Long Beach Considers Transfer Tax to Shore Up Revenue
This week, the Long Beach City Council will be presented with revenue options to compensate for declining oil tax revenues.
A transfer tax proposal modeled on Measure ULA is among the revenue options on the menu.
Transfer Tax Details
City staff is proposing two options for the city council's consideration. The first is a transfer tax of $5.60 per $1000 of property value for all properties.
There is no maximum or minimum; the rate would apply to a $500,000 property, the same as a $5 million property.
The second proposal would introduce a two-tiered approach.
The first $1 million in value would be taxed at $3.30 per $1,000, and the value above $1 million would be taxed at $5.60 per $1,000.
Long Beach city staff estimate that the first option would generate $16 million annually, while the second option would generate $12 million annually.
Of course, as we have seen with Measure ULA, transfer taxes do not always meet expectations.
A study in Boston showed that transfer taxes can be a net negative. This is due to the chilling effects that transfer taxes can have on the market.
Take Action
We are in the early stages of the policy-making process. Now is the time to reach out to city council members and educate them on the adverse effects a transfer tax can have.
It is much easier to push back on this proposal now than at the ballot box.
If the city council directs the city staff to pursue this option, the measure would be put on the November 2024 ballot.
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