City looks to borrow $12 million
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Last June, legislation that would have allowed Long Beach to issue millions of dollars in serial bonds to pay down a $10.25 million deficit over 10 years — built in to the $87.9 million budget that was approved last May — died in the State Senate after passing in the Assembly. As a result, in September the City Council approved a three-year, 6.6 percent deficit-reduction surcharge that appeared on residents’ tax bills. That brought the total tax increase to 14.5 percent, and raised taxes on the average home in the city, valued at just under $466,000, by $402, to $2,877.
City officials, however, continued to call on Senate Majority Leader Dean Skelos — who had criticized the city for borrowing rather than doing more to cut costs — to revisit the legislation, saying that it would allow the city to reduce its deficit surcharge by more than half and spread the payments over 10 years at a lower interest rate.
“This would provide tax relief to the residents going forward to help roll back the surcharge we put in place …,” Schnirman said.
Asked whether he would support the bill this time around, Skelos issued a statement saying, “In light of the devastation that occurred as a result of Hurricane Sandy, we’re looking to give local governments the tools they need to recover. All options are on the table.”
Some residents asked how the city would determine the actual amount to be borrowed for both Sandy expenses and deficit financing. Though the city’s portion of the storm-related costs is still unknown, Schnirman said that the state would determine the city’s actual deficit after an audit. That process, he said, was set back by the storm, and it was too early to say how much would be used to offset the deficit and storm costs.
“The estimate is $12 million,” he said. “If it’s more, if it’s less, that’s to be determined by [the state]. The state comptroller’s audit hasn’t taken place yet. This resolution … would trigger a state comptroller’s audit that would certify … what we could borrow. The alternative would be for the city to pay for whatever the costs of the storm are upfront through tax revenue or cuts.”