Long Beach city sets a risky precedent

Although a final vote has yet to be taken, the municipality wants to take 5% of gross revenue, as opposed to the traditional 10% of net revenue. This follows the Port previously refusing to make what amounted to a double payment this year, although it did agree to make the payment three months earlier than normal, rather than the six months that was asked for.

Allegedly Long Beach had gross revenues of US$311m and a net income of US$124m for the last financial year which would mean an unacceptable 26% percent increase for the Port.

There is little doubt that other cities throughout the US think this is a splendid idea but as with all new ideas, others will come up with improvements. Given the current fervour in Washington to bring in retroactive laws over the BP saga, it will not be long before at least one city will attempt to jump on the bandwagon and backdate payments.