Decade-Long Homeless Tax Will Benefit Long Beach Even Though It Won’t Pay Until Year Six

 

Los Angeles County voters will decide next month whether to raise the county’s sales tax rate by a quarter-cent with the funds going toward efforts to combat homelessness, but how it will affect cities like Long Beach that are already at the sales-tax threshold was explored last night.

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In advance of the March 7 vote, the Long Beach City Council sought to clarify uncertainties surrounding the county-wide tax that could go into effect July 1. The proposed Measure H is projected to create over $350 million annually over the 10-year life of the increase, which would help shrink the estimated $450 million in annual need that is currently unfunded. The vote would require two-thirds approval by voters to pass.

The measure was introduced by the Los Angeles County Board of Supervisors in December as a way to combat the county’s growing homeless population. At last check, that figure stood at over 47,000 people county-wide who were living on the streets. Long Beach just completed its 2017 homeless count, but figures have yet to be released. However, a 2015 tally showed over 2,300 people were either homeless or in some sort of shelter at that time.


 

Measure H was co-sponsored by one of the newest members of the board of supervisors, Janice Hahn. Hahn, who represents Long Beach, has called the effort a comprehensive plan and the quarter-cent increase necessary to fund the fight against homelessness.

Herlinda Chico, a representative of Hahn’s office, was on hand to advocate for the sales tax measure, noting that taxpayers already pay into services for the homeless pointing to the tens of millions of dollars spent by the Los Angeles County Sheriff’s Department on arrests, jail stays and probation and other costs incurred by healthcare providers. She said the cost to consumers would be minimal but the benefits would be felt county-wide.

“With Measure H we will work to move 45,000 people into permanent housing in five years and help another 30,000 people avoid homelessness,” Chico said. “Voters know that this is no longer a problem isolated to skid row or even the City of LA, encampments are in communities including Long Beach. I know there are some that have reservations about adding more to the sales tax but know that homelessness is already costing taxpayers in ways that are less productive and more painful.”

Last year, Long Beach voters approved its own 10-year sales tax increase in Measure A which increased the city’s rate from nine to 10 percent for six years before dropping it to 9.5 percent for the remaining four years. County voters also approved Measure M in November which raised the county-wide rate by a half cent to improve Metro and transportation projects.

Combined, those two measures put Long Beach at the threshold of sales tax increases (10.5 percent) that can be levied by a local government over the state’s base-rate of 7.5 percent. That figure was capped at three percent by state Assembly Bill 464 in 2015.

Several cities in the county including Pico Rivera, La Mirada, Santa Monica and Compton are in the same boat as Long Beach, and like Long Beach, wouldn’t pay into Measure H until their respective local sales taxes allow for the quarter-cent tax to kick in.

All of these cities are at our local sales tax cap at the moment,” said Diana Tang, the city’s manager of government relations. “So Measure H is written in a way that does not require us to give up any of the sales tax that we’re collecting as a part of Measure A until Measure A decreases in six years to a half cent sales tax at which point in time, in Long Beach, we will be paying the quarter-cent sales tax toward Measure H.”

In the case of Long Beach, that would be six years from now after Measure A dips to the 9.5 percent level. However, that wouldn’t preclude the city from collecting funds generated by the measure during the first six years of its existence. It would also put the city on more competitive footing with neighboring cities that did not increase their sales taxes in recent votes, a concern voiced by some members of the council and business community during the Measure A campaign.


 

How much money Long Beach could receive is yet to be determined. Over the first six years of the tax, if it were to pass, the county would allocate over $2 billion to the region—a chunk of which Long Beach is poised to receive due to its standing as the leader of the second largest continuum of care provider body in the region.

Over the final four years of the tax, when the city does start to contribute, it could very well receive more than the projected $40 million in revenue that it would contribute to the measure.

Long Beach already spends about $11 million on homeless services annually through a variety of programs that provide housing and other assistance, however, the city still declared a homeless state of emergency in July 2016. The investment areas targeted by Measure H include homelessness prevention, subsidizing housing and increasing incomes of affected persons.

The report received wide support from the council and Mayor Robert Garcia praised the writing of the measure for its focus on determining where the money would be best spent rather than the cities from where the funds originated from.

“The payment back into communities is going to be based solely on where the need is,” Garcia said. “They’re not interested in what city might be at ten percent versus a nine percent, they’re interested in solving the crisis that’s happening across the county so that’s where the resources are going to go.”

 



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