Long Beach, CA
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File #: 10-0749    Version: 1 Name: FM - proposed ballot measure
Type: Agenda Item Status: Approved
File created: 7/2/2010 In control: City Council
On agenda: 7/6/2010 Final action: 7/6/2010
Title: Recommendation to receive information and consider a proposal for a business license tax on medical marijuana collectives and other marijuana businesses; and set a date for a public hearing for Tuesday, August 3, 2010 at 5:00 p.m., to approve the placement of a ballot measure on the November 2010 General Election. (Citywide)
Sponsors: Financial Management
Attachments: 1. 070610-NB-32sr.pdf
Related files: 10-1209, 15-0274
TITLE
Recommendation to receive information and consider a proposal for a business license tax on medical marijuana collectives and other marijuana businesses; and set a date for a public hearing for Tuesday, August 3, 2010 at 5:00 p.m., to approve the placement of a ballot measure on the November 2010 General Election. (Citywide)

DISCUSSION
The City of Long Beach faces an $18.5 million General Fund deficit in FY 11, with projected deficits in FY 12 and FY 13 as well. The significant impacts of the global economic meltdown, coupled with rising compensation and pension costs will challenge the City's ability to continue providing essential core services such as police, fire, parks and recreation, library, public works and infrastructure improvement services to its residents.

On March 23, 2010, City management proposed a five-pronged approach to balance the City's budget in FY 11. A critical component of this five-pronged approach is the creation of new revenue. In researching initiatives that could increase the City's revenues, it was discovered that three major California cities, Sacramento, Berkeley and Oakland, are all bringing forward ballot measures to initiate, increase or expand their business license taxes with respect to medical marijuana establishments. A critical reason for these proposed measures is the State ballot initiative that might legalize recreational marijuana in the State of California. Those cities poised to take advantage of the resulting changes through their local taxing authority powers will realize critical revenues at a time when they are most needed.

The City's local taxing authority related to businesses is the Business License Tax. The City currently applies a base tax and a tax per employee on businesses operating in the City, which is differentiated based on the business classification. The City also has a gross receipts tax for vending operations, a square foot rate for commercial space, as well as other various taxing syste...

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