ST. PETERSBURG — After more than three hours of public comment and debate, the City Council rejected the mayor's proposed fire readiness fee and opted instead to raise property taxes to balance next year's budget.
The council voted 6-2 to kill the fire fee after dozens of residents spoke against it during a 6 p.m. public hearing that stretched into the night Thursday. The fire fee unfairly taxed the poor, they said, while saving money for the city's wealthier landowners.
Council members Bill Dudley and Jim Kennedy supported the fee, proposed by Mayor Bill Foster to raise nearly $9 million to fill next year's budget deficit.
"If that's your intent, that's fine, we'll make do with the millage rate," Foster said after the vote.
The council ultimately voted 6-2 to raise property taxes for 2013 — marking the city's first increase in 22 years — but it's unclear how much taxes will go up. The council set the tentative millage rate at $6.7742 per $1,000 of a property's taxable value, up from the current $5.9125. But the council could still decide to lower the rate when they approve the budget on Sept. 27.
Kennedy voted against the tax increase, fearing it would chill home sales when buyers compare tax rates between cities. Council member Wengay Newton also voted no.
In recent weeks, Foster had touted the fire fee in community meetings and lobbied council members and business leaders to support it. The council's rejection could be one of Foster's biggest setbacks since he took office in 2010.
Foster said Thursday he didn't consider it a failure since the city will still have a balanced budget with higher taxes.
"I gave council a tool," Foster said. "They chose not to accept it."
The meeting was punctuated with false starts and discussion about how to raise revenue, whether through the fire fee, a property tax hike or raiding the city's $40 million in reserve funds.
The $10 million deficit accounts for roughly 2 percent of the mayor's proposed $472 million budget for next year.
Council member Karl Nurse, who initially supported the fire fee in July, said Thursday that he couldn't get behind it because of the formula that caps property values at $10 million. The cap would have saved large businesses thousands of dollars.
"I candidly tried to find a way to make the fire fee work," Nurse said. "Putting a cap on it is wrong."
Newton wanted to tap reserves to cover the shortfall. "We shouldn't be hoarding money like banks."
His colleagues didn't support him.
Council member Charlie Gerdes said he opposed the fee because he didn't want to give the city another tool to take money from residents. "I'm fundamentally against the ways we can reach into the pockets of citizens."
Residents who spoke at Thursday's public hearing agreed.
Many urged the council to increase property taxes or raid reserves to balance the budget.
"I'd gladly pay more to maintain my fabulous quality of life in St. Petersburg," said resident Bonnie Higgins.
Critics, especially churches and charities, have called the fee a regressive tax on the poor.
Bill Hurley asked the council how they could call themselves Christian while burdening the poor with such a fee. "If Jesus walked in this room, he'd be embarrassed," he said.
Residents also questioned how the city spends money.
Cathy Wilson wanted to know why the city plans to spend $2.1 million next year on marketing, which could be used to improve services for residents.
"Something is seriously wrong here," she said. "My city doesn't work the way it used too. I want it back."
Ray Tampa, a former presidents of the local NAACP chapter, asked the council why leaders look the other way when employees make costly errors.
He pointed to errors that will cost more than $1 million for overpayments to police pensions. The budget for the council and the mayor's office also was underestimated by $360,000 this year.
"No one is held accountable," Tampa said. "Erase the fire fee from your agenda and give the citizens of this city a win."
Foster changed the formula since its introduction in July. At that time, he said all property owners would pay a share, making it more equitable than the millage rate which unfairly burdens newcomers.
The mayor later decided to exempt churches and charities.
In the fee's latest iteration, Foster called for property owners to pay $50 per parcel instead of $75 and 21 cents per $1,000 of a property's appraised structural value, down from 23 cents per $1,000.
Council member Jeff Danner said residents had a hard time understanding the recent changes to the formula and exactly how the money would be used.
"There was a lot of stuff we could have done a better job explaining," he said.
Foster urged the council to adopt the fee since the city spent $75,000 for a private law firm to create it.
"If you don't use it," you'll lose it," Foster said. "Keep the option alive."
The council rejected his plea.