Tuesday, June 19, 2018
Editorials

St. Petersburg should look at more than just budget cuts

St. Petersburg Mayor Bill Foster and his predecessor, Rick Baker, have done an admirable job of trimming spending and avoiding property tax increases even as the city has lost millions in revenue because of declining property values. The property tax rate, after decreasing steadily since 1990, has remained the same for five years as the city has reduced staff, frozen or reduced salaries for nonunion workers and trimmed other costs to make ends meet. Now it's time to look at more options and better analyze the cost of avoiding any increase in the property tax rate no matter what the need.

The City Council is expected to discuss today whether to ask Foster to provide more budget choices besides further cuts in staff and services to keep the property tax rate the same. Council member Jim Kennedy wants the mayor to draft two budgets — one with the same property tax rate and one that would raise the rate to raise the same amount of money the city has this year. There may be other ways to get to the same point, but it is encouraging that Kennedy and other council members such as Karl Nurse and Charlie Gerdes are interested in studying more options.

More than two decades ago, there was a credible argument that St. Petersburg's property tax rate had risen too high. Rising property values, new downtown development and smarter budgeting helped the city gradually lower the rate by more than one-third even as revenue rose. St. Petersburg now operates on less property tax revenue per resident than Tampa, Orlando, Fort Lauderdale or Miami. But the city has lost $94 million in tax revenue since 2007 because of declining property values, and preliminary estimates show property values have dropped another 6 percent in the past year.

Raising the rate modestly need not result in paying higher taxes for most St. Petersburg property owners. During the current fiscal year, just 26 percent of the city's property owners benefitted from Save Our Homes, the state constitutional amendment that caps how much a homeowner's assessed value can grow annually. With property values declining once again, the percentage of homeowners benefitting from Save Our Homes will likely drop even more. The city could raise the tax rate incrementally without resulting in a tax increase for the vast majority of property owners.

Maintaining the same property tax rate amid declining property values cost the city nearly $5 million in revenue for 2011-12. While the property tax rate has remained steady and different fees are often dedicated to specific costs, there is a growing sense that St. Petersburg is nickel and diming its residents with more parking meters, new traffic signal cameras and fee increases. At the same time, hours at some public facilities have been reduced, and more cuts are on the way without any additional money.

The City Council is on the right track in talking about what services could be preserved or even enhanced with a modest property tax rate increase in 2012-13. The mayor and council members have been fiscally responsible, and it's reasonable to look at a broader menu of options beyond more spending cuts, layoffs and reduced services.

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