Official: County not in financial ‘crisis’
But loss of funds usurped by state has had ‘a very strong impact’ here
Arizona’s counties have been complaining since the Great Recession era about the state “balancing its budget on the backs of Arizona taxpayers,” in the words of Yuma County District 2 Supervisor Russell McCloud.
County leaders, and municipal ones as well, are waiting to see what happens this time.
Local government officials have accused multiple governors and legislatures of adding to their budget burden by either requiring them to pay for items that used to be covered by the state, or cutting off funding that used to flow to the lower levels of government to fund its own agencies or lower taxes on businesses.
McCloud, a Republican, said Yuma County is not “in crisis,” which is how a few counties — which have gotten to the point of taking out loans to make payroll — were characterized in an Arizona Republic article last week.
“Yuma County is not up against the levy limit. Those that are, just don’t have any way of increasing their budget to take care of pressing issues. For Yuma County it’s still had a very strong impact, and it’s very unfortunate,” he said.
He estimates the state has diverted $11 million in funding from the county since 2008, with just over half, $6 million, representing lost Highway User Revenue Fund revenue, a combination of gas, motor-carrier and vehicle
license taxes, vehicle registration fees and other fees.
Nineteen percent of the HURF revenue collected each year is earmarked for counties and another 30.5 percent to cities, but state budgets have been diverting around $100 million to the Arizona Department of Public Safety, on the grounds that enforcement of the state’s laws by highway patrol officers is a road-related expense.
As the roads deteriorate from lack of maintenance, repairs become a higher priority with residents, making the funding that much more critical.
“We’re trying to put a large emphasis on roadways, and we could really use the money that’s due us to fund what our constituents want done with our roads. These impacts are significant. We could do a lot of road repair with $6 million,” he said.
Other blows the county has taken from the state budget since 2008 include nearly $2 million in other revenues lost, over $900,000 in payments for state programs, and $2.2 million in mandated contributions toward state agencies including the departments of revenue and juvenile corrections, according to the County Supervisors Association of Arizona, of which McCloud is first vice president.
Besides setting millions of dollars aside for teacher raises and other education expenses, Gov. Doug Ducey’s budget proposal released in January again shifts about $96 million of HURF money over to DPS, along with giving the state’s colleges and universities a portion of the state’s shared sales tax, which it hasn’t received before and would cut into what’s being given to counties and cities.
But McCloud remains hopeful.
“It’s not all doom-andgloom. A couple of years ago, it was like, sorry, there’s nothing we can do, you’re going to have these impacts. Last year, they mitigated the impacts with a one-time funding, so it was one-time relief and they made that clear,” he said. That relief was worth about $500,000.
But with the governor’s stated emphasis on K-12 and university education, there is a chance it won’t be back.
“Obviously we’re in the middle of budget negotiations right now, hopefully we’ll know here in a short while more of what the actual budget will look like and we can talk about actual proposals,” Ducey spokesman Patrick Ptak said Friday.
He said Ducey is alert to feedback from all corners of the public sphere when it comes to the budget, and the results of that can be seen in his budget proposals.
“He definitely hears from all sides on issues, he understands the concerns, and I think that’s where you see a lot of his priorities, which were transportation last time and this time we’re hearing it’s education,” Ptak said.
He said the governor has put a strong emphasis on the rural counties since he took office at the beginning of 2015, particularly in relation to economic development. But that is his goal everywhere, Ptak added.
“Around the state, one of his biggest priorities is bringing new companies and new jobs to Arizona, and no matter where that happens that can have an effect on state-shared revenue, for all counties in the state,” he said.
Yuma County has seen about $547,000 in impacts from the state budget for the 2017 fiscal year, which ends June 30. This does not include increased contributions to the Public Safety Personnel Retirement System or other statewide pension plans.
House Appropriations Chairman Don Shooter, RYuma, is one of those in the thick of the budget negotiations, and he said Monday he is expecting the counties to land in the same spot as the same time last year.
“I don’t think they’re going to get any new, great relief, they’re not going to get anything different from last time, if I had to give a generalization. I don’t think they’re going to get a whole lot of remedial help, but we’re not going to hurt them, either,” he said.
He said the biggest issue that needs to be worked out is Ducey’s proposed bonding plan for state universities, which involves redirecting $37 million in sales tax being paid by the schools, allowing them to pay the debt for $1 billion in bonds for new buildings and upgrades to older ones.
Shooter said he doesn’t think the county will lose any shared state sales tax to the university plan.
“I’m just going to say I don’t think that’s going to touch them, so that’s one good thing, maybe.”
Craig Sullivan, executive director of the County Supervisors Association, said he’s reassured that there have been increasing efforts by legislators to get more fiscal relief for local government.
“But there are limited resources, and there is competition for those priorities. At this point we know we’re on the table, we just don’t know how it’s going to look like in the end,” he said.
In the meantime, Yuma County officials are wrapping up their own proposal, set to be presented to the Board of Supervisors when it meets next week.
District 5 County Supervisor Lynne Pancrazi, who was a state legislator for a decade before winning a seat on the county board last November, said Monday the state budget is in its annual “lull,” where negotiations are ongoing, mostly among the Republican majority, and anybody who knows anything isn’t saying much.
“Oh gosh, I hope we don’t have to take any of our state-shared revenues and give them to the universities, because I just had a budget briefing and our state-shared revenues have not gone up to any degree, and our sales tax has not gone up to any degree,” she said.
“So our budget’s going to be nice and tight, so if we don’t get some HURF dollars and if we don’t get our complete share of stateshared revenues that we’ve earned, our budget’s going to be even harder to put together,” she said.