St. Pete Could Be Asked to Pay Less in Property Taxes and More at the Same Time
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St Petersburg is heading toward a strange financial crossroads in 2026. On one side, state lawmakers are pushing ideas that could dramatically reduce local property taxes. On the other, city leaders are preparing to ask voters for a new property tax tied directly to stormwater and water infrastructure projects.
Same year. Same ballot. Very different outcomes for residents and city services in St. Petersburg.
The tension isn’t just political. It’s structural. And nobody has fully explained how cities are supposed to make the math work if one side passes and the other fails.
A looming revenue gap City Hall can’t ignore
City officials estimate that St Pete could lose roughly $83 million per year if homesteaded properties were fully exempted from local property taxes, based on projections from the mayor’s administration. That number isn’t abstract. It represents core operating money that currently keeps day to day services running.
City Council leadership has already asked for a full budget stress test. The goal is to understand, in very real terms, what happens if that revenue disappears. Not hypotheticals. Actual cuts, delays, or service changes residents would feel.
What your property taxes are really funding
Property taxes in St Pete are often framed as a catch all, but the reality is far more concentrated.
According to city leadership, nearly all city property tax revenue goes toward police and fire services. When required contributions to community redevelopment areas are removed, those taxes cover more than 90 percent of public safety costs. The general fund fills in the rest while also supporting parks, libraries, administration, and other city functions.
That’s why talk of property tax cuts immediately triggers concern at City Hall. There isn’t a large cushion or a long list of “nice to have” items funded by that revenue.
Why homestead properties are at the center of the debate
As of mid 2024, about 58 percent of St Petersburg homes were classified as homesteaded, meaning they are primary residences with capped assessment increases and existing exemptions.
That makes homestead focused tax relief politically appealing and financially disruptive. When more than half of the city’s housing stock is affected, even small changes ripple quickly through the budget.
Multiple proposals are already moving in Tallahassee
Lawmakers haven’t settled on a single approach. Several property tax reform proposals have already been filed ahead of the 2026 legislative session, including multiple joint resolutions that would require voter approval statewide.
The common thread is reduction or elimination of certain local property taxes. What’s missing is a clear, durable plan for replacing the revenue cities rely on.
The unanswered question: who fills the gap?
City officials have been blunt about their concern. While some proposals carve out protections for schools or law enforcement funding, they do not consistently safeguard fire rescue and other emergency services. More importantly, they do not guarantee replacement funding if local revenue disappears.
That uncertainty is amplified by the state’s own long term budget outlook, which already points to future shortfalls. The idea that the state could simply backfill losses for cities is far from guaranteed.
At the same time, St Pete is preparing its own tax question
Here’s where things get uncomfortable.
Mayor Ken Welch has said the city plans to ask voters later in 2026 to support a large scale stormwater and water infrastructure program. The proposal centers on hundreds of millions of dollars in upgrades, funded through general obligation bonds that would be repaid with property tax revenue.
In plain terms, residents could be asked to vote on lowering property taxes at the state level while approving a new property tax locally to address flooding, drainage, and aging water systems.
Why this debate hits a nerve locally
This isn’t a simple argument between people who like taxes and people who hate them.
Housing costs in St Pete have risen sharply, and tax relief feels meaningful to homeowners already stretched thin. At the same time, the city is facing stronger storms, heavier rainfall, and infrastructure that wasn’t designed for current conditions.
If revenue drops without a replacement, the cost doesn’t disappear. It shows up as slower response times, deferred maintenance, reduced services, or new fees that land unevenly across residents.
What residents should be watching closely
The details will matter more than the slogans.
Watch which state proposals actually advance and how they handle local revenue replacement. Pay attention to what St Pete’s budget stress test identifies as essential versus expendable. And look closely at how the city defines accountability and outcomes for its proposed infrastructure funding.
The choice underneath the noise
At its core, St Pete is being asked to weigh short term tax relief against long term service stability and resilience.
Cutting taxes without a plan feels good until something breaks. Raising taxes without trust feels just as risky.