A tax-related controversy involving Long Beach, California and a local watchdog organization has finally been resolved — after a Superior Court judge denied the city’s request to implement an extra quarter-percent sales levy.

The issue stems from a nearly decade-old sales tax that caused controversy when the City Council voted to amend its municipal code related to Measure A in 2024. The 1% sales and use tax, which voters initially approved as Measure A in 2016, was originally scheduled to stay in effect for six years, before reducing to 0.5% for the final four years and then sunsetting in 2027.

But a slew of changes to local and state law complicated things over the next several years after Measure A’s original passage.

Those changes began a year after Long Beach voters approved Measure A.

In 2017, county voters approved Measure H, a quarter-percent tax to fund homeless services. But it couldn’t be collected in Long Beach because it would have put the city above the state’s cap on sales tax at the time, which was 10.25%.

So in 2020, Long Beach voters approved changes to the city’s Measure A, eliminating the 10-year sunset on the original 2016 measure and temporarily reducing the local Measure A tax rate to .75% to accommodate Measure H. The local 2020 Measure A also included a provision that when the county’s Measure H ended, as it was scheduled to in 2027, Long Beach’s sales tax would return to the original 1% voters approved in 2016.

Then, in 2023, the state implemented a carveout that allows L.A. County to bypass the sales tax limit when imposing a levy dedicated to addressing homelessness, effectively increasing the overall cap on sales tax in Long Beach to 10.75%.

The following year, Los Angeles County voters repealed Measure H early — effective April 1, 2025 — and replaced it with a new 0.5% tax at the county level, also called Measure A.

Those two changes — the increase to the overall sales tax cap in LA County and the early end of Measure H — led the city to believe it could restore the original 1% Measure A tax rate ahead of the 2027 date originally outlined in the 2020 ballot measure.

The City Council voted in December to amend Measure A’s ordinance to reflect the April 1 end date for Measure H in the hopes that the state would begin charging the extra quarter-percent as soon as possible, arguing that if it didn’t, the city would miss out on $60 million in tax revenue each year.

The California Department of Tax and Fee Administration, though, disagreed with the city’s reasoning that Measure H’s early end and the increased tax cap meant Long Beach could raise the Measure A tax rate back up to 1% without putting it to the voters first.

So in March of this year, Long Beach sued the state — asking the court to require the CDTFA to begin collecting the additional tax rate. The month before, a local watchdog group called the Long Beach Reform Coalition sued the city, arguing that the early tax increase was unconstitutional.

LBRC’s case was transferred to the Sacramento County Superior Court in May for coordination with the city’s lawsuit against the state.

The matter, now, has a conclusion, with Sacramento Superior Court Judge Stephen Acquisto issuing a tentative ruling on the two petitions on Friday, Nov. 7 — denying the city’s petition and granting the Long Beach Reform Coalition’s instead.

Long Beach had argued that there was legal ambiguity around the date its own Measure A tax could return to the original rate because it was not only tied to the 2027 date, but also to the “sunset date for Los Angeles County Measure H,” according to Acquisto’s ruling. But the judge disagreed.

“The Court does not find this reading reasonable. The City assigns too much weight to the ‘sunset” language,’” the ruling said, adding that the mentions of the word “sunset” in the original ballot language are only there to define the 2027 expiration date. “The city’s reading would require the Court to disregard the dates specified in the measure as to render them meaningless.”

The judge went on to further say that the City Council’s amendment to the Measure A language in an effort to revert the tax rate before the 2027 date “violates the constitutional prohibition on tax increases without voter approval.”

The ruling will require Long Beach to hold off on increasing the Measure A sales tax rate to 1% until the original date — Oct. 1, 2027.

Long Beach, in a Saturday, Nov. 8, statement, said it had worked collaboratively with the state on the issue.

“The recent ruling by a state judge regarding when the city of Long Beach local Measure A tax increase can go into effect brings clarity on next steps for the city,” the statement said. “The city worked collaboratively with the state to review this issue, and both agreed a judge should review the entirety of the case and the ambiguity surrounding the start date of the increase to 1%.”

The LBRC, in a statement also released on Saturday, called Long Beach’s response to the situation “damage control” and argued that the city’s assertion it had worked collaboratively with the CDTFA was “false.”

“Neither in CDTFA’s briefs nor (oral arguments) was there any acknowledgment of any ambiguity in the law whatsoever,” LBRC’s statement said, “either with regard to the State Constitution’s prohibition on voter unapproved taxation or with regard to the clearly stated rate schedule presented in Long Beach Measure A.”

The CDFTA’s stance, even in letters sent between the city and its own attorneys before Long Beach filed its March lawsuit, was made clear:

“The termination of Los Angeles County’s Measure H does not impact CDTFA’s analysis,” CDTFA attorney Andrew Miller wrote in a Jan. 7 letter, which Long Beach included as evidence in its court filing. “It does not change the plain language of the ordinance, which states that rate of the City’s TUT will increase to one percent on a particular date, October 1, 2027.”

LBRC’s statement, meanwhile, also hailed the ruling as a win for taxpayers.

“The real question the residents of Long Beach should be asking themselves at this point is, why does a city with such an extreme level of municipal taxation still fail to pave the streets,maintain the parks and provide sufficient public safety?” the statement said. “Yet other cities get by, looking far better, with far better services, with far less. Where is all the money going?”

The city, for its part, argued that it was necessary to take the matter to court since $60 million in yearly tax revenue — which would be used to fund things like public infrastructure and safety — were at stake.

Even when the City Council originally approved the Measure A amendment in December, Mayor Rex Richardson said the matter was unsettled.

“There’s legal recourse,” Richardson said at the time, “and there’s a lot of due process still to come.”

But, he added, the city had to make the decision to comply with state deadlines and not effectively disqualify themselves from collecting the additional tax dollars entirely.

“When the County Measure H tax expired, legal ambiguity existed over whether the city’s sales tax should increase immediately, or wait until 2027, and what the intent of the majority of voters was,” the city’s Saturday statement said. “Given the $60 million in funds for public safety and infrastructure at stake, the city pursued the ruling by the court so as to best represent the interests of the majority of voters who approved Measure A and supported increased investment in public safety and infrastructure.”

But with that ambiguity now cleared up by the court, Long Beach’s Measure A tax will be raised to the 1%, as was originally intended — in 2027.

“The funds will be available in 2027,” the city said. “Therefore, any new Measure A investments in public safety and infrastructure will be considered at that time.”