Citizen Staff Writer
CARLI BROSSEAU
brosseau@tucsoncitizen.com
Revisions to the city budget prepared by recently ousted City Manager Mike Hein for next fiscal year could include $17 million in new taxes and fees and a corresponding rise in spending, officials told the Tucson City Council on Tuesday.
Meanwhile, local Realtors are working on a voters’ initiative that would force city government to increase police staffing levels and improve Fire Department response times. The initiative’s backers say it would prevent the city from balancing the budget on the back of public safety.
Details on the budget, including which “revenue enhancements” are proposed, won’t be available until the recommended budget is distributed, said Marie Nemerguth, assistant to the city manager.
The last council update on next fiscal year’s budget included $5 million in new taxes and fees, though none had been specified. At that time, there was still a $1.6 million hole in the budget for the fiscal year that begins July 1.
An additional $12 million in new revenues is now on the table, with the money slated for backpedaling on key elements of Hein’s plan.
Acting City Manager Mike Letcher told the council Tuesday that the new revenues were needed to help shore up a budget that is counting on $68 million less in revenue than the budget adopted for this fiscal year, which ends June 30.
Letcher said officials have already worked into the document $28 million in one-time charges and spending cuts.
The acting city manager highlighted changes from the budget Hein had suggested:
• The amount city employees will concede in benefit reductions or increased costs was pegged at $5.7 million, reduced from $10 million.
• Grants to social service agencies and charities will be reduced by $1 million instead of $4 million.
• The amount going to service pensions for city employees and elected officials increased by $2 million to match actuarial requirements.
• City savings will rise by $1.5 million to 4 percent of its discretionary spending. Officials said earlier that amounts under 5 percent could negatively affect the city’s financial ratings. The council’s goal is 10 percent.
The document also will address holes in some city funds with previously unacknowledged deficits. Among those funds were the city’s self-insurance fund, which pays worker’s compensation claims, as well as legal settlements.
In February the city’s Revenue Enhancement Team, which consists of staffers from the finance, transportation, legal and internal auditing departments, submitted a report recommending several new taxes and fee increases the city could use to balance its budget.
Among the suggestions and the amounts that could be raised:
• A 2 percent tax on residential rental real estate – $12 million.
• Raising residential trash and recycling fees by 4 percent – $986,000.
• A 25 percent increase in most bus fares – $1.8 million, with economy and express fares exempted. The basic fare would go from $1 to $1.25.
• Doubling the bed tax levied on hotels to $2 a night – $1.8 million.
• Utility tax increases on water, power and cable – $5 million.
The first of three public hearings on the budget is scheduled for April 28.
The Tucson Association of Realtors is among those with an opinion on the spending choices.
Realtor Bill Arnold laments the city’s move away from the Financial Sustainability Plan that Hein outlined and the council adopted in 2006.
The plan called for 60 percent of the city’s revenue growth each fiscal year to go toward public safety, the Parks & Recreation Department and street maintenance.
But revenue has fallen more than 20 percent in the past year.
Public safety should still be the priority, Arnold said, citing results of a Tucson Realtors’ survey in which Tucson residents put public safety at the top of their list.
Arnold said that while a draft of the initiative had included wage standards for police, the provision was cut in the final version.
“With the economy the way it is, I don’t think they’ll have trouble finding people,” he said.
Nemerguth said the budget the council will see next week provides for two police training academies, one firefighter academy and support for the courts.
If the initiative makes it to November ballot and passes, it would raise police staffing levels from 1.9 officers per 1,000 residents to 2.4 in five years, adopt the standards of the National Fire Protection Association and require that hiring standards remain constant, a news release sent by Arnold said.
Comments from the police union and department recruiters were not available Tuesday evening.
Councilman Rodney Glassman has asked that the City Council discuss the initiative April 28.
Proposed city budget calls for $17 million in new taxes, fees