A recovering economy leaves budget officials optimistic about closing the $25.6 million deficit • Long Beach Post News

The Long Beach Recovery Act, passed by the City Council in 2021, provided the city with more than $200 million in state and federal assistance. This paid for tenants’ rent and established a number of programs designed to help local economies recover from the COVID-19 pandemic.

It also included approximately $77 million to replenish the city’s reserves, which were used to cover the unplanned deficits brought on by the pandemic-induced shutdowns. That money is staying around longer because sales tax revenues and a booming real estate market are trending upwards.

A presentation presented to the city’s Budget Oversight Board on Tuesday afternoon said property taxes and sales taxes, the two largest sources of revenue for the city’s General Fund, are both expected to rise next fiscal year. An additional $20.3 million was shown to match the city’s budget. coffers. The city’s fiscal year is he from October to September.

City budget manager Grace Yun said sales taxes are a truly surprising area given that budget planners expected them to be hit hardest during the pandemic.

“Many sales were unaffected. People continued to buy things,” Yoon said, noting that spending on car sales and home improvement projects increased during the pandemic.

Still, the city has to find $25.6 million in savings over the next year. Otherwise, the city’s department could face significant cuts from next year, when funds for rescue efforts are expected to dry up.

City officials said earlier this month they expected the deficit to continue to shrink. repeated on Tuesday.

However, two things have changed since then that could make it harder to balance the 2024 budget. The city lost the lawsuit and had to return her $30.8 million to the water department by September. The city will finally start paying the countywide bill H homeless tax.

The lawsuits surrounding Measure M would reduce the city’s annual contribution to the General Fund by approximately $7.5 million. To pay for the transfer to the water department, city officials said at a press conference last week that they could take loans from the city’s vehicle department rather than issue judgment bonds. bond market.

The 10-year Bill H homeless tax, approved by voters in 2017 to fund homeless services in the county, has benefited Long Beach, but the city’s tax rate has been reduced with passage of Bill A in 2016. City residents have never made a payment because the cap has been reached. .

When Measure A was reapproved and permeated by voters in 2020, the text of the bill called for Measure A to be reduced from 1% to 0.75% for the rest of Measure H.

The city estimates that more than $15 million in funds that could have stayed in Long Beach could end up in the county this year.

Other funds, including a temporary occupancy tax ($2.4 million) collected through hotel stays, are also recovering and budget officials expect to return to pre-pandemic levels in 2024.

Local taxes and fees charged to operators of cannabis businesses in the city are expected to be $12 million this year, up from about $9 million projected earlier this year. However, there is movement within the cannabis industry to reduce these taxes next year.

Aside from an expected budget shortfall next year, Long Beach also has to negotiate a labor contract that expires at the end of September.

Salaries are already projected to increase by $19 million this year, and the city still has to strike a deal with the union of firefighters and police officers. The two departments account for about 58% of the city’s $669 million General Fund budget this year, and future deals for the two departments could include cost-of-living increases.

Long Beach reveals next year’s budget.Here are 5 important points

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