As the city of Tucson examines a plethora of new revenue sources in a struggle to balance its budget, Pima County is on much more sound financial footing.
Part of it is because the county relies on a different revenue source than the city. But it also is due to solid financial planning and management by County Administrator Chuck Huckelberry, members of his staff and other county administrators.
When the economy turned sour, Huckelberry ordered across-the-board spending cuts of 7 percent to 10 percent. The Sheriff’s Department was exempt. That early move means the county will be able to cut the property tax rate while still ending the year with a surplus of about $24.5 million.
Compare that with the city. Then-City Manager Mike Hein proposed cuts, but the City Council dithered and took no action – until it decided to fire Hein. Now the city is hunting for new revenue and faces a deficit.
A large part of the city’s problem is its reliance on sales tax revenue. The county relies on property taxes, where revenue lags a year or two behind the economic downturn.
Nonetheless, problems loom for the county. The most significant is the uncertain future and unknown costs of operating University Physicians Healthcare Hospital at Kino Campus.
There is no inexpensive way to provide health care to the county’s indigent population. In past years, the county operated Kino, and it was a financial debacle.
University Physicians Inc., which employs doctors who work in the University of Arizona College of Medicine, took over operation of the hospital in 2004. The group has a 20-year contract to run the hospital but can back out at any time.
In the past five years, the hospital’s losses have been deeper than forecast, largely because every year the hospital provides about $12 million in care to uninsured people.
County Supervisor Ann Day has called for an independent audit of University Physicians’ books – a reasonable request. The county must ensure it is paying the fair costs of running the hospital but not unrelated costs of training UA medical students who work at the hospital.
Nonetheless, in this miserable economy, Pima County is doing a laudable job of providing essential public services within the confines of its budget.