Is a Tax Increase in St. Pete Inevitable?
On Thursday Mayor Bill Foster and City Council discussed the $13 million budget shortfall the city is facing in fiscal year 2013. There was consensus that cuts alone would not fix the budget this time.
Mayor Bill Foster and the St. Petersburg City Council have asked the question: Are you willing to pay more in taxes, fees or assessments to maintain St. Petersburg the way it operates and looks now?
According to discussions that took place Thursday during a City Council workshop about the city's fiscal year 2013 budget, increasing city revenue streams through a combination of property tax increases and/or assessments appears inevitable.
The city is facing a $13 million budget shortfall that, according to Mayor Bill Foster, cannot be met by cuts alone.
"I do recommend that we find $10 million in additional revenue," Foster said Thursday.
Without additional revenues, Foster said the city would be one, "no one up here would support or recognize," he said. "The only way we will maintain the city that we want is having additional revenue generators."
Foster said the city could come up with $3 million in reductions packages, which would be specified later, but that is as much as he would recommend.
"Mayor, let me commend you (for saying) that we actually need to raise revenue and that we are not just going to do this on cuts," said council member Jim Kennedy.
The revenue generators discussed Thursday were increasing the millage, adding a fire readiness fee and/or a street light assessment fee. While no one option was selected, the council did vote to explore one in greater detail.
During the City Council meeting Thursday, the council voted 6-2 to have the city's legal team explore and take the first steps toward creating a fire assessment fee.
The city needed to approve counsel to explore the fire fee because it has to be approved by the courts and needs to be approved before this year's tax notices are sent out.
Kennedy, who made the motion to explore the fire fee, said the fire readiness fee is a good alternative to raising the millage rate.
"It would be a mistake to put it all onto the ad valorem millage rate," he said. Increased property taxes, Kennedy said, would deter property development.
Council member Wengay Newton, one of two 'no' votes, said it does not matter if you call the fire readiness a fee or assessment, to him, it is still a tax. "I won’t be supporting that tax or fee or whatever you want to call it," he said.
During Thursday morning's workshop Foster and city staff showed council how much millage increases and uses of one-time reserves affected 2013's budget and beyond.
"The exercise today was really to point out, how every decision that you make has to go out," Foster said of planning for future budgets.
Ad Valorem By the Numbers
- Ad valorem covers 60 percent of the public safety costs
- Compared to Ft. Lauderdale, Miami, Orlando, Tampa and Jacksonville, St. Petersburg brings in the lowest amount of property taxes at $69.6 million
- St. Pete's property taxes have not covered the police budget since fiscal year 2009. The police budget for fiscal year 2012 is $86.2 million and property tax revenues were $69.6 million
- The millage rate has gone unchanged since 2008 at 5.195 mils. Since that time the average homeowner pays almost $300 less in city property taxes
"Effectively, we’ve been cutting people’s property taxes for five years," council member Karl Nurse said Thursday.
Council member Charlie Gerdes said in his district in west St. Pete, District 1, there is an openness to a millage increase to maintain current public service levels.
"A lot of people, more than not, are receptive to a millage rate increase," Gerdes said. "(There are residents) who are sick and tired of their services being cut. There is a receptiveness to (a millage increase.)"
Millage Increase Impact
- Should the city keep the millage rate the same next year, the average property tax change on a $100,000 home is St. Pete would decrease by $18.29.
- A .15 mil increase would result in a decrease of $3.29. That mil increase, according to city documents, would still bring in less property taxes than the year before because of declining property values.
- A .50 mil increase over the current millage would result in an increase of $31.71 on a $100,000 home.
Foster said it is his goal this year to get as much public input and participation in the budget process as he can. "This will indeed be the people’s budget," he said.
At 6 p.m. on Wednesday, April 25, at the J.W. Cate Recreation Center, 5801 22nd Ave. N., there will be a city budget summit . The summit is set up for the public to give input on what it thinks is important.