Permanent sales tax increase heads to March ballot

Long Beach voters officially have another decision to make in March: The City Council voted Tuesday night to allow voters to decide whether to permanently extend a sales-tax increase approved three years ago.

Measure A was supposed to expire after 10 years, and City Hall officials campaigned on the premise that it was temporary. But now they’re asking Long Beach voters to extend it in perpetuity.

The revenue from Measure A, which is expected to generate about $60 million annually over the next three years, has propelled Long Beach into a growing group of cities that have come up against the state’s cap on local taxes at 10.25%.

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However, the tax increase would drop by half at the six-year mark. The reduced revenue and its eventual sunset date could pose problems for local leaders who say they would likely have to make cuts to the numbers of police and fire employees they’ve hired with Measure A funds since its passage in 2016.

Mayor Robert Garcia said last month that the move to ask voters to extend the tax was also preemptive to ensure that Long Beach tax payers’ money stays in the city. He said that while the Long Beach tax is set to end on Jan. 1, 2027, other local agencies would likely pursue tax increase of their own that could fill the void left by Measure A’s expiration.

“We look forward to ensuring that these resources stay in Long Beach and don’t go to other outside agencies and I think that’s critical for us moving forward,” Garcia said.

As part of the vote the City Council had to declare an emergency in order for the item to qualify for the March 3 ballot. The earlier date allows the city to pass a sales-tax measure before the county or other agency pursues one next year.

At a meeting earlier this month, Assistant City Manager Tom Modica said that if another agency passed a tax increase before the city Long Beach, taxpayers would be sending their money out of the city, potentially to the county or to the Southern California Air Quality Management District, which is expected to pursue a tax increase next year to fight air pollution.

If voters were to approve the extension, the new tax rate of Measure A would be adjusted to 1% from January 2017 through December 2022. It would then decrease to .75% from January 2023 through September 2027 to allow for the city to pay into the countywide tax also passed in 2016 to raise revenue to battle the homelessness crisis in the county.

After October 2027 the tax would rise again to 1% until a future City Council lowered or completely did away with the tax or a resident initiative was placed on a future ballot to remove the tax. The city’s tax payers would be shielded from paying any future taxes that push Long Beach’s total tax rate over 10.25% if Measure A were to be extended.

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City officials have pointed to the roughly $88 million that the measure has generated since its passage in 2016 that has gone toward funding park restorations and road improvements throughout the city as well as helping expand the public safety personnel ranks.

However, this time around city leaders say that the funding could go toward funding its half of a deal it struck to help re-open Community Hospital. In that deal that the city must pay upward of $25 million over the course of the next 15 years.

Those funds have not been worked into the budget and members of the council have said that Measure A’s extension could help secure the revenue needed to ensure that the city’s have of the Community Hospital seismic retrofit would be covered.

The vote to place the issue on the ballot went unopposed by the public. The deadline to submit formal arguments against the extension of Measure A has been set for Dec. 13 at 4:30 p.m. and the deadline for rebuttal arguments was set for Dec. 23 at 4:30 p.m.

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Jason Ruiz covers City Hall and politics for the Long Beach Post.
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