Long Beach is proposing a budget of $95.5 million with a 5% tax increase, which would increase a homeowner’s tax bill by about $219 a year, city officials said.

The 2022-2023 expenditure plan will be budgeted For $2.5 million in severance pay for the first time in more than a decade as city officials seek to avoid issuing bonds and adding to its long-term debt.

The tax increase is necessary to balance the budget without borrowing for severance pay and employee expenses, City Comptroller Inna Reznik said. She said it was the first year the city could afford to budget for severance after improving city finances and recovering from the COVID-19 pandemic.

“This is going to be our toughest budget year not borrowing for severance. The years ahead should be much better,” City Manager Donna Gayden said. is the year to include severance pay in operating expenses.”

The budget, which comes into effect on July 1, must be approved by the end of May.

Gayden said the city has nearly $500 million in long-term debt and obligations, including $2.1 million in unpaid payments due for previous pensions this year and another $400,000 due for new pensions. This year.

Officials said the payments include time owed to longtime city employees, as well as police and firefighters, but recent arbitration decisions with the PBA and an agreement with the commanding officers’ association police will cap payouts for new officers and future retirements. Credit agencies have repeatedly criticized the city for borrowing to pay for operational expenses such as severance pay.

This year’s budget does not include a $75 million settlement with beachfront apartment developer Sinclair Haberman.

Payments for the settlement will begin next year, which must be paid over 30 years as they are absorbed into the budget and could result in additional property taxes for residents. The city approved the settlement last week, halving a $150 million judgment for a decades-old legal dispute.

The budget also depends on the cost of annual beach passes increasing this summer from $15 to $25 to help cover projected beach revenues of $5 million to offset annual operating and maintenance expenses. maintenance of the beach, said Reznik.

City council members are considering a separate resolution that would increase annual beach passes to $85 for residents and $170 a year for visitors. Annual family passes would increase to $115 for residents and $230 for visitors.

Individual day passes would be unchanged at $12, for residents, $15 for visitors.

The city hopes to boost revenue as the beach and other events return to pre-pandemic levels. The beach fee increases are equivalent to avoiding an additional $85 tax increase, Reznik said.

The budget does not include borrowing from city reserves or contributing to its $3.5 million cash balance. The city borrowed $4.7 million last year to balance the budget and finance lost revenue and pandemic-related expenses.

“It’s important for the public to realize that we’re moving forward and we’re in a better place,” Gayden said.