Pima County releases recommended “hold harmless” budget as revenues continue to dropby Pima County News on Apr. 30, 2013, under Board of Supervisors, Pima County, Southern Arizona, Sports, Transportation, Tucson
The proposed budget for Fiscal Year 2013/14, which is scheduled for final adoption in mid-June, is primarily a maintenance-of-effort budget. With no significant expansion or addition of programs, the recommended budget is slightly higher than the current year’s budget, by 2.6 percent.
The County primary levy – which is the sum total of primary property taxes the County collects to fund general operations – has been reduced by more than $39 million over the past four years as a result of declining real estate values. Overall, in light of reduced revenues and despite increased service demands, budgets for General Fund departments have been cut 11.5 percent since Fiscal Year 2007/08, and the County workforce has shrunk by 12.8 percent.
While the sales tax and vehicle license tax are beginning to recover, the market value of existing property in the County is anticipated to decrease 8 percent next fiscal year.
A major source of revenue for the County budget is property tax. The recommended and balanced County budget will reduce total property taxes by $4.3 million for next year. Property taxes fall into two categories – primary and secondary.
To afford key priorities, the County Administrator is proposing to increase the primary property tax rate by 24 cents, from $3.41 per $100 of assessed valuation to $3.65. As a point of reference, 10 years ago, the primary property tax rate was $4.07. The proposed rate would essentially keep the amount of primary property taxes for next year the same as that collected this year and allow the County to:
- Invest $5 million to fix and maintain approximately 100 miles of County roads;
- Supplement the Sheriff’s and County Attorney’s offices by $4 million to replace declining federal and state revenues;
- Replace $4 million that would be lost to the general fund because of declining property values;
- Afford a 1 percent cost-of-living adjustment for employees at the beginning of the fiscal year, with 2 percent to follow at the start of 2014. Employees have not received an across-the-board compensation increase since Fiscal Year 2007/08, with the exception of a 1 percent adjustment related to increased retirement contributions in Fiscal Year 2011/12. (Continued)
With the exception of the Library District, secondary property taxes will decrease. The Library District tax rate will increase by 2.9 cents, bringing the total rate to 37 cents.
Even with the primary and library tax rate bump, the County is still expected to collect $4.3 million less in taxes than it collected this fiscal year due to continued declining property tax valuations and an expected reduction in the secondary tax base next year.
Meanwhile, the County’s projected end balance for this year’s budget is $44 million. Recommended uses of these non-recurring, one-time resources include:
- $15 million to University of Arizona Medical Center – South Campus, which since 2005 has seen an 87 percent increase in adjusted patient days, an increase of 22 percent in emergency department visits and a nearly 300 percent increase in surgical procedures.
- $2.2 million to subsidize three departments hit particularly hard by the prolonged recession: solid waste, development services and the stadium district.
- $3.4 million in a one-time employee compensation award, based on length of employment, to address inflation.
- $22.8 million in general fund reserves. A healthy reserve contributes to an enhanced bond rating, which has saved the County $2 million a year in lower interest payments on bond projects.
“This budget responsibly balances priorities while being sensitive to ongoing economic challenges,” said Pima County Administrator Chuck Huckelberry. “It continues the work we’ve done to keep spending in line with revenues, while ensuring that we make the investments we must to promote opportunity and ensure Pima County continues to move forward.”
To see the Pima County Administrator’s memorandum about the recommended budget, please visit http://www.pima.gov/finance/AdptBdgt/2013-2014/pdf/00btransmit.pdf. Please check out the recommended budget in its entirety at http://www.pima.gov/finance/RecBdgt/2013-2014/index.html