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St. Petersburg leaders must decide how to raise $10 million: tax or fee?

ST. PETERSBURG — Decision time has arrived for the City Council.

This month will be pivotal as council members decide how to close a $10 million budget gap. Regardless of how they boost revenue, it's almost certain to affect residents and businesses.

Taxpayers have flooded council members with calls and emails about how they think the city should raise money. Many oppose a suggested new "fire readiness" fee, suggesting instead the city to dip into its reserves. Others are against any more cuts to services, such as fewer hours at city pools or libraries.

Thursday's council meeting could be a precursor to gauge the public's pulse before formal budget hearings Sept. 13 and 27. Residents will be allowed to speak during Thursday's forum.

"I'm going to rally folks to be there," said Vince Cocks, vice president of Faith House, a halfway house in St. Petersburg. "I'm working away on this."

The council, which voted 5-3 in July to move forward with a fire fee, is limited on how it can raise the $10 million, or roughly 2 percent of the city's proposed $472 million budget for next year.

The council could choose between a property tax hike or the new fire fee. Members instead could dip into the city's $40 million reserve fund, or approve some combination of all three measures.

"This is one of the most closely watched city budget processes ever," said Darden Rice, president of the League of Women Voters of St. Petersburg.

The fee has ignited controversy among residents, churches and charities. Critics contend the fee is a regressive tax on the poor designed to save businesses and wealthy property owners from paying thousands in additional property taxes.

To fend off some of this criticism, Mayor Bill Foster has proposed allowing poor residents to defer the fee until their properties are sold. The city would place a lien on the homes to guarantee eventual payment.

The People's Budget Review, a coalition of neighborhood groups, civic organizations and union members, has conducted a survey of more than 1,200 residents. Preliminary findings show residents oppose the fire fee and prefer to balance the budget by raising property taxes and tapping reserves, said Rice, a member of the group.

Results were not released; the group said they were still being tallied.

"I think citizens are smart and see through the fire readiness fee for what it is," Rice said. "It is flat tax that disproportionately hurts the poor."

The former president of the NAACP, Ray Tampa, agreed: "The fire fee is affecting the people who can least afford it."

Council members seem split on how to balance the budget.

Jim Kennedy, who voted to move the fire fee forward, expects the group to exempt, not defer, houses valued under $50,000. He estimates the fee to then raise between $7 million and $8 million.

The city has gone at least 22 years without raising the current tax rate of about $5.91 per $1,000 of taxable value. Kennedy expects the streak to end.

He prefers raising the tax rate to about $6.20 to generate between $3 million to $4 million.

"I see us doing a combination of things," Kennedy said. "I don't see us dipping into reserves."

Wengay Newton, who opposed moving the fee forward, expects residents to pack the council chamber for the meetings.

He prefers tapping reserves and slightly increasing property taxes to balance the budget. Newton questions why Foster wants to hold reserves worth $40 million only to keep the city's bond rating higher.

"We shouldn't be hoarding taxpayers' money like a bank," he said. "This is what the money is supposed to be used for."

Newton lambasted council members who want to modify the fire fee by exempting the poor and nonprofit groups, saying: "If it can't stand on its own, then it's not a true fee. I hope my colleagues come to their senses."

Residents are rallying.

Scores have packed recent meetings when the council decided the future of the Pier and whether to allow digital billboards. Meetings lasted hours.

This month's meetings could be the same.

A grassroots group, Fair Tax Coalition, has urged residents to attend and created an online petition opposing the fee.

Many taxpayers mistakenly believe the fee is to keep fire engines rolling, said group member Tom Tito, adding: "The more the public learns about this, the less they like it."

Edward Pettit, a resident in the Pasadena area, said the council has eroded public trust by not allowing taxpayers to vote on the Pier and by moving forward with the fire fee.

"They all deserve to reap what they've sown and to be voted out," he said.

Mark Puente can be reached at mpuente@tampabay.com or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.

. if you go

Be heard

The St. Petersburg City Council meeting Thursday begins at 8:30 a.m. at City Hall, 175 Fifth St. N. Residents will be allowed to speak at the beginning and end of open forums.

Formal budget hearings will be held at 6 p.m. Sept. 13 and 27 at City Hall.

St. Petersburg leaders must decide how to raise $10 million: tax or fee? 09/03/12 [Last modified: Monday, September 3, 2012 9:33pm]

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