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SPECIAL REPORT: Your neighbor's tax bill

Two bedrooms, $3,300 in taxes in St. Petersburg

It's not fair, even the St. Petersburg mayor says, but inequity is the price to pay for a tax cap.

By SHARON L. BOND
Published March 26, 2006

ST. PETERSBURG - Charlie Guy is one of those homeowners near the high end of the property tax scale. Save Our Homes, the property tax cap, is one reason.

Guy, 59, is a relative newcomer to a long-established neighborhood. He moved to the Old Southeast, near downtown, in 2003, the eighth year of Save Our Homes. He paid $150,000 for his home, according to the Pinellas County Property Appraiser's Office.

"It's a 1967, two-bedroom, two-bath that is 1,600 to 1,700 square feet," Guy said. "I did most of the (restoration) work myself."

His property tax bill for 2005: $3,255. Nearby is a home about the same size that has a current market value of $206,600, the appraiser's office shows. It was purchased by the current owner for $39,900 in 1980 and has the full benefit of Save Our Homes, which puts the taxable value at $71,000. The $25,000 homestead exemption further lowers the taxable value to $46,000.

The 2005 property tax bill: $1,124, about a third of Guy's.

Such disparities are found throughout St. Petersburg, and Save Our Homes is one reason. They can be seen house to house, as in Guy's situation, or neighborhood to neighborhood. For example, neighborhoods like Lake Maggiore Shores, in southern St. Petersburg, and Lake Pasadena, at the west end, pay less than Crescent Lake, which is closer to downtown, and Brighton Bay, on the north side. Granted, part of that has to do with property value differences, but Save Our Homes has an impact.

The tax cap was approved by voters to protect homeowners, particularly senior citizens, from being taxed out of their homes. It limits the increase in the taxable value of a home to the rate of inflation or 3 percent, whichever is lower.

Throughout the years since Save Our Homes went into effect, particularly since 1998, however, housing values have increased at a much faster rate than 3 percent.

Mayor Rick Baker agrees that Save Our Homes has created property tax inequity across the city and even within neighborhoods.

"There is no doubt that it is not fair," Baker said. "You have to balance against the original purpose of Save Our Homes: to keep from being taxed out of homes against the desire not to have this disparity. It's a balance. You can't have it both ways."

Property taxes are about 17 percent of St. Petersburg's general fund this fiscal year, according to Mike Connors, internal services administrator. The total fund is $540-million, including $91-million from property taxes. Ten years ago, property taxes amounted to $50-million of the $354-million general fund, or about 14 percent.

Because of the tax cap, St. Petersburg has not had full advantage of the rising property values. However, the city is in the midst of a building boom that is bringing luxury condominium towers and shopping centers downtown. Those new revenue sources have allowed the city to keep the property tax rate from increasing. The city has held steady or lowered its tax rate - the multiplier used with the value of a house to figure the property tax bill - for years.

In some cases, higher tax bills and higher home prices have prevented residents from either downsizing or moving to larger quarters.

"It's good and bad," Baker said of the tax disparity. "It's bad when it keeps people from buying another home. It also stimulates people to add on to their homes. That's good for the city; it helps upgrade the overall housing stock."

One of the last tracts to be developed in St. Petersburg was Brighton Bay, off Gandy Boulevard. Property taxes are the highest there because the property is taxed at current market value, and owners do not have any advantage from Save Our Homes.

Council member John Bryan lives in Brighton Bay and represents residents there. He has owned two houses there. He has been in his current one for more than a year.

He thinks Save Our Homes is basically fair even though it places a higher property tax burden on recent buyers. He faced that when he bought in Brighton Bay.

"We had to consider that as part of the deal. We knew it was going to cost us more," Bryan said.

He said that no residents of Brighton Bay have ever complained to him about paying higher taxes than other residents.

"Talk about Wal-Mart and you will hear from every one of them," said Bryan, referring to the community's successful effort to block the country's No. 1 retailer from building a supercenter nearby.

Guy, who is an educational technology consultant, says paying higher taxes than many of his neighbors in the Old Southeast does not bother him.

"It really wasn't that big a consideration," he said. "I think enough people were pioneers long enough ago" to deserve the break in the Old Southeast, which he said remains something of a transitional neighborhood.

Once new owners are in, the cap starts for them. Guy already benefits from it. His house now has a market value of $189,700, according to the appraiser's office. Save Our Homes and the homestead exemption put the taxable value of Guy's house at $133,200, most of the savings coming from the homestead exemption. The longer he stays in the house, the more tax savings from Save Our Homes.

[Last modified March 25, 2006, 04:08:03]