03/31/2012 10:23 am ET

St. Petersburg Police Headquarters Plan Scrapped, 'Peculiar Smelling' CSI Lab Lives On

In St. Petersburg, Fla., just a few hours northwest of the Miami crime lab TV made famous, the city's forensic team toils in a lab that is anything but high tech.

St. Petersburg's crime scene investigators work in an unventilated room, infamous for "peculiar smells," The St. Petersburg Times reported.

In 2007, to address that problem and others in sections of the city's 80-year-old police department facility, St. Petersburg hatched a financing plan for a new headquarters. Supporters said the plan would yield enough revenue to erect a $64 million 200,000-square-foot police headquarters, reinforced to withstand hurricanes and equipped with proper climate controls to handle DNA evidence. Voters approved a special 1-cent sales tax to fund most of the cost of the police station and other infrastructure improvements this year. To date, however, that special sales tax has generated just $32 million for the police department building.

This week, St. Petersburg's Republican mayor Bill Foster announced that the city is scrapping its police department plans and years of related work because the money for the building simply isn't there. Similar announcements are being made in cities around the country this year, as municipal leaders close public facilities or opt not to open new libraries and jails because of insufficient operating expenses or construction funds. The circumstances vary from city to city, but the root cause is the same: Five years after the recession began and nearly three years after it officially ended, cities and counties are still struggling with sluggish, if not declining, tax revenue.

Tax revenue collected in 2011 was projected to fall on average 2 percent -- a figure that translates into millions of dollars and lots of cuts to public programs and services, according to a National League of Cities analysis released late last year. But state and local government tax revenue collected during the last three months of 2011 pushed the year's collections 4.5 percent ahead of 2010's total, according to census data released last week. The numbers represent a flicker of growth but not enough to shore up some cities.

Certain mid-sized cities -- especially those where household incomes fall below the national average and where property values climbed sharply before the recession, then plummeted as the housing market imploded -- are among the most vulnerable to the continued revenue spiral, said Andrew Reshchovsky, an economist at the University of Wisconsin who studies public finance.

Many of these communities saw so many new houses constructed during the boom and such a rise in property values that elected officials took the popular step of cutting taxes -- the same source of revenue that would be available to support the community now that the boom is just an echo, he said.

"People love tax cuts, and the property tax among taxes is the tax people love to hate," said Reshchovsky. "But they also love their snow plows, public libraries and pools. And it's the property tax, and to a lesser extent the sales tax, that really helps fund that sort of thing at the local level."

That's the path that was followed in St. Petersburg, a city of about 245,000 people where 14 percent live in poverty. In 2007, at the top of the real estate market, Foster helped drive a 10 percent cut in the city's property tax rate and strongly supported the sales tax increase.

Over the last five years, the property tax cut and declining home values have cost the city $94 million, the St. Petersburg Times reported.