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Wednesday, April 3, 2013

The real reason Long Beach has a surplus

Do You Believe in Magic (album)
Do You Believe in Magic (album) (Photo credit: Wikipedia)
Don't want to burst the bubble and take the magic away. But the real reason we are experiencing a surplus in 2014 is because we received a $26 million dollar jump in property taxes because they had been swept away and sent to redevelopment all these years.

Take a look at when Long Beach started to have economic problems and you will see they weren't caused by public employee pensions. Because if they were the cause, when the City Council negotiated pension reform, the City would have realized a surplus. Right? Wrong.

When the City put 42% of the entire city into redevelopment it swept that tax increment into what was largely a debt servicing agency. Don't believe it? Go on line as I have and read all the redevelopment reports that the City of Long Beach filed with the State Controller John Chiang. 98% of the funds/taxes collected by Long Beach redevelopment went into Administrative costs, salaries and debt services. By its own reporting, the City created few jobs because of redevelopment. Gradually as property appreciated more and more money went into redevelopment instead of the general fund. That meant all of those property taxes did not go into the general fund to be used across the entire city.

Some on the City council railed against the Governor and State Legislature for abolishing redevelopment and redirecting property taxes to government and not local development. Not I. As the representative of an area that has only a sliver of redevelopment area -- it surrounds Schroeder Army Hall -- the eastside had to rely upon general fund moneys only for city services and improvements. Redevelopment areas in the rest of the city received both redevelopment funds and general funds. Most significantly, tax increment was not available for the entire city.

There are spots of success in Long Beach directly linked to redevelopment. Come on. Let's be open and transparent. Before we all go slapping each other on the back and saying what a great job we did creating the surplus, we need to admit that had redevelopment not been abolished last year and property taxes not returned, we would be singing a different tune and there would be no surplus. Residents deserve our honesty so they can weigh in when we make decisions that impact them. They had no say when Long Beach diverted property taxes into redevelopment and it is time we told them what problems that created with our budget.

Knowing that, we should pause and say, never, never again should a council get involved in a scheme that takes away property taxes from the general fund.

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