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Council adopts FY2026 operating budget with errata; debate centers on use of fund balance and tax impact
Summary
The council voted to adopt the fiscal 2026 operating budget together with an errata sheet that reduces proposed use of reserves; councilors were split on whether tapping fund balance is prudent, with majority supporting staff's conservative revenue assumptions.
The Long Beach City Council on May 20 adopted the Operating Budget for July 1, 2025–June 30, 2026, together with an errata sheet presented by the city controller that reduced the proposed reliance on fund balance and incorporated late changes to state and local revenue assumptions.
Key changes and staff rationale Controller Gina Resnick and city staff said a provision in the newly adopted New York state budget removed an MTA commuter tax allocation worth approximately $146,000 to the city’s general fund projection, and they reported revised revenue estimates for recreation and reduced anticipated tax-claim liabilities. The errata reduced projected general-fund use of fund balance and trimmed the water and sewer projections accordingly.
Why it matters: staff and some council members argued the adopted budget is conservative and intended to avoid a larger tax increase; others warned drawing on reserves risks higher taxes in subsequent years and could affect credit ratings.
Council debate - Council member John (first name used in meeting) summarized the trade-offs: the proposed tax levy increase was roughly 5.1% on the base, but staff are relying on conservative assumptions and on limited use of fund balance to bring the effective tax impact nearer to 2.5% if revenues and expenditures perform as hoped. He said the vote is largely symbolic because of charter timing but framed the long-term risk of using reserves. - Council member Lester said repeatedly he could not support dipping into reserves and voted against the budget adoption. Other members said they had confidence in staff to manage the budget and seek revenue increases.
Public comment Residents urged fiscal restraint, asked for clearer, consistent budget presentation online and called for efforts to find new revenue streams such as parking and marina development.
Vote and outcome The council adopted the operating budget as amended by the errata (vote recorded as 4–1). Council directed staff to continue conservative management and to return with further detail as part of the fall borrowing and capital review process.
Ending City staff said they will publish a virtual budget book and provide more transparent, searchable tools for residents to compare budgets year-to-year. Council members asked for periodic updates on revenues, reserve balances and the impacts of labor contracts.
