Coalition Challenges City for Moving Up Sales Tax Increase from Measure A

A Long Beach watchdog group filed suit against the City of Long Beach on Feb. 6,

to invalidate what it describes as a voter unapproved, unconstitutional tax increase decision made in December.

The Long Beach Reform Coalition filed a petition in Los Angeles Superior Court legally challenging a Dec. 12 special session of the City Council to discuss and vote on a proposed agenda item that was approved 6-0. If the city’s vote is enacted, it would increase the city’s total sales tax rate to 10.75% in April.

The lawsuit is based on Long Beach Measure A, enacted by city voters in 2016 and extended in 2020. The measure added a 0.75% sales tax that was scheduled in the ballot measures to rise up to 1% in October 2027. The Dec. 12 vote moves the 0.25% sales tax rate increase up two-and-a-half years earlier than what was approved by voters.

The 10.75% sales tax would exceed all but two California cities, and would be tying with Santa Fe Springs and six cities in the Bay Area’s Alameda county.

Ian Patton, executive director of the Long Beach Reform Coalition, said that the Dec. 12 special session was a move made by the city to push through the rate increase earlier in response to the passage of Los Angeles County winning approval of its own Measure A on the November ballot and which will bring a higher 0.5% countywide tax. That county tax was based on a 2023 decision by the California legislature (AB 1679)

to surpass the state cap on sales tax if those funds go toward homelessness and housing programs.

The Long Beach City Council had to give it approval if the sales tax were to start two-and-a-half years early, Patton said. County Measure A will be enacted on April 1, 2025, which Patton says makes it more convenient for Long Beach to deflect attention on the city’s sales tax increase’s early enactment.

There were only five council voters present for most all of the Dec. 12 meeting, until a late arrival was able to bring the vote up to six approval votes, Patton said. He was the only member of the public attending who was not a city employee or lobbyist as he made comments warning the Council about the item’s potential unconstitutionality, Patton said.

During that Dec. 12 special session, Mayor Rex Richardson said that it was essential for the City to implement the sales tax increase to bring in needed revenue it wouldn’t have otherwise. The City is concerned about funds being hurt with an expected $30 million deficit in the next fiscal year and with anticipated expenditures for the upcoming 2028 Summer Olympics.

The City had not responded to a request for comments on this lawsuit.

Business owners and residents concerned about increases

Local business owners are concerned that raising sales tax up to 10.75% will motivate consumers to go outside Long Beach to shop or to eat out.

Signal Hill has a cumulative tax rate of 10.25% while cities in Orange County range between 7.75% and 9.25%. Driving over to Orange County retail locations is convenient for Long Beach residents and workers.

“They (business owners) deserve two-and-a-half years to prepare for it,” Patton said.

Long Beach Utilities Commission held a public hearing on August 19, 2024. That board received public testimony about its proposed 11% rate increase on water rates and a proposed 8% increase on sewer rates. These rate increases are subject to a Long Beach City Council approval vote. It’s expected to bring approximately $9 a month rate increase for the average Long Beach residential customer.

College students and other residents have expressed much concern about the increasing apartment rental rates in the city. House shoppers are seeing purchase prices rise all over the region. Seeing sales and utility tax rates go up will likely add to concerns over the rising cost of living.

Long Beach Reform Coalition is waiting to see the City respond to the legal filing, and how the judge will determine what happens next.

‘We want to see the case go as soon as possible with the tax coming up soon,” Patton said.

Jon LeSage is a resident of Long Beach and a veteran business media reporter and editor. You can reach him at jtlesage1@yahoo.com.