The Long Beach Reform Coalition is suing the city of Long Beach to challenge an ordinance that authorizes the city to collect a sales tax prior to the date previously approved by voters, Long Beach Local News reported February 11.
The suit focuses on Measure A, a local sales tax approved by voters in 2016 and extended with another voter-approved measure in 2020. Under Measure A, the city’s sales tax rate was set to increase from 0.75 percent to 1 percent in October 2027.
The City Council held a hastily called special meeting December 12, with the tax increase as the only item on the agenda, and voted 6-0 to begin collecting the increase more than two years early, on April 1, 2025.
The suit argues that this violates Proposition 218, which requires voter approval for any new, extended, or increased taxes.
“If you change anything that was approved by voters in a ballot measure, it can only be changed by another ballot measure,” Ian Patton, of the Long Beach Reform Coalition, said.
At the December meeting, Council Member Kristina Duggan raised concerns about the tax change’s legality, stating, “Voters voted on specific language.” However, she ultimately voted for the ordinance.
The city’s attorney and financial officer argued that the change was legal and aligned with voter intent.
Kevin Riper, the director of finance, said the situation involves the interplay between the two city tax measures and Los Angeles County’s Measure H of 2017, which imposed a 0.25 percent sales tax hike.
Due to the state’s 2 percent cap on total local transactions and use taxes, Measure H “caused a temporary reduction in our own Measure A sales tax rate from the 1 percent it had been in for six years, until the expiration or repeal or sunset of L.A. County Measure H,” Riper said. “So, we dropped on January 1, 2023, from a full 1 cent for our own Measure A sales tax to three-quarters of a cent.”
Measure H was expected to remain in place until 2027, so the Long Beach extension used that year as the start date for its increase that would take effect at the same time the county tax expired. However, the county voters decided to end the Measure H tax early, approving a November 2024 measure to do so.
Riper claimed that the early repeal means the city’s tax “bounces back” to 1 percent, and said the California Department of Tax and Fee Administration notified the city that it would have to approve an ordinance to make the increase official, or the state would not collect the tax on behalf of the city. The December meeting was scheduled on the last day that such an ordinance could be approved in time to meet the CDTFA’s deadline.
City Attorney Dawn McIntosh and City Manager Tom Modica told the council that while Measure A may not have included an effective date of April 1, 2025, its passage expressed the will of the voters that they wanted a 1 percent tax in Long Beach.
If the courts do not rule in favor of the taxpayers, the tax hike will cost consumers an estimated $12 million in 2025 and $24 million per year in 2026 and 2027.