The State Legislature DID Allow Long Beach To Transfer Port Funds Into the General Fund
Over the 7 years I taught at CSULB, I always stressed to my students — “check your facts before you go off on somebody and tell them they are wrong.” That’s usually a good rule in life and especially if you practice law.
That’s why I was shocked at the treatment I received at City Council last Tuesday.
I was correct last Tuesday when I presented my proposal to the City Council that the State Legislature could authorize the transfer of port funds into the City “general funds.” Because the State did in fact do so in 1992 with the passage of SB 844.
Someone out there in the City remembered this fact because I was promptly sent pages from the City of Long Beach Harbor Department’s Budget for 1992 and 1993 which states: (which I am linking for your reading pleasure: Harbor Department Budget )
“Due to the fiscal problems associated with the California State budget deficit, the legislature passed a law (SB 844) allowing cities to recoup losses in property tax revenues from their Harbor Departments operating on State Tidelands Trust areas. During fiscal 1993, the Department transferred $7,797,897.28 to the City’s General Fund under this law, and has made provision for an additional transfer of $5,900,000 for fiscal 1994. The law has a sunset provision limiting its life to two years.
The City Council, by authority of City Charter Chapter XII, Section 1209 (c)(4) and with the approval of the Board of Harbor Commissioners, adopted a resolution to transfer $2,674,500 and $5,227,000, equalling 10% of the Department’s net income for fiscal years 1994 and 1995 to the City Tidelands Operating Fund.”
All I asked last week was for the Council to discuss this idea further and for the City Attorney to assist the Council in drafting needed legislation we could take to our friends in the State to allow a transfer of port funds into the general funds of the City to help allieviate the short fall because of the State budget deficit and the raid on property taxes.
Instead, I was chastised and told I didn’t know what I was talking about and that there wasn’t any way the State could authorize a transfer of port funds to the “general fund” of the City of Long Beach.
Oh, really?
So let’s go on a little more about SB 844 — according to one of several publications easily found by “googling” the topic:
In the mid-1990s, the ports successfully overcame two other major challenges: state-authorized revenue diversions to municipal general funds (SB 844) and stiff federal regional air-quality standards and emissions fines proposed under the 1994 Federal Implementation Plan (FIP). The two ports transferred $90 million under SB 844, but the legislation was not renewed after its first two years. Owing to its short duration, SB 844 did not seriously impair the ports’ capital development programs. In addition, strenuous lobbying by California public officials and business groups resulted in the elimination of the FIP. ——–ENHANCING SOUTHERN CALIFORNIA’S GLOBAL GATEWAYS: Challenges and Opportunities for Trade Infrastructure Development http://www.pacificcouncil.org/pdfs/sucal.pdf
Yes, it is true the ports hated that they had to transfer funds and fought it and actually in the book: Globalizing L.A. by Steve Erie, LB Port Officials proclaimed that if the City was allowed to continue getting monies for its general fund, then the port would spend down their profits.
SB 844 was enacted to allow the five California chartered port cities — LA, Long Beach, Oakland, San Francisco and San Diego — to receive some of these ports’ “discretionary reserves” for two years to replace the property taxes taken from the cities by the state. (Sound familiar??)
The legislation was put together by the City of Los Angeles. The bill allowed port cities to transfer the “greater of $4 million or 25 percent of the difference between total current assets and liabilities, up to an amount equal to the city’s property-tax loss.”
Long Beach port officials didn’t fancy the idea that under the law it would have to transfer $80 million annually because it had $500 million in reserves, so it negotiated a “cap” and Long Beach received around $20 million while Los Angeles received $70 million.
But the State Legislature did and could in fact again, legislate the transfer of these funds into our general fund to make up for the loss of property taxes.
Does the Port of Long Beach like this idea? No.
Did the City Attorney like this idea? No.
Did the City Council like this idea? Obviously not.
But that wasn’t what was portrayed that night. What was played out was that the idea was impossible if not illegal..even though the facts indicate that just is not the case.
Like the idea or not. We have an obligation to fully discuss it and others so that we can deal with the financial problems facing this City.
