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Amnesia File / Perspective

City Council Imposed 16% Business License Surcharge Saying It Would Provide These Major Infrastructure Traffic Projects But Never Provided Them Despite Maps, Lists and Public Meetings; It Was General Fund Money All Along That City Could And Did Spend As It Wished


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(May 31, 2016, 1:45 p.m.) -- Mayor Robert Garcia routinely omits it from his narrative blaming LB taxpayers for not providing City Hall with additional tax revenue for decades...but in 1991, LB's City Council imposed (without bothering with a ballot measure) a whopping 16% surcharge on LB business licenses, telling the public it would provide traffic infrastructure projects including grade separations (one street going under another.) The Council action capped a largely City Hall driven process that included "blue ribbon" style committees and community meetings, amplified by news stories claiming projected traffic increases required the projects to avoid gridlock.

Leading up to the action, city staff released maps and lists showing multiple projects that would be part of City Hall's "Traffic Mitigation Program" provided by the 16% business license surcharge. Hoping to silence doubters, city officials included the biggest projects in the Transportation Element of LB's General Plan in 1992, itemizing them (with timelines and completion dates) at the Iron Triangle (PCH/7th/Bellflower), the Traffic Circle, Lakewood/Spring and Ocean/Alamitos.

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LBREPORT.com wasn't around at the time (we launched in August 2000) to point out that nothing in the tax ordinance legally required City Hall to deliver any of the enumerated traffic projects. From City Hall's perspective, the money was simply general fund revenue, which City Hall could spend in any ways the Council desired.

The Press-Telegram published the City Hall-created maps and lists and editorially supported the Business License surcharge.

The results were predictable.

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Within just a few years, the Council voted to approve new developments at Lakewood/Spring (a UPS facility at the SW corner in Dec. 1996 and a Marriott Hotel expansion at the SE corner in 1999.) that invited increased traffic, despite City Hall's supposed commitment to apply the 16% business license surcharge to reduce traffic. At a hearing on the UPS project, then-Councilman Del Roosevelt dismissed public concern that the Lakewood/Spring grade separation wouldn't be built. "Nonsense," he called public skepticism at the time. Three years later, he voted with the City Council to delete the Lakewood/Spring grade separation traffic mitigation project from lists of city planned projects, following a city staff request to do so on grounds traffic hadn't grown as much "as planned."

The Council action erasing the ELB project enabled City Hall to shift funding to a downtown pedestrian walkway and two other projects unlikely to ease street traffic (some 710 freeway signage and a longer 605 freeway off ramp emptying traffic onto Spring Street). City staff continued to claim the downtown walkway (which a city staff report described as alongside a then-planned D'Orsay luxury hotel) would have transportation benefits because it would "support transit use through linkages to the Transit Mall" and encourage development and business location "within walking distance of the most heavily served by transit [sic] area of the City." The walkway, between Ocean Blvd. and Third St., is now part of The Promenade which, whatever its benefits, has nothing to do with the traffic easing projects that City Hall promised the public with the 16% business license surcharge.

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City Hall did much the same when a developer proposed one of the highest high rises in Long Beach history at the NW corner of Alamitos Ave. and Ocean Blvd. The high rise virtually ensured that a grade separation would be impossible at that location and one savvy EIR commenter asked about the previously planned grade separation. Her comment forced a public acknowledgement in the EIR reply that the Ocean/Alamitos grade separation was infeasible from the begriming...although City Hall had for years been pocketing the 16% business license surcharge on the pretext of delivering the project.

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Under Mayor O'Neill, the Council explicitly granted city management increased flexibility in using the 16% business license surcharge (although it was already General Fund money). City management has since said, and we have no information to contradict it, that it has applied the 16% surcharge to fund a number of smaller and medium size infrastructure items. These have included small items like landscaping, medians and the like; other projects were medium size, including adding traffic lanes in recent years at PCH/2nd St.

One of the undelivered grade separations has survived on-paper. The City Council recently approved a "Mobility" Element (the new term for the Transportation Element) that includes an envisioned grade separation at the Iron Triangle (PCH/Bellflower/7th).

City Hall previously listed the 16% business license surcharge separately on business license bills, but in recent years it erased that text. Reflecting the view of city management and with City Council approval, City Hall no longer lists the business license surcharge separately when it sends out business license bills; the sum is now quietly embedded within the annual business license charge.

Shortly after 8:00 p.m. on June 7, Long Beach will learn after a nearly $400,000 campaign funded mainly by corporate, organized labor and other special interests, whether 50%+1 LB voters voted for a City Hall written ballot measure that will raise LB's sales tax to 10% (currently 9% in Lakewood/Signal Hill and 8% in most OC cities.) While the campaign was underway, city staff released maps and lists of infrastructure projects that it says could result from "new revenue" (like the kind that would result from the City Hall ballot measure.) Measure A carries a Council-approved ballot title and text listing police, fire and infrastructure items but is legally a general sales tax increase that current and future Councils could legally spend on any general fund projects they wish.

LBREPORT.com will provide LIVE coverage of election returns on Tuesday June 7, starting at 8:00 p.m.



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