City council members have adjusted their spending priorities for the upcoming fiscal year. Most would consider maintaining current service and staff levels a win amid historic budgetary pressures.
St. Petersburg faces a $17.87 million preliminary budget gap, more than double the deficit at this point in fiscal year 2023. Proposed property tax legislation could eliminate $89 million in expected revenue, forcing officials to reduce all non-public safety expenditures by 47% in 2027.
ALSO READ: Ingoglia says St. Petersburg residents overpaid in property taxes by the millions
Budget director Liz Makofske told the council Thursday that, like every year, the administration would eliminate the preliminary shortfall before public hearings in September. The current goal is to “balance the city’s needs with its resources by making difficult decisions” based on shared priorities.
“Imagine literally cutting our budget 50%,” said Council Chair Lisset Hanewicz. “Those are jobs; those are people. That’s services. What happens to the economy of a city? Because government is a partner in making a city work.
“It’s so frustrating to be continuously attacked for something that is necessary in a society.”
The city projects property values and ad valorem taxes to increase slightly again in fiscal year 2027. However, officials believe the era of high year-over-year increases is over.
St. Petersburg expects $426.7 million in general fund revenue and $444.5 million in expenditures. The latter number includes a $10.1 million increase in salaries and wages and a $13 million jump in employee benefits: Blaise Ingoglia, the state’s chief executive officer, admonished the city for those costs a day before the budget priority meeting.
Recent messaging from the Florida Agency for Fiscal Oversight (FAFO) and the Department of Government Efficiency (DOGE) did not deter council members, who want to maintain or increase employment levels to reach long-set goals. Hanewicz noted that developers and residents frequently ask for additional permitting personnel.
The council seemingly reached a consensus on four other budget priorities. Those include investments in public safety, environmental resiliency, infrastructure and St. Petersburg’s tree canopy – particularly after an estimated 20% loss due to Hurricanes Helene and Milton.
Councilmember Copley Gerdes was the first to address the $18 million funding deficit. He is unsure if the city, still rebuilding from the “destruction we saw in 2024,” will bridge that gap “without some serious thoughtfulness, and, frankly, some changes.”
“So, I am completely changing my budget priorities,” Gerdes added. “My budget priorities are, essentially, to stay at current funding levels for non-discretionary spending. And, obviously, to increase at the levels necessary for discretionary spending.”
He proposed a hiring freeze on new full-time employees, unless they fill a current vacancy. Gerdes said the city should not increase spending on new initiatives until the state and, ultimately, voters pass pending property tax legislation.
“I think we need to do everything in our power to make sure we are being conservative enough that if a change were to happen, we can be nimble enough to go along with that, and we’re not putting our core services at risk.”
Tom Greene, assistant city administrator, explained the potential impact of multiple property tax relief-related bills. State leadership has pledged that at least one proposal will be on ballots in November.
House Bill 201 would eliminate non-school property taxes on homesteaded properties. If passed, St. Petersburg’s expected revenue would plummet from $229 million to $89 million.
After funding the police and fire departments, officials would have $99.7 million to split among other administrations. Those include community enrichment, which oversees parks and recreation; general government; public works; city development; and housing and neighborhood services.
A bill that would eliminate property taxes for seniors with homesteaded properties would cut $35 million in funding and result in a 19% service reduction in all non-public safety functions. “We know that something is going to change for us from the state level,” said Councilmember Gina Driscoll.
Driscoll also noted that residents are “paying more and more every year, but they don’t feel like they’re getting more and more in return.” She will have a “hard time telling people with a straight face” that their utility rates will increase by another 8% in October.
“With outside influences in their ear, what we spend is going to be scrutinized more than ever,” Driscoll continued. “And not just by some people from Tallahassee. Our residents are asking, too – where is the money going?”
She said multiple departments, including parks and recreation, stormwater, permitting and code compliance, need additional staff to “solve the problems that we are facing,” and address “issues that residents are bringing to our attention today.”
Multiple council members believe the city should leverage new technology to reduce overhead. “Sometimes you just have to face the facts, and that is the cuts are necessary,” said Councilmember Corey Givens Jr.
“And some of the cuts that we have to make include our staff.”
City administrator Rob Gerdes said all departments must explore reducing operational budgets by 3% and 5%. The leadership team will then “work through” those ideas and identify a balance between Mayor Ken Welch’s and the council’s objectives.
“We’re really just kicking off that process now, and listening to your priorities today,” Gerdes said. “We take those very seriously.”
Council members will continue refining their priority lists. A budget open house event is April 13, followed by capital improvement projects and operations workshops April 23 and May 7, respectively.
Welch will present his recommended budget to the council by July 15. A final workshop is set for July 30.
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