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A Times Editorial

A fairer way to balance St. Petersburg budget

Just because something is legal doesn't mean it's a good idea. St. Petersburg Mayor Bill Foster wants the City Council to adopt a new fee for fire protection to balance next year's city budget and avoid deeper spending cuts. There is an easier and fairer way to balance the city budget: Raise the city's property tax rate for the first time in more than two decades, consider more spending cuts and use some reserves.

The fire fee scheme cooked up by the Bryant Miller Olive law firm — and already sold once to the city of Brooksville in Hernando County — will disproportionately shift the costs onto owners of the city's least expensive properties. It will also muddle accountability, as property owners will pay two different taxes — property taxes and the new fire fee (which is a fee in name only) — to fund one service. And it raises the simple question: What is gained by complicating the funding of what is clearly one of the city's core functions, fire protection?

Consider how the fire fee works. The city would charge every nongovernment parcel of property in the city a flat fee — currently proposed at as much as $75 — regardless of the value. Then the city would charge properties that have buildings on them a second fee tied to the value of those buildings. Foster has said that could be as much as 24 cents per $1,000 of building value, though he hopes to lower both that amount and the flat fee. Regardless of the amount, the result is the same: an incredibly regressive tax. The owner of a house worth $50,000 above the value of the land would pay a total annual fire fee of $89 while the owner of a house worth 20 times as much ($1 million) would pay a total fee of less than four times as much: $315.

By comparison, an increase in the property tax rate would be far more equitable, spreading the burden more fairly between property owners of means and those at the lowest ends of the economic ladder. Foster is proposing, if the council rejects the fire fee, a 1 mill increase in the property tax rate, an increase of about 17 percent. That amount could be reduced, however, if the council also found ways to cut more city costs and spent some modest reserves.

Foster and other council members have argued that the fire fee would actually restore some fairness to the city's revenue stream. Homeowners who pay no property taxes because of the state's homestead exemptions or pay disproportionately less due to the Save Our Homes cap would have to contribute more to the city services they might use, such as fire protection. But the disparities on the city's property tax rolls between longtime homesteaded homeowners and everyone else is significantly less than just five years ago because of the downturn in property values. And adding one more complex and unfair revenue stream to compensate for another unfair taxing scheme is hardly a rational argument.

Throughout this downturn in the economy, City Hall has repeatedly avoided raising the property tax rate — last changed 22 years ago — by cutting services and adding revenue from things like parking meters and red light cameras. The result is that most property owners are paying far less than five years ago because their property values have declined. City services don't get much more basic than fire protection, and funding them through anything other than the progressive property taxes is a step backward.

If the city needs more money, council members should level with voters and raise the property tax rate, not embrace a deceptive and unfair fee that is nothing more than a cleverly packaged regressive tax.

A fairer way to balance St. Petersburg budget 07/08/12 [Last modified: Sunday, July 8, 2012 4:30am]
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