The City of Long Beach plans to use $27 million in reserve funds, including $16.5 million from its emergency reserve used for natural disasters, to cover a major budget shortfall before the fiscal year ends on Sept. 30.
City officials say tax revenue has fallen while costs continue to rise. Lower utility tax collections, weaker sales and property tax revenue, reduced federal health funding, and higher labor costs have left the city about $27 million short despite months of budget cuts.
Officials also point to the cost of hiring more police officers and firefighters to fill long-vacant positions, along with an $11 million gap in the Health Department after federal funding was reduced.
City Manager Tom Modica said the city will present a proposed 2027 budget on July 30 that will include “very difficult changes,” warning that service reductions are expected while the city works to rebuild its emergency reserves.
The budget concerns come as many Long Beach residents say they don’t feel safe walking the city’s streets after multiple recent shootings and stabbings.
Some residents have criticized City Manager Tom Modica, Mayor Rex Richardson, and the City Council, arguing they believe the city’s ongoing financial problems and public safety concerns amount to a local crisis worthy of emergency-level attention.
City leaders, however, say the emergency reserve is being used because of the city’s financial challenges, not because Long Beach is facing a declared natural disaster.
The Long Beach City Council will review the proposed budget in August before adopting a final spending plan in September.
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