The fire tax, or so-called fire readiness fee, will not be part of St. Pete's fiscal year 2013 budget. On Thursday night, city council voted 6-2 to strike down the fire tax that would have generated nearly $10 million in annual revenue for the city.
Instead, council shifted its focus to balancing the budget by increasing the millage rate. What that millage rate will eventually be and what the budget is, is still up in the air despite a 7-1 vote by council Thursday to adopt a 6.7742 millage rate.
"I anticipate that coming down," said Mayor Bill Foster of the millage rate for his $472 million 2013 budget.
In order to move discussions along — the council met for nearly five hours on the budget Thursday night — councilors approved the tentative rate and budget in order to fine-tune the millage and budget by the Sept. 27 budget hearing. The city will be required to adopt its budget that night because the fiscal year begins Oct. 1.
The millage rate approved Thursday, which is about 12 percent over the rollback rate, is considered a placeholder until it can recalculated for the budget. Foster and his staff were proposing a fire tax along with a millage increase that would go back to the rollback rate. That means, because of a decrease in property values, that an increase in the property tax rate would generate the same amount of revenues in 2013 as 2012.
collected slightly more than the city needed to close its nearly $10 million budget shortfall.
Since the fire tax is out of the equation, Foster will be proposing a millage rate at the Sept. 27 meeting that would cover the budget shortfall with no extras.
While he voted for the budget and millage increase Thursday, council member Jeff Danner said that if the budget doesn't have a real plan going forward on how to improve the city that he will not approve it on Sept. 27.
"I don’t see the plan to move forward," he said. "Unless I’m convinced that there is a plan behind the budget to do something about 5,400 vacant homes, the neighborhood partnership department, to help the small businesses, to fix things," Danner said he is going to vote no on the budget next time.
Council member Jim Kennedy was the 'no' vote on the millage increase and later on the budget because it did not include the fire readiness fee.
"I just think doing it all on millage rate is a mistake," Kennedy said. He said that a high millage rate could hurt an already fragile real estate market and could scare away businesses from moving to St. Pete.
The fire readiness fee, he said, would be a better way to diversify the city's revenue streams while raising money and not scaring off businesses.
Despite getting no other support from council, council member Wengay Newton continued to call for the city to draw down some of its reserves to plug holes in the budget for next year.
"I do not believe we should hoarding money like banks," he said.
Council member Karl Nurse echoed Danner and council chair Leslie Curran's sentiments about having a budget plan moving forward and the struggles in building a better city.
"The challenge is how do you keep downward pressure on spending at the same time try to investment so that you grow your city’s economy," Nurse said. "Think about the places you want to live in your life and where you want to go. It wasn’t the places with the lowest taxes. It was the nicest place you could live. And our challenge (is) ... how can we make this the nicest city."