Ron Walsh, who is also the city’s police commissioner. “We’re trying to fix things, but money has to be raised.”
The settlement with Haberman, which the City Council agreed to last April, will be paid out over the next 30 years. Next fiscal year, Reznik said, the payment will be about $4.8 million.
City officials are trying to find ways to reduce the tax rate, with council members suggesting ways to cut spending.
Councilwoman Karen McInnis suggested that, for the next fiscal year only, the city forgo the fall festival, fireworks and beach concerts, plan fewer garbage pickups on the beach in the summer — and possibly for all homes and businesses — reduce hours at the Ocean Beach Park as well as city bus routes, and speed up the implementation of parking meters.
McInnis and other council members stressed that at this point, all suggestions are little more than that, and that the council will be working on the budget for weeks before any figures are formally presented to the public.
“When I look at our residents, I say, What am I going to cut?” McInnis said.
“We have to decide what we can do without,” Council President John Bendo said.
Councilwoman Tina Posterli suggested taxing the city’s growing number of Airbnbs.
The city’s current budget is $95.5 million, up from $93.6 million in fiscal year 2022. The current budget has a tax rate of 4.96 percent, slightly higher that last year’s 4.87 percent.
The next budget looks far different at this point, because of the Haberman levy. The developer originally sued the city for $150 million, saying Long Beach officials failed to support his bid to build oceanfront condos with the Zoning Board of Appeals.
The city settled for $75 million, and was forced to issue bonds to raise the money. The city’s history with Haberman is long and complex, dating back 40 years, to one of Long Beach’s earliest efforts to fill the then-vacant Superblock.
Corey Klein, a former corporation counsel who worked to settle the Haberman suit and is now a Long Beach city judge, declined to comment earlier this week.
The city is also dealing with rising police and professional firefighter overtime costs.
It also faces the annual challenge of funding operations in Ocean Beach Park — which costs about $5 million per year to maintain — at a time when beach attendance is declining.
Ron Paganini, a one-time candidate for City Council and a former CSEA union leader, said he was most concerned about the overtime pay for police and professional firefighters, a situation he said must be rectified in order for the city to reduce taxes.
“They have to deal with the firefighters,” Paganini said, referring to the City Council. “If we can knock off some of that overtime, we’re good.”
Sam Pinto, president of the firefighters union, said that most of the calls to the department are requests for ambulances, and added that more paramedics are needed, not fewer.