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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 . The summit is set up for the public to give input on what it thinks is important. 

Bill H. April 20, 2012 at 11:27 AM
As I said in the budget hearings last year, it's time to raise millage to keep the current revenues. We have cut enough.
Robert Thompson April 20, 2012 at 01:18 PM
I would be supportive of a millage increase, if and only if the millage is cut if we have property values rise enough to make a cut possible in any given year.
Brian MacNeela April 20, 2012 at 01:31 PM
I agree with Mr Thompson's comment.
Bob Watson April 20, 2012 at 02:57 PM
We pay way too much in property taxes, are we being run by Progressives like Washington! Stand up people! It takes a whole street in a subdivision's taxes to retire 1 city employee! Let's contract out most of the work! Just sayin'
Bill H. April 20, 2012 at 03:00 PM
I can also live with Mr. Thompson's plan.
Ruth Brown April 20, 2012 at 04:11 PM
I'm with Bob Watson...more taxes are NOT the answer!! Retirement benefits are way too cushy for gov't employees. Private business owners can't afford to offer this for their employees, yet they are the ones footing the bill for gov't (city) employees. Do what we private business owners have to do when times are tough: CUT EXPENSES!!
Gwen Thomas April 20, 2012 at 05:35 PM
When property values ballooned and budgets were inflated as a result, city government became used to operating at that level. I realize prices of everything have risen, but what did St Petersburg do before it got fat on property taxes. I don't agree that taxes should be raised because we just don't have the wealthiest people living here in Pinellas county. It still is a charming green bench city that should understand the tightest budgets are being made by our elderly and young citizens already. Our city has come a long way but hopefully never like the commercial, sterile East coast of Florida!
Bill Williams April 20, 2012 at 05:48 PM
It's about time! St Petersburg needs to restore services and promote downtown development, not cut taxes and devolve into another cut-rate suburb of Tampa.
Claire Hendrickson April 20, 2012 at 09:43 PM
Does this mean there will be no new pier? I was looking foward to moving to St. Pete from Seattle and wanted to see the new pier!
William Mansell April 21, 2012 at 12:26 AM
Hello Claire, Money to build the new pier is not tied to this budget. It is coming from another revenue source.
Jack Sprat June 14, 2012 at 04:46 PM
This is the typical "fair share" argument. Tax those who own property because they don't pay their fair share. Why is it that people talk about a sales tax increase to support a failing bus system that serves 2% of the population but they don't consider a city sales tax that would raise more money and distribute the cost of all these wants and needs to everyone who benefits from city services. My guess is that the ones suggesting property tax increases do not own property.

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