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Mostly Cloudy Taxes jump in proposed Long Beach city budget
Levy, deficit-reduction surcharge add up to 16 percent hike
The city released a summary of its proposed 2012-13 budget on Tuesday, an $87.9 million spending plan that includes “significant” spending cuts and no layoffs, but comes with a 4.1 percent tax levy increase and an 11.9 percent “deficit reduction” surcharge to help close the city’s $10.2 million deficit.
A line-by-line budget was not ready to be released as the Herald went to press, but the city posted a spending “blueprint” on its website Tuesday evening, described as a framework for balancing the budget.
City Manager Jack Schnirman said that the city is facing tough choices over the next several weeks as it contends with the deficit as well as a fiscal crisis, and seeks to avoid a further credit-rating downgrade by Moody’s Investors Service.
The main increases in the budget include rising pension costs, Schnirman said, and the plan includes a payment of approximately $4 million to reduce the projected 2011-12 deficit.
“This is a drastically pared down, bare-bones budget that reduces spending and personnel costs below 2011 levels,” Schnirman said. “The main increases are fixed costs, such as paying off the deficit and pension costs, but everything else goes down.”
The spending plan, which is $4.3 million larger than the current budget, reduces discretionary spending as well as personnel costs, slashing $1.78 million, or 12 percent, from departmental requests. Additionally, to help alleviate the deficit, departmental spending was cut, netting a savings of approximately $920,000 (see story, page 5).
Among other savings, the administration said it has recently initiated a $635,000 reduction in salaries, achieved in part by cutting the number of management positions. The city has also cut overtime in a number of departments.
But according to the summary, in order to provide the additional revenue required to balance the budget, the proposal includes a “modest” 4.1 percent increase in the general fund tax levy. Additionally, the city will pay down its $10 million deficit over three years with a temporary “inherited deficit reduction surcharge,” which would equate to an 11.9 percent tax increase.
