Long Beach

The city receives $ 10 million more property taxes than expected, pushing up budgets • Long Beach Business Journal – Long Beach, California

Long Beach, California 2022-05-04 12:00:15 –

Long Beach property tax revenues were significantly higher last year than authorities expected-and it wasn’t for the hot residential real estate market.

This boost, which exceeded the city’s expectations by nearly $ 10 million, was largely due to the unexpected flow of funds from the revaluation of the city’s former Redevelopment Agency project area. (These properties were targeted by the City Redevelopment Agency, which was closed by Governor Jerry Brown in 2012 because they needed urban redevelopment.)

The surge in property tax revenues from these revaluations is the result of positive sales trends and a series of improvements and projects in areas such as North Long Beach and downtown, with an overall stunning $ 2.2 million surplus. It was one of the factors. Last year’s funds.

It is unclear why the city has seen such a big rise in last year’s reassessment. Responsibility manager Geraldine Alejo admitted that these one-time payments were a very productive year, but said there were no signs associated with the COVID-19 pandemic.

However, property tax revenues can fluctuate. For example, late payments can adversely affect the original fiscal year and increase revenue for the following year. Valuation decisions that are too late to be budgeted for later in the fiscal year could be another potential source of unexpected income for next year.

In general, those revaluations are a net plus, based on how the city forecasts the budget. However, it is possible that profits will be in the red. For example, a successful appeal against a change in valuation can result in negative revenue.

And it’s not just cities that are affected. Property taxes are collected at the county level, so cities like Long Beach receive only a small portion of the 1% property tax collected from their inhabitants. More than 40% of the property tax collected in Los Angeles County was allocated to the school district this year, while the city government is about 15%.

“On average for the entire general fund, the city of Long Beach earns 21 cents from all property tax dollars,” said Kevin Lipper, director of financial management at Long Beach.

Nevertheless, property taxes are the most important source of income for the city’s general revenue sources, accounting for an average of 22.5% of the fund’s total income. This year, property taxes have brought nearly $ 150 million to the general fund. That’s about 23.5% of the $ 636 million in fund revenue.

“Property taxes and excise taxes are the two largest sources of income for general revenue,” Riper said.

And, of course, general financial resources are important to the operation of the city. According to the budget adopted for the 2022 fiscal year, which runs from October 1st to September 30th, 2021, among other spending, $ 33 million for development services, $ 5.8 million for health and welfare services, and 300 for public enterprises. Provided 10,000 dollars. ..

Revenues are so important to the city that authorities intend to make realistic forecasts to predict spending.

“We have a conscious policy of making predictions at a level that is reasonably expected to actually happen,” says Lipper. “We are neither overly optimistic, intentionally optimistic, nor intentionally pessimistic. We have the best forecasts by experts about what property taxes will be. increase.”

Next year’s property tax forecast is significantly higher than the property tax for fiscal year 2021, totaling just over $ 140 million. The forecast does not take into account potential lump sum payments, Alejo said, so the forecast represents confidence in the moving city’s real estate market.

“What we see in our 22-year budget is based on what we see. It’s stable sales with rising prices, continuous construction, and continuous improvement,” Alejo said. I am.

Moreover, the assessed ratings are not expected to decline as they did in the last few years. This shows that authorities are looking beyond COVID.

“We didn’t see any of the things that supported us in any of the negative effects of the pandemic,” Alejo said. “Overall, things look good.”

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