PRESS RELEASE

Long Beach, CA – As the City of Long Beach begins the development process for the fiscal year 2023 City budget, during the March 8, 2022, Long Beach City Council meeting, the Department of Financial Management will provide a presentation to the City Council identifying positive trends that have significantly improved the City’s General Fund forecast. The $36 million General Fund shortfall projected last spring has reduced to $12 million, which is expected to be fully covered using one-time funds made available through the Long Beach Recovery Act. As a result of these positive projections and available one-time funds, no major public service impacts are anticipated for the coming year and no reduction targets will be issued to City Departments during the development of the Proposed Fiscal Year 2023 City budget.  

“Thanks to a strong economic recovery and responsible budgeting, we expect to once again present a budget with no service reductions,” said Mayor Robert Garcia. “We need to build back a strong economic and safety recovery and this upcoming budget will ensure that we are supporting public safety, support to get folks housed who are homeless, and historic infrastructure investments.” 

The key driver in this improved projection is the increase in revenue projections for FY 23. Revenue streams in FY 21, including sales tax, property tax and utility user tax, had a stronger rebound from pandemic-related losses than previously anticipated. Based on these results, revenue projections have improved by $21 million from the previous projections for FY 23. 

These factors have allowed the budget shortfall to be narrow enough to be covered by one-time funding made available through the Long Beach Recovery Act. Under the Securing our City’s Future category, funds were anticipated to be needed to help the City’s financial status as it was projecting shortfalls for FY 21 and FY 22. However, with the strong performance of revenue streams from FY 21, less assistance was needed in FY 21, making $12 million available to cover shortfalls for FY 23. 

Additionally, City staff is anticipating that the FY 23 budget will provide the opportunity for significant infrastructure investments for the City. Measure A revenues are showing strong positive trends and have higher revenue projections for FY 23 and the out-years than previously projected. This improved projection, along with the approved extension of Measure A, anticipates funds to be available beginning in FY 23 for various infrastructure and public safety related operational purposes. The City is looking into issuing bonds with Measure A funds that would generate more funding for infrastructure projects. There are also significant funds for infrastructure anticipated to be received from the federal government.  

“We are optimistic and pleased with the current projections and are excited about the significant investments into infrastructure that will be transformative for our community,”said City Manager Tom Modica. “This is great news for the city and community as we continue to overcome various pandemic-related impacts.” 

There are several key assumptions and uncertainties that could affect these projections, including the assumption of no future economic recession; whether the City’s Measure M litigation is heard by the California Supreme Court and its final outcome; and contract negotiations for the Police Officers Association, Fire Fighter Association and Lifeguards. While the revenue picture has improved, the City still faces a shortfall in the future, so the ability to add new services at this point is not in the long-term forecast. 

The City will continue to keep the public engaged in the budget development process. In January, the City hosted virtual community budget meetings and a budget survey where the public was able to provide input on their service priorities, which garnered participation from more than 860 community members. Feedback from these meetings will be provided to the City Council to take into consideration during the development of the Proposed FY 23 Budget. 

For more information about the City’s budget development process, visit longbeach.gov/fy23.