Over the last five years St. Petersburg has cut 300 city jobs, reduced hours for pools and libraries, cut park maintenance and raised fees and fines. But the city also collects one-third less in property taxes because of declining property values. Facing another $13 million deficit for 2012-13, city officials are revisiting bad ideas such as charging property owners new fees to help pay for fire service and streetlights. Patching the budget holes with deeper cuts or regressive fees won't fix a systemic problem. Mayor Bill Foster and the City Council should consider raising the property tax rate for the first time in at least two decades.
Tonight marks the first time St. Petersburg residents will have a chance to weigh in on next year's budget. The 6 p.m. meeting at the J.W. Cate Recreation Center could be as lively as in 2007, the last time the City Council changed the millage rate, lowering it to the current $5.9125 per $1,000 in assessed value. Back then, newer Florida homeowners and commercial property owners were storming city halls and county courthouses across the state to demand property tax cuts. Escalating real estate values were creating huge disparities in tax bills between recent home buyers and longtime homeowners who benefit from Save Our Homes, the state law that caps annual increases in taxable values on homesteaded properties to no more than 3 percent.
But the real estate collapse has significantly reduced tax disparities. Without a change in the property tax rate, St. Petersburg property owners will pay $4.2 million less in property taxes next year because of dropping values.
One grass roots group, People's Budget Review, has positioned itself to challenge the notion that cuts alone are the way to solve the city's fiscal problems. The group's online questionnaire, reportedly filled out by 2,000 residents, leans heavily on asking how respondents feel about city-financed amenities such as parks, libraries and recreation centers alongside police and fire.
Now in his third year in office, Mayor Bill Foster acknowledges that the city needs more revenue — but he's just not willing, so far, to back a specific method of raising more money. He is now open to increasing the property tax rate or adopting new assessments for fire protection and streetlights. Both proposed fees would charge each parcel of property in the city a flat rate such as $5 per month.
Charging property owners a flat rate for core public safety services such as fire and street lighting is regressive. Raising the property tax rate is a fairer way to raise revenue. The city could raise the millage to $6.2983 per $1,000 in assessed property next year to collect an additional $4.2 million to make up for declining values and most property owners would not pay a dime more than this year. Only those homeowners who still benefit from Save Our Homes — and therefore have paid less taxes than neighbors for years — would see a minimal increase.
After five years of cutting, St. Petersburg needs to raise revenue and not just balance the budget with even deeper spending cuts that would threaten the city's quality of life.