St. Petersburg voters will decide whether to authorize $600 million in infrastructure borrowing this November, a proposal that has divided Mayor Ken Welch and challenger Charlie Crist over how the city should finance improvements to its aging water systems.
During an Oct. 13 mayoral debate hosted by Spectrum Bay News 9, Welch defended the proposed general obligation (GO) bonds, while Crist opposed the measure and proposed reducing the city’s property tax rate by 0.4 mills.
The candidates also discussed Amendment 3, a statewide proposal to expand homestead property tax exemptions. Both oppose the amendment, citing concerns about its potential impact on local government revenue.
While each proposal involves property taxes, the mechanisms – and their financial consequences – differ.
Crist’s proposed millage reduction would lower the rate applied to taxable property values. One mill equals $1 for every $1,000 in taxable value, meaning a 0.4-mill reduction would save property owners approximately $40 annually per $100,000 in taxable value.
Crist estimates the reduction would decrease city revenue by approximately $15 million annually. He has suggested reviewing municipal spending to identify potential savings, while Welch questioned whether those reductions could be achieved without affecting city services.
Amendment 3 would instead reduce the taxable value of qualifying properties by expanding Florida’s homestead exemption for non-school property taxes to $150,000 in 2027, and $250,000 in 2028.
The distinction matters because a lower millage rate generally benefits all taxable properties subject to that levy, while homestead exemptions primarily benefit qualifying owner-occupied residences.
Both approaches can reduce housing costs, but they also reduce revenue available for municipal operations. Depending on how governments respond, the difference could be absorbed through spending reductions, alternative fees or changes to future tax rates.
St. Petersburg estimates Amendment 3 could reduce its annual revenue by $33 million in fiscal year 2028 and $54 million the following year.
The city’s proposed GO Bonds would work differently. Rather than reducing tax collections, the referendum would authorize St. Petersburg to borrow up to $600 million for stormwater, wastewater and drinking water improvements under its St. Pete Agile Resilience (SPAR) program.
General obligation bonds allow governments to finance large capital projects upfront and repay investors over time. Unlike utility revenue bonds, which rely primarily on customer payments, the proposed GO Bonds would be backed by the city’s property-taxing authority.
The city could issue the bonds in multiple installments, with each issuance carrying a repayment period of up to 30 years. Voter approval would authorize the borrowing but would not require the entire $600 million to be issued immediately.
The proposed financing is estimated to require an additional 0.96 mills in property taxes, or $96 annually per $100,000 in taxable property value.
For a property with a taxable value of $300,000, that would amount to approximately $288 per year.
Including interest, the total repayment is estimated at approximately $1 billion under the financing assumptions outlined in voter information materials. Actual costs would depend on interest rates, issuance schedules and the amount borrowed.
The borrowing would help accelerate SPAR, which includes approximately $2.7 billion in priority infrastructure projects aimed at strengthening the city’s water systems against flooding, storm surge and equipment failures.
Those vulnerabilities became particularly apparent during Hurricanes Helene and Milton in 2024, when flooding and storm damage disrupted wastewater operations.
City officials estimate that existing utility-rate funding would allow the priority projects to be completed over approximately 24 years. Additional bond financing could shorten that timeline to 19 years.
Welch supports the proposal as a means of completing improvements sooner without relying exclusively on additional utility-rate increases.
The city estimates that financing an equivalent acceleration through utility rates could cost a typical customer approximately $486 more annually, compared with the proposed bond levy, which would vary according to taxable property value.
That comparison reflects an alternative financing scenario, not an automatic utility increase if voters reject the referendum.
The property-tax approach would distribute costs across residential and commercial property owners based on taxable value, while utility financing would place more of the burden on customers through their bills.
GO Bonds can also carry lower borrowing costs because repayment is secured by taxing authority. However, they create long-term debt obligations, and interest increases the total amount taxpayers ultimately pay.
Changes in property values or exemptions could also affect the millage required to repay the debt – the estimated 0.96-mill levy is not a fixed legal ceiling.
Crist has questioned the need for additional borrowing while residents face rising housing, insurance and utility costs. Although he acknowledges the city’s infrastructure needs, he favors examining spending and alternative financing approaches before committing taxpayers to another long-term obligation.
Welch maintains that delaying the work could leave infrastructure vulnerable for longer and potentially increase future construction costs.
Both candidates said they would support a community oversight panel if the referendum passes.