Facing a funding crisis Long Beach city officials proposed a 12.3 percent tax hike at a public hearing Tuesday.

It would help pay for the City Council's $95 million budget plan. City officials are still trying to close a $2.1 million gap to fund the city through the end of next month.

The proposal could raise taxes by $400 a year for homeowners. Residents have countered by calling on city officials to take a pay cut.

Residents say former City Manager Jack Schnirman announced last year that the city was in sound financial shape with a $9 million surplus. He has since left office.

Acting City Manager Michael Tangney says some revenues Schnirman had anticipated fell through. And unexpected expenses popped up, he says.

"There was a very positive outlook given by the city manager, and unfortunately the projected revenues did not meet his projections, and the expenses overextend what he predicted," Tangney says.

As News 12 has reported, the City Council failed to pass a bond resolution last month that would compensate 57 employees who retired from or left their city jobs.

Residents and City Council members are questioning the nature of the payments and the justification for them.

Legislator Denise Ford says 10 to 15 of the people on the payout list are current employees on the city payroll. She's calling on the state comptroller to conduct an audit of the city's books.

"For them to give these people payouts without giving us any background, any type of documents to support the amounts that were distributed to these people, makes me wonder what else is going on up there," she says.