Thrive
‘Difficult decisions’: St. Pete faces $18M budget gap
“Imagine literally cutting our budget 50%.”
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.
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.”
Councilmember Gina Driscoll (right) advocated for firefighter gear, a previous budget priority that went unfunded last year. Councilmember Deborah Figgs-Sanders wants to ensure libraries, recreation centers and multiple social action programs continue to receive funding. Image: Screengrab.
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.
Julia Burke
February 2, 2026at4:12 pm
When I read an article like this, it really hits HOME what a mess St. Pete gov is.
Lucas Stone
February 2, 2026at3:02 pm
How funny they just got caught for wasting 49M and now they’re telling us that they might be short for next year?! Unbelievable
Andrea Graham
January 31, 2026at4:38 pm
I would love to see a list of some of these terms referred to explained. For example, what exactly do “city development” or “community enrichment” mean? What jobs might have to be cut? Are they critical to the running of the city/government?
With all these developers coming in (and ruining our city in my opinion). I’d think the City would have money to burn!
John Burgess
January 30, 2026at10:56 pm
This says it all. If you do not have time to watch the entire presentation, the last 10-15 minutes is a good summary. The video starts at about 4:50.
https://www.youtube.com/live/2G5PFe_0bq4?si=1UWK8qDSEdtnp0P0
We have a mayor and city council doing what Mamdani is planning for New York, they just do what they want without any oversight or accountability. This will keep going in the same direction until we wake up and vote for competent city leaders.
Welch wants reparations, the city council is approving all of his delusions.
JAMES GILLESPIE
January 30, 2026at9:39 pm
criticism is due because of the revenue shortfall. council and the mayor owe the residents reporting and causes as well as reasonable and timely solutions. whether there is mismanagement or imprudence is a concern. but if the revenue gap is close to the stated figure cuts will be essential and that includes benefits, jobs and salaries are on the table. a fair number of city residents do live pay check to pay check.
Alan DeLisle
January 30, 2026at8:51 pm
So sad to see what Welch has done to a great city. Cancelling Moffitt and the Trop project was so brilliant!!??!! Perhaps the Chamber should celebrate some more?!?!?!!
Ray Tampa
January 30, 2026at11:25 pm
Alan, it is amazing that a small crew in St. Petersburg’s Black community will maintain a dishonest relationship with the community at large. They refuse to acknowledge Welch has failed as mayor. They say things like, “I don’t know anything he has done wrong” and “The mayor is doing a good job.”
There are many examples of poor decisions that resulted in financial waste. I won’t go through the list at this time, but the vast majority of the stakeholders know what I am talking about.
Besides, the mayor has ientified a museum in his list of priorities for prospective developers to include in the Tropicana Field proposals. One such proposal has already suggested a 50,000sf African American Museum. This represents more than 12 times the space of the presently underutilized museum space.This is OBSCENE!
Good governance means listening to the residents and making prudent decisions based on best practices and sound financial considerations. Good governance will get the city’s budget in order in a timely manner.
Donna Kostreva
January 31, 2026at10:34 am
I agree with Mr. Tampa! I must live within my means. It is well past time for City Council to do the same. A new broom sweeps clean and election season arrives every year! We taxpayers cannot stand waste!! Our Sanitation Department, SPFD and SPPD are all top notch and should be fully funded because we ALL need them ! Make cuts Council or you will be “swept away” by the voters! We are watching!
Zach Heath
February 1, 2026at6:43 am
Here’s the list of accomplishments so far
I. Major Development Failures & “Cancelled Deals”
The Rays Stadium Deal Collapse ($1.3 Billion Lost): Ken Welch presided over the collapse of the historic $1.3 billion deal to redevelop the Gas Plant District and build a new Rays stadium. After years of negotiations, the deal fell apart in 2025. Ken Welch then publicly stated he had “no interest” in renegotiating with current ownership, leaving the 86-acre site in limbo and wasting millions in city planning costs.
Killing the Moffitt Cancer Center Deal: Early in his term, Ken Welch unilaterally scrapped a fully approved plan to bring a Moffitt Cancer Center campus and residential towers to downtown St. Petersburg. Ken Welch killed the “transformational” project over a minor dispute regarding the number of affordable housing units, costing the city a massive medical hub and economic engine.
Municipal Marina Deal Termination: Ken Welch cancelled a $50 million private investment deal with Safe Harbor Marinas to redevelop the decaying city marina. He decided the city would take the project “in-house,” despite having no budget to do so. Critics note that Ken Welch budgeted only ~$26 million for a project that experts say requires $85–$110 million, guaranteeing further decay of city assets.
Municipal Services Center (City Hall) Cancellation: Ken Welch cancelled a signed contract to build a new Municipal Services Center (City Hall) without a backup plan. This decision left city staff working in an aging, crumbling building and wasted the years of time and taxpayer money invested in the original agreement.
II. Financial Mismanagement & “Missing Money”
The $207,500 Campaign Theft Scandal: In January 2026, it was revealed that $207,500 was stolen from Ken Welch’s political committee (The Pelican PAC). The theft was allegedly committed by the PAC’s treasurer, Yolanda Brown.
The Negligence: Ken Welch and his team hired Brown despite her having a prior felony embezzlement conviction that was publicly searchable. When asked about the loss, Ken Welch’s response was dismissed by critics as aloof and detached.
The “Illegal” Bonuses Scandal ($250,000): Ken Welch awarded $250,000 in bonuses to 17 high-ranking staff members (ranging from $10,000 to $25,000 each) to celebrate the Rays stadium deal before the deal was even finalized.
The Fallout: After public outcry and questions about legality (as the city had no policy for such bonuses), Ken Welch was forced to embarrassingly rescind the payments and ask staff to return the money.
Tropicana Field Insurance Blunder: To save roughly $250,000 in premiums, the Welch Administration reduced the insurance coverage on Tropicana Field. When Hurricane Milton ripped the roof off in 2024/2025 causing ~$55 million in damages, this decision left the city liable for millions in uncovered repair costs.
Budget Bloat & State Audit: The State of Florida targeted St. Petersburg for an efficiency audit after the Welch Administration increased the city’s general fund budget by 50% ($130 million increase) since 2019, contradicting Ken Welch’s claims of fiscal responsibility.
III. Personnel Scandals & “Toxic Culture”
Deputy Mayor Bullying Scandal (Stephanie Owens): Ken Welch’s first Deputy Mayor, Stephanie Owens, resigned after the City Communications Director accused her of creating a “culture of hostility” and bullying. Ken Welch initially defended Owens and claimed ignorance of the issues, despite reports that he had been warned multiple times about the toxic environment.
Sexual Harassment Cover-up Allegations: A high-ranking official in the Welch Administration was forced to resign following a sexual harassment investigation involving stalking and body-shaming an employee. Critics argued that Ken Welch and his team knew about the behavior long before it became public but failed to act until forced.
The “One-Month” DEI Hire: Ken Welch hired a Chief Equity Officer, Lenice C. Emanuel, who resigned after less than one month on the job (Oct 2 to Oct 25), citing a chaotic and unmanageable work environment.
Police Leadership Exodus: Ken Welch’s handling of the police department caused the abrupt departure of Assistant Chief Antonio Gilliam, who was widely expected to be the next Chief. Gilliam left for a role in Tallahassee, citing broken promises by the Welch Administration.
IV. Crisis Failures & Absenteeism
“Absentee Mayor” Investigation: A Tampa Bay Times investigation revealed that in his first nine months, Ken Welch physically swiped into City Hall for only 34% of workdays.
Sleeping at Home During Hurricanes: During major hurricanes (including Ian), while police and emergency staff were required to sleep on the floor at the Emergency Operations Center, Ken Welch went home to sleep in his own bed. This was viewed by first responders as a major failure of leadership solidarity.
“Welch Piles” (Debris Crisis): Following Hurricanes Helene and Milton, storm debris sat uncollected in St. Petersburg neighborhoods for weeks longer than in surrounding cities. The rotting debris became known locally as “Welch Piles,” creating health hazards and blocking roads.
V. Political & Cultural Flip-Flops
The Mayoral Ball Cancellation: Ken Welch cancelled the long-standing charity “Mayoral Ball” because the proposed theme was “Under the Big Top” (Circus). His administration allegedly felt the theme was racially insensitive. Critics called this an overreaction that killed a major charity event for no substantive reason.
Albert Whitted Airport Flip-Flop: Ken Welch campaigned on protecting the downtown airport, then quietly asked staff to study turning it into condos/development. After a massive public revolt and threats of funding cuts from the FAA, Ken Welch flip-flopped back to supporting the airport.
Mural Removal: Ken Welch ordered the removal of progressive and racial justice street murals to comply with state laws, angering the very progressive base that elected him and leading to accusations of cowardice.
Ryan Todd
January 30, 2026at5:29 pm
Clean house at City Hall. Every single councilman and Staff member.