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St. Pete needs targeted tax incentives to remain competitive: A Times Editorial Board recommendation
The city had a similar program from 2011 to 2021.
Aerial photo of downtown St. Petersburg with downtown Tampa in the background pictured in October 2021.
Aerial photo of downtown St. Petersburg with downtown Tampa in the background pictured in October 2021. [ LUIS SANTANA | Times (2021) ]
This article represents the opinion of the Tampa Bay Times Editorial Board.
Published Oct. 6, 2022|Updated Oct. 14, 2022

In the Nov. 8 election, St. Petersburg voters get to weigh in on four ballot measures — two referendums and two charter amendments. One of them would give the City Council the power to exempt certain businesses for city property taxes, which is the focus of this recommendation. To read the Times recommendations on the other three city ballot questions, click here.

Referendum 2: Property tax exemptions to promote economic development — Yes

This proposal would resurrect tax exemptions to entice businesses to relocate to St. Petersburg and invest in their offices or create jobs. The city had a similar tax cut from 2011 to 2021, when it lapsed. Another referendum to bring the program back failed last year by just 87 votes. Now it’s on the ballot again.

The exemption targeted businesses that promised to add or renovate office space. The City Council could exempt the companies from city property taxes. Same for companies that agreed to create at least 10 jobs that pay more than the county’s average wage.

Proponents say that without the ability to award tax cuts, the city would be at a disadvantage against other jurisdictions that lure companies with similar exemptions. They help attract and retain companies, they say.

Opponents call the exemptions “corporate welfare” and a “race to the bottom” that pits one city against another in a game that only businesses win. Residents get stuck with higher taxes or fewer services when businesses don’t pay their share, they say.

However you feel about these types of tax exemptions, this is worth noting: Only two businesses have used the program since 2011. American Strategic Insurance (now Progressive) received a $100,000 exemption in 2014 for five years. The company is now paying full taxes on its $13 million investment. In 2020, Jabil was approved for a $67,334 annual tax break each year for the next five years after investing $11 million into its property.

Related: All of the Times Editorial Board recommendations.

While this editorial board has misgivings about certain kinds of business tax break incentives, the reality is that cities without them can be left at a disadvantage. The incentives can help get businesses to the negotiating table. And in this case, the incentive has been used judiciously — and likely will be over the next 10 years if voters give it the thumbs up.

On referendum 2 to allow property tax exemptions for certain businesses, the Times recommends voting Yes.

Editorials are the institutional voice of the Tampa Bay Times. The members of the Editorial Board are Editor of Editorials Graham Brink, Sherri Day, Sebastian Dortch, John Hill, Jim Verhulst and Chairman and CEO Conan Gallaty. Follow @TBTimes_Opinion on Twitter for more opinion news.