Legislation is pending in Albany that would allow Long Beach to borrow up to $15 million in serial bonds in order to pay down its $10.5 million deficit over ten years, after the City Council on May 22 voted to submit a home rule request to the State Legislature.
That vote came the same night the council adopted a $87.9 million budget for 2012-13, representing a 7.9 percent tax increase instead of 16 percent. After Assemblyman Harvey Weisenberg, D-Long Beach, and Senate Majority Leader Dean Skelos, R-Rockville Centre, introduced the bond bill and expressed confidence that lawmakers would approve the legislation, the city said it was able to revise and adopt the spending plan that represents a 2.6 percent tax levy increase and a 5.3 percent deficit reduction surcharge for three years, down from 4.1 and 11.9 percent respectively from the original proposal, according to the Long Beach Herald.
Weisenberg said about the pending legislation that he expects will pass before the current session ends later this month:
“I anticipate that this bill should be passed in the next two weeks. If we don’t stretch this out over a 10-year period, it would have meant a 16 percent tax increase, and we would lose hundreds of jobs.”
But Councilman Michael Fagen said that, while he’s sure Weisenberg’s intentions are noble, the facts are flawed. He contends that the administration is laying off close to a hundred people anyway while increasing the budget. He believes cutting spending first would have been the appropriate measure, and maintains that the bill only “kicks the can down the road.”
“The city will now assume the Adelson tax increase, which will hit the taxpayers for more than five percent annually for 10 years,” Fagen added. “That will not include any contingencies that may arise, nor replenishment of the rainy day fund.”
The bond proposal comes after the City Council voted unanimously in March to approve a $6 million revenue anticipation note — a short-term debt security issued in anticipation that revenues will meet the city’s repayment obligation — in order to cover payroll, maintain essential city services and help close the deficit to balance the budget before the end of the fiscal year on June 30.