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County makes deep cuts as new-home permits plummet

Citizen Staff Writer

GARRY DUFFY

gduffy@tucsoncitizen.com

The reeling housing market is taking a toll on the department that administers permits for new construction here.

“Our revenues are down 47 percent from what we budgeted,” Carmine DeBonis, director of the Pima County Development Services Department, said this week.

The department over the past year has dropped full-time employee rolls from 182 to 114 positions, and DeBonis said additional staff cuts are likely before the new-housing market begins to right itself – possibly 24 months from now.

“It could be as many as 50″ months, he said.

No services by the department will be eliminated, said DeBonis.

“We will continue all services at reduced levels. It possibly will take longer for those services,” DeBonis said.

The department operates almost entirely on “enterprise funds” – revenue from fees paid by developers for licenses, permits and services. The department’s $12.5 million budget in the fiscal year that began July 1 anticipated $11.5 million of those revenues to come from fees for building permits, licenses, and service charges.

Pima County Administrator Chuck Huckelberry earlier this week ordered departments and agencies to cut budgets another 2.5 percent. The Board of Supervisors called for across-the-board cuts of 5 percent last June when it approved a 2008-2009 fiscal year budget of $1.37 billion that included hiring freezes and no raises for county employees.

DeBonis said his already exceeded Huckelberry’s latest cuts of 2.5 percent.

“We’re up to 6 percent,” DeBonis said.

Housing industry officials are experiencing the market slump from the other end.

“We are at a level now that we haven’t seen since 1989,” Ed Taczanowsky, president of the Southern Arizona Home Builders Association, said Friday.

Area homebuilders in 2005 obtained about 11,900 building permits, Taczanowsky said.

Projections indicate that new -home building permits this calendar year will not exceed about 3,200, Taczanowsky said.

“We are really, really down,” he said.

Industry estimates coincide with DeBonis’ forecast that the housing market will not recover next year, Taczanowsky said.

A report by a consultant for SAHBA indicated that new-housing permits could dip to about 2,900 next year, Taczanowsky said.

Huckelberry blamed most of the county’s budget problems on reductions in state shared revenues to counties from state sales tax revenues, vehicle license tax fees and gasoline tax money from Highway User Revenue Fund receipts.

The county is $3 million to $4 million short of such revenues now and could lag by $12 million to $14 million by the end of the fiscal year without the cuts, Huckelberry said.

Huckelberry has not ruled out additional budget cuts, if needed, before then.

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