SHOULD LONG BEACH GET A CUT OF MARIJUANA SALES?

Proposed tax could be placed before voters on the November
ballot.

LONG BEACH - If California voters choose to legalize recreational
marijuana in November, any pot sold in Long Beach could be subject to
a voter-approved city tax.

The City Council is holding a hearing on a proposed marijuana tax
Tuesday and could vote to place the tax on the November ballot.

Regardless of the outcome of state Proposition 19, which would
legalize marijuana, the city's existing medical marijuana collectives
that just months ago were given strict new regulations would also be
taxed under the ballot measure.

The taxation of marijuana may draw the most controversy and debate,
but it won't be alone on Long Beach's ballot. Three proposed City
Charter amendment changes also may be added to the ballot if the
council approves the measures Tuesday - a new transfer method that may
increase how much money the Port of Long Beach gives the city, the
elimination of the Civil Service Department and increased hiring
preferences for veterans.

According to the Los Angeles County Registrar-Recorder, the estimated
cost for Long Beach's first ballot measure would be $362,000, rising
by $48,000 or $49,000 per additional measure, topping out at $557,000
for five ballot measures. If the council places the four proposed
measures on the ballot, the cost would be $508,000.

The vast majority of the council has supported every measure, but a
single vote of dissent on the marijuana tax could doom that proposal.

In order for the council to have a ballot measure that requires just
more than 50 percent voter approval, the council must unanimously
declare a fiscal emergency. Otherwise, the marijuana tax will require
a two-thirds vote of approval, which is a tall order for any ballot
measure.

It appears the council won't get that unanimous fiscal emergency
vote.

When the council voted July 6 to have the city attorney draft the
marijuana tax measure, 5th District Councilwoman Gerrie Schipske cast
the lone vote of dissent.

Although she couldn't be reached Friday for comment, her chief of
staff, Josh Butler, said that Schipske "hasn't changed her position."

At last month's meeting, Schipske explained her opposition: "I have
great difficulty now taxing something that we have said is for
medicinal purposes," Schipske said.

Schipske used the power of her vote in a similar fashion in 2008, when
she alone voted against declaring a fiscal emergency for the Measure I
infrastructure parcel tax. The measure then required a two-thirds vote
of the people, but failed to achieve it - although it did receive more
than 50 percent.

As with Measure I, the city is looking to the marijuana tax to bolster
the city's coffers. Long Beach faces a projected $18.5 million general
fund deficit in the coming year, and further budget shortfalls are
expected at least through 2014.

Under the proposed ballot measure, medical marijuana collectives would
be taxed 5 percent of their gross receipts, recreational marijuana
businesses would pay 10 percent of their gross receipts, and marijuana
cultivation sites would pay $25 per square foot.

A minimum $1,000 business license tax would be applied to all
marijuana businesses.

For medical marijuana collectives, these costs would be on top of a
$14,742 permit fee that the council put in place in March. Operators
of collectives say even that amount is excessive, and
medical-marijuana advocates say that the drug shouldn't be taxed
because it will only increase the cost for legitimate patients.

Interestingly, when the council approved medical marijuana
regulations, the city made it quite clear that the drug can't be sold
and that collectives may only ask for donations from their members.
So, how can you tax something that isn't sold?

"Regardless of what they call it, if there is an exchange of goods or
services, whether it's barter or for cash, it's for tax purposes a
sale, even though under our ordinance you aren't supposed to make a
profit on it," Deputy City Attorney Mike Mais said Friday.

He pointed to other cities that are enacting similar marijuana taxes,
such as Oakland, Sacramento and Berkeley.

The marijuana tax is the second item on the agenda, while all of the
other proposed ballot measures are scheduled for the end of the meeting.

Tidelands transfer

Another ballot measure that the council will consider Tuesday would
change the City Charter to have the Port transfer up to 10 percent of
its gross revenue, rather than the current method of 10 percent of its
net operating revenue, to the city's Tidelands Fund.

City officials say the change will eliminate confusion over the net
transfer, which sometimes leads to disagreements about what costs
should be factored in before the transfer is made. The change also has
the potential to give the city at least a couple of million dollars
more in the transfer.

As is currently the policy, the Harbor Commission would still have the
authority to give less money if it decides that the cash is needed for
Port projects or other costs.

Another part of the proposal would change the charter to clarify that
the city has control of all oil operations in Long Beach, even those
on land owned by the Port.

Whether the Harbor Commission likes the ideas at all is another
matter. When the commission meets today, it plans to discuss the
charter amendment, but only a single sentence describes the discussion.

Unusually, there is no recommendation from Port staff, nor a report
explaining the repercussions of the measure. Noel Hacegaba, the
commission's executive assistant, said a staff recommendation isn't
expected and that it will be up to the commissioners to decide their
stance.

If the commission decides to oppose the measure, then that could spoil
relations between City Hall and the Port of Long Beach, to which city
officials have more frequently been looking for financial help. The
commissioners may find themselves in an awkward position, because
their first responsibility is to the Port, yet they are appointed by
the council and the mayor.

Civil Service consolidation

As city officials look to cut costs and speed up Long Beach's hiring
process, a ballot measure has been proposed that would eliminate the
Civil Service Department from the City Charter.

The department's responsibilities, such as testing and hiring
employees, would be handled by the Human Resources Department. The
Civil Service Commission, which sets rules and hears appeals of
workplace violations, would continue to exist.

Officials estimate that consolidating the departments would save
$400,000 a year.

Jobs for veterans

While that measure would change who does the hiring, a ballot measure
proposed by 1st District Councilman Robert Garcia might change who
would be hired.

Garcia's measure, which was unanimously supported by the council last
week and is expected to pass Tuesday, would give veterans more credit
in testing for city jobs. Veteran job applicants would still have to
meet basic qualifications for positions, but they would be given extra
points on tests to increase their chances of being hired.

Aquarium expansion Ballot measures may be the most significant votes
on Tuesday's agenda, but the council will start its meeting with a
hearing and vote on changing the coastal zoning around the Aquarium of
the Pacific to allow the Aquarium to expand.

The 23,330-square-foot expansion will create a new, changing exhibit
area with a variety of marine animals, and it will have a 3-D theater
for educational programs. The aquarium will also get a new front
entrance, a larger gift shop, more lobby space and a new facade that
will have a digital screen on which images of sea life or the Aquarium
logo may be displayed.

The Planning Commission has already approved the expansion's
design.

The project is expected to cost $50 million, which would be paid
through grants and donations, not city money. The California Coastal
Commission also must approve the expansion.