NEWS UPDATE
Long Beach Reform Coalition files lawsuit against city's move to impose sales tax increase two years early
Thursday, February 6, 2024
The Long Beach Reform Coalition (LBRC) has announced the filing of a lawsuit against the City of Long Beach.
The lawsuit seeks to invalidate the December 2024 vote by the Long Beach City Council to allow a Long Beach Measure A sales tax increase to begin in April 2025, two years before the voter-approved ballot scheduled date of October 2027.
The state sales tax cap that includes state and local taxes is 10.25%.
In 2020 Long Beach Measure A (LBMA) passed by 16 votes. LBMA and the LA County Measure H brought the sales tax in Long Beach to the then-legal limit of 10.25%.
In 2023, the state legislature passed Assembly Bill 1679 to specifically allow the County of Los Angeles to exceed the local agencies' portion of the sales tax cap by a 1/2 cent. The law was passed in anticipation of LA County passing a local sales tax increase dedicated to homeless services. The legislation only applied to LA County, allowing the county to increase its tax over the 10.25% limit by .25%.
In November 2024, voters approved Los Angeles County Measure A (LACMA) that repealed the previously approved Measure H homeless quarter-cent sales tax and replaced it with a new half-cent sales tax, a total of .25% higher. Unlike Measure H, the new LACMA is a permanent sales tax.
With this new LACMA voter-approved sales tax increase the LA County rate as allowed by the state legislature is 10.50%.
That sales tax rate includes the current LBMA sales tax of .75%.
The LBMA approved by the voters had a schedule to increase the sales tax to 1 cent in October 2027 when the old Measure H was due to end. That 2020 voter-approved schedule kept the sales tax under the long-time 10.25% state cap.
After the November 2024 passage of the LACMA, the Long Beach City Council in December 2024 on recommendation from the Long Beach City Attorney Dawn McIntosh voted to increase the local sales tax to the full 1% two years before the voter-approved date of October 2027. It is that vote, altering the voter-approved schedule that the LBRC lawsuit contends is illegal.
That two-year increase would amount to approximately $6,000,000 a quarter, or $48 million over the next two years.
The LBRC Press Release on its lawsuit states:
The City Attorney’s argument that the City was merely making a “technical” change to Measure A and that voters in 2020 really intended a higher tax rate, has no credibility. When voters approve a ballot measure increasing taxes, they are approving the text of an underlying ordinance which sets forth the proposed new rate (or rates) of taxation.
The lawsuit asserts that the move to increase the tax before the schedule approved by voters in Measure A violated the California Consitution's Proposition 218 amendment. That 1996 constitutional amendment required voter approval of any local government tax.
Based on Proposition 218, the LBRC lawsuit argues that the December City Council vote to start the full 1% local tax ( legally known as a TUT) before the ballot schedule approved by the voters is unconstitutional.
The lawsuit states:
This action was unconstitutional and illegal for two reasons:
a. City voters have not approved a 1% TUT [sales tax] rate during the period April 1, 2025 through September 30, 2027; they approved a ¾% TUT rate via 2020 Measure
A. Thus, the City’s action violates Proposition 218, which prohibits a local
agency from imposing, extending or increasing any tax without voter
approval. (See art. XIII C, § 1, subds. (b) & (d).)
b. This new tax rate will cause the total TUTs in the City to be 2.50% during the
period April 1, 2025 through September 30, 2027, which exceeds the 2% cap
established by section 7251.1. While the County was authorized to enact a TUT
that exceeds the 2% cap (on certain conditions), the City is not.
The LBRC lawsuit was filed on February 6, 2025, in the California Superior Court, Los Angeles. San Diego-based law firm Benink & Slavens, the premier legal experts on Proposition 216, are representing LBRC and the co-plaintiffs.
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