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Property rate hike possible as budget talks begin in St. Petersburg

ST. PETERSBURG — In an era of shrinking government, the City Council and Mayor Bill Foster are considering what was once considered politically unimaginable: raising the property tax rate.

On Thursday, the council voted 6-2 to request two budget proposals this year: one with the current city property rate, and one with a higher rate to ward off further cuts.

"I want our residents to show up at budget forums and discuss overall philosophy rather than talking about what not to cut, like their pool hours," said Jim Kennedy, who proposed the idea of the dual budgets. "I'm not advocating for a rate increase, but I want us to have a framework for real budget discussions."

One snag: Foster said he doesn't plan on submitting two budgets to the council for approval. He said it's unnecessary. But he did say he will provide a mechanism in the budget he does submit that allows the board to easily calculate rate hikes and how they affect cuts to services.

Still, the council vote is significant, Foster said, because it shows board members are willing to talk early in the budget process about a rate increase.

"Maybe we really have cut everywhere and this really is the year that everyone is starting to say, 'Okay, let's raise the tax rate,' " Foster said.

Foster said it's up to the council to decide. He said he still has areas in the city budget that he would identify for cuts if the Council doesn't raise the rate. He said he only proposes the budget, the council approves it.

Typically, the mayor submits the budget to the council in late June or early July after a series of workshops with the eight-member board. Residents attend forums to comment about the budget, but these meetings usually attract only a handful of residents.

Council members like Karl Nurse have complained that by the time Foster submits his budget, most of the major spending decisions have already been made. One reason is the nature of city government. The council does have the power of the purse, but it takes five council members to overrule Foster and an additional member to withstand his veto.

"What happens is we get a proposal from the mayor and basically we don't change a quarter of one percent of it," Nurse said. "That's why I want to have a broader discussion."

St. Petersburg has gone at least 22 years without raising the rate, which dropped from $9.25 per $1,000 of taxable value in 1990 to its current rate of $5.9125. Since 2007, it has been the same rate.

But because property values have dropped in the bad economy, the money that tax rate brings in has plummeted, dropping from $104 million in 2008 to a projected $72 million this year. With another projected decrease in property values projected at about 6 percent this year, council member Leslie Curran said it's time to consider all options.

"It's a new day, and we need to look at every single different thing that we can look at," she said. "Two budgets is a good idea. Lay it out there."

But council members Jeff Danner and Wengay Newton didn't support the idea. Newton said there's still too much waste in city government and that officials should instead go after revenue such as impact fees that aren't being collected. Danner said two budgets is wasted effort because the council can decide to raise rates anyway.

"I'm not clear what we gain," Danner said.

Michael Van Sickler can be reached at [email protected]

Property rate hike possible as budget talks begin in St. Petersburg 01/12/12 [Last modified: Friday, January 13, 2012 6:58am]
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