Council set to debate lowering tax rate today
The mayor proposes shaving the property tax rate 5 percent, putting pressure on the council.
By AARON SHAROCKMAN
Published July 13, 2006
ST. PETERSBURG - After two weeks of sidestepping and delaying, the City Council will finally debate Mayor Rick Baker's proposed 5 percent tax rate reduction plan today, a part of the annual budget ritual that invariably tests the mayor's political clout.
This year, Baker wants the council to accept a lot.
A 5 percent reduction of the city's property tax rate - from $6.95 per $1,000 of taxable value to $6.60 - would mark the largest single-year decrease in the rate in 22 years, dropping to its lowest level since 1986.
The proposal worries some council members, who fear that future budgets could be crushed if property values don't keep rising. Or worse, the council could be forced to increase the tax rate someday, an unenviable political position.
The meeting starts at 3 p.m. today at City Hall, 175 Fifth St. Here are six questions that will help shape the discussion:
1. What could the tax rate cut mean to residents?
A family that owns a home valued at $250,000 and has a $25,000 homestead exemption pays $1,563.75 in city taxes. Factoring in the 3 percent rise in the value of the same property and Baker's proposed rate cut, the same homeowner would pay $1,534.50. Savings: $29.25. (Without any tax rate cut, the tax bill would rise $225.88)
2. What could it mean to businesses and the owners of second home?
Because property values in the city rose 19.2 percent in the past year, Baker's rate cut won't spare properties without a homestead exemption from a tax increase. The exact figures are not known, but business owners and people without homestead exemptions should count on a city tax bill at least 5 percent higher than this year.
3. What about the city?
Even with Baker's proposed tax-rate cut, the city is flush with money. Next year, it expects to collect $103.4-million in property taxes, $12-million more than it did last year and about double what it collected just six years ago. The city, in the meantime, has been able to stash away $10-million in the event of an economic downturn. Baker this year wants to put aside an additional $2-million.
4. Why would anyone fight over a tax rate cut?
Baker's proposal was trumpeted in a city news release in May as the fourth time in six years Baker has proposed lowering the tax rate. The announcement gave Baker the praise, but it put the pressure to deliver on the City Council, which actually approves the budget.
Council members James Bennett, Rick Kriseman and Jeff Danner have suggested the small individual savings a homeowner would experience might be better spent pooled together on city services, like code enforcement or police or parks.
5. What's at stake?
Baker usually gets what he wants and has already said he'd be very surprised if the tax rate cut doesn't pass. But a council standoff could be brewing.Baker's most vocal ally, John Bryan, is traveling and will not be at today's meeting. And if Bennett, Kriseman and Danner were to balk at the 5 percent reduction, a vote could be close. In that scenario, council member Rene Flowers, who voted against a small tax rate reduction in 2003, could be a swing vote.
6. So what happens today?
The eight-member City Council will vote to set the tentative millage rate. Council members can later decide to adjust the rate lower, but not higher. Kriseman, for one, has suggested not implementing Baker's full rate cut, at least immediately. Kriseman says he wants to hear what residents prefer.