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St. Pete residents get substantial tax cut

By AARON SHAROCKMAN
Published July 13, 2006

ST. PETERSBURG — Mayor Rick Baker’s 5 percent tax rate cut won the unanimous approval of the City Council Thursday, a surprisingly easy political victory that seemed in question just days ago.

The cut represents the largest single decrease in 22 years and sets the city’s millage rate at its lowest level since 1986. Rising property values mean that the savings to homeowners won’t be large. In fact, many second homeowners and businesses will actually see an increase.

But every bit helps, said Baker, noting that the city only controls about one-third of the property tax.

Homeowners next year are expected to pay $6.60 per $1,000 of taxable value, down from $6.95. The rate could still be lowered, but it can’t be raised.

“Residents do need to see some relief,” said Baker, praising the council for its support. Since 1991 St. Petersburg has cut its tax rate 28.6 percent. It is now better equipped to recruit new businesses and residents, Baker said.

Before Thursday, some council members had said the latest tax cut could be too much, too fast. But each opted to vote for the lowered tax rate.

“While I continue to be concerned about our city’s ability to provided the level of service our citizens demand and deserve, I also recognize the impact rising property values and increased insurance costs have had on our citizens,” said council member Rick Kriseman, who earlier expressed reservations about Baker’s plan.

Likewise, council member Jeff Danner said he was convinced the city was maintaining services and taking steps to prepare for a future with less lush property value increases.

And council member James Bennett, who Thursday had the harshest words for the rate decrease — saying it would strap the city from responding to resident concerns — voted for the proposal anyway.

“We have been good stewards of the people’s money,” said council chairman Bill Foster after the 7-0 vote. (Council member John Bryan was traveling and not at Thursday’s meeting).

Baker has now lowered the city’s tax rate in four of his six years as mayor. But in the same time, the city has collected nearly twice as much in property taxes, an estimated $103-million next year, thanks to the robust real estate economy.

With the continued growth and additional future gasoline tax revenues, Baker said he believes the city’s tax rate can even go lower in the future.

Foster said the city should only keep as much money as it needs. Thursday’s vote was a perfect example, he said.

“This is the best opportunity we’ve had to do what we’ve done in a long time,” Foster said.

Next year’s proposed $570-million budget must still be approved by the City Council. Public hearings are scheduled Aug. 31 and Sept. 14. The new budget would go into effect Oct. 1.

Aaron Sharockman can be reached at (727) 892-2273 or asharockman@sptimes.com.

[Last modified July 13, 2006, 23:45:49]