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Entering 2017 / Perspective

Jan. 1, 2017: The Highest Sales Tax Rate Among Neighboring Cities And Among The Highest In CA.


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(Jan. 1, 2017) -- Effective today (Jan. 1, 2017), Long Beach consumers will begin paying the highest sales tax rate among neighboring cities and among the highest in the entire state of California. As of Jan 1, LB's sales tax jumped to 9.75% from 9.0% and as of July 1 it will become 10.25% when an L.A. Countywide half-cent sales tax takes effect, approved by L.A. County voters in Nov. 2016, for Metro-desired projects.)

These rates reflect a decrease in CA's underlying sales and use tax rate, effective Jan. 1, from 7.5% to 7.25% because statewide Prop 30 expired which had imposed a temporary 0.25% sales tax from January 1, 2013 through December 31, 2016.

That means LB consumers are now paying nearly 1% more than last year at this time, and within six months, will be paying 1.25% more in sales taxes.

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The sales tax increase is happening to Long Beach because in early 2016, Long Beach City Councilmembers (we name them below) voted to do what Mayor Robert Garcia (who has no vote) wanted and on Feb. 23 and March 1, 2016 voted to put a "blank check" sales tax increase (Measure A) on a specially-called citywide June election ballot (scheduled at additional taxpayer cost.) The measure is written in a way that lets current and future Councils decide how the tax revenue is spent with no legal guarantees for taxpayers on spending for any specific items. At the same time, Councilmembers voted (8-0, Austin absent) to show voters the following text as residents marked their ballots: :

"[All caps in original] CITY OF LONG BEACH PUBLIC SAFETY, INFRASTRUCTURE REPAIR AND NEIGHBORHOOD SERVICES MEASURE. To maintain 911 emergency response services; increase police, firefighter/paramedic staffing; repair potholes/streets; improve water supplies; and maintain general services.

Voting "Yes" on Feb. 23, 2016 and Mar 1, 2016 to approve the action above were Councilmembers Lena Gonzalez, Suja Lowenthal (exited July 15, 2016), Suzie Price, Daryl Supernaw, Stacy Mungo, Dee Andrews, Roberto Uranga, Al Austin (absent Feb. 24, voted yes on Mar. 1) and Rex Richardson. Detailed coverage of Feb. 24 vote is here.

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LB Councilmembers could have, but didn't, apply the CA Constitution's Prop 13/Prop 218 process that would have given taxpayers legally binding guarantees of how the money would be spent and required voter approval by a taxpayer-protective 2/3 margin. Instead, Councilmembers Daryl Supernaw and Stacy Mungo proposed, and the rest of the Council easily approved, letting the Mayor choose a so-called "oversight" committee with no legal power to change how Councilmembers spend the tax money, without legally enforceable guarantees for taxpayers.

On Feb.23, the Council also adopted a legally non-binding resolution of its "intent" to prioritize spending of the tax icrease as follows:

A. Public Safety: Future TUT revenue may be spent on the costs of providing public safety services, consisting of: police patrol, response, investigation, apprehension and law enforcement, emergency 9-1-1 response, fire prevention and suppression services, paramedic services, and ambulance services.

B. Public Infrastructure: Future TUT revenue may also be spent on the costs of improving and maintaining streets, sidewalks and alleys, improving and upgrading the City's water system for conservation, and improving and upgrading storm waterlstorm drain systems.

The Council's decision not provide Prop 13/Prop 218 legal guarantees for taxpayers, and instead tout legally non-binding, non-guaranteed measures, enabled enactment of the sales tax increase with 50%+1 voter approval.

Despite a $700,000+ campaign with multiple mailers in support without signigicantly funded opposition, City Hall's sales tax increase received less than the 2/3 margin envisioned by Prop 13 and Prop 218, but passing for enactment by a roughly 60%-40% citywide while failing passage in the 5th Council district (Mungo) and by relatively slim margins in the 3rd and 4th districts (Price and Supernaw.) The largest contributors to the campaign committee supporting the sales tax increase were LB's police and firefighter union PACS, whose parent unions were then-engaged in negotiating new contracts with raises that could be funded from revenue from the sales tax increase.

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Also among contributors to the sales tax increase committee were JetBlue Airways (before the election) and Jacobs Engineering (after the election) and Aeroplex Aviation (after the election). LBREPORT.com provided detailed coverage of other sales tax increase contributors at this link.

The sales tax increase measure was supported by former Mayors Foster and O'Neill and the editorial pages of the PressTelegram and Gazettes. To LBREPORT.com's knowledge, no current LB area elected official (City, Sac'to, LBUSD or LBCC) opposed the measure, nor did the LB Area Chamber of Commerce or any LB business association or organized neighborhood group.

Opponents, who lacked financial resources to mount a well-funded opposition campaign, included the grassroots Long Beach Taxpayers Association led by volunteers Tom Stout and Kathy Ryan assisted by a number of area residents. LBREPORT.com covered the campaign in detail, listed the measure's financial contributors and editorially criticized the Council-approved title and text, the Council's refusal to use the Prop 13/Prop 218 process to provide guarantees for taxpayers, the conduct of some neighborhood and civic groups that allowed tax hike supporters to speak without giving the same opportunity to opposition speakers. Retired Councilwoman Gerrie Schipske also spoke/wrote in opposition.

Within 60 days of voter approval of the sales tax increase measure, Mayor Garcia proposed a FY17 budget that would restore only 8 police officers. During budget discussion, the Council added two additional officers for a total of 10 officers restored in FY17 out of roughly 200 erased in Council budgets since FY10. The result leaves Long Beach taxpayers without 95% of the police officers the city had prior to FY10, including the loss of LBPD's field anti-gang unit.

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The Council-passed FY17 budget restored Fire Engine 8 (Belmont Shore) but not Rescue 12 (NLB) or Engine 17 (Stearns Park); restored LBPD's South Division, ending a cost saving combination of South divison + West division; and budgeted overdue street/infrastructure repairs. The vote on City Hall's FY17 budget was 9-0: Yes: Gonzalez, Pearce, Price, Supernaw, Mungo, Andrews, Uranga, Austin and Richardson.

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On November 22, 2016, the Council (motion by Richardson) directed city management to evaluate new revenue from June/Nov. voter-approved tax hikes and "make necessary preparations to restore Rescue 12] with a report due by February 2017 on a "short and long term plan" (i.e. not legally binding] for additional public safety restorations. Richardson's motion didn't specify restoring other police or fire resources for taxpayers; Richardson said his motion allowed for other restorations if fiscally feasible (again with no legal guarantee for taxpayers.)

In early December 2016, city staff acknowledged to the Council's Public Safety Committee (Price, Supernaw, Austin) that there's no plan currently in place -- despite the Measure A sales tax increase -- for further police/fire restorations beyond what the Council approved in its FY17 budget...but said city staff would present options for Council consideration in January 2017. LBREPORT.com coverage here..

And that's not all: As one of her first actions as an L.A. County Supervisor, Janice Hahn voted with her Board colleagues to call a special March 2017 election to seek an additional 0.25% L.A. County sales tax increase for "homeless" issues. If 2/3 of L.A. County voters approve, it would increase LB's sales tax rate to 10.5%. Consumers in Lakewood and Signal Hill will pay 1% less in sales tax for the same items as in Long Beach, and consumers in most OC cities will pay roughly 2% less than in LB.

In addition, LB property owners will pay an additional $25 per $100,000 of their property's assessor-assessed value for LBCC projects (approved by LBCC district voters in June 2016) and another roughly $60 per $100,000 of the assessor-assessed value for LBUSD projects (approved by LBUSD-district voters in Nov. 2016.)

Happy New Year.


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