Earlier this month, Long Beach City Manager Pat West presented Mayor Robert Garcia city staff’s proposed budget for Fiscal Year 2017, which begins October 1. The mayor has been reviewing the budget and is expected to forward it with his recommendations to the city council during the first week in August.
When the FY 16 budget was approved by the city council last September, the city had estimated an approximate $7.5 million deficit for FY 17 and $7.8 million a year later. Most of the deficit for the next two budgets is due to city pension contributions. But the city also projected oil revenue at $55 a barrel, which has not materialized, further straining the revenue side.
Several factors are expected to impact the new budget, including ongoing negotiations with city unions for new memorandums of understanding (MOU) that are likely to include pay increases. The MOUs of seven of the city’s nine unions have expired, and the city’s police and fire contracts end September 30. Any salary increase also pushes pension costs higher.
Another major factor is that budget revenue will be boosted on January 1 when the one percentage point increase in the city’s sales tax goes into effect (from the current 9% to a rate of 10%). The voter-approved increase should generate about $4 million a month in new revenue to the city’s General Fund. However, the mayor and councilmembers have pledged to use the additional funds strictly for infrastructure improvements and to beef up public safety, including the reopening of the police department’s south division.
The public will have an opportunity to weigh in on the budget during city council sessions held around the city and at several council meetings held at city hall. A schedule of meetings is expected to be announced soon.