For Immediate Release
September 2, 2009
The Maricopa County supervisors were hoping for a turnaround in the economy and a boost in tax collections. They are just going to have to wait at least a while longer.
That was the message Wednesday from Deputy County Manager Sandi Wilson and other top budget staffers. General fund revenues from property tax, state shared sales taxes and vehicle license taxes are expected to be sluggish or down over the next months, the supervisors were told.
Several county elected officials, including County Treasurer Charles “Hos” Hoskins, County Recorder Helen Purcell and Clerk of the Court Michael Jeanes attended the special budget briefing.
The county figures follow the same downward trends state officials identified earlier this week by the state Joint Legislative Budget Committee, which reported sales taxes for July down 18 percent from July 2008. Complicating the county budget projections are deep slides in future property valuations and tax revenues as a result of the housing recession. Sandi Wilson estimates a $30 million drop, from $492 million to $469 million, in primary property tax revenues for fiscal year 2011. That declining trend might continue for several years.
“We had a good dialogue today,” Chairman Max W. Wilson said. “We want all the elected officials to be up to date and share in our budget process. We think we are acting very responsibly in a tough budget year to keep taxes low but deliver good service to the public.”
Purcell told the board she was encouraged by an idea to meet regularly with board members and staff in roundtable discussions. She said the board seems “to be moving in the right direction.”
Despite the challenges, county government remains in sound fiscal shape. Despite revenue declines of $75 million and legislatively mandated transfers of $68 million to the state over the past two fiscal years, the county has remained in “structural balance,” with current revenues meeting or exceeding current expenditures. In addition, a reserve fund has been maintained to meet expected contingencies and emergencies, For capital improvements, the county follows a “pay-as-you-go” policy so as to avoid long-term debt financing. The court tower project, for example, if paid through a 20-year bond issue, would accumulate $191 million in additional financing charges.
“Managing our county on fiscally sound conservative principles and practices, as well as utilizing pay-as-you-go philosophies for capital needs and acquisitions, have enabled us to lower the burden on taxpayers of Maricopa County,” commented District 2 Supervisor Don Stapley, of Mesa.
At the close of the 2008-09 fiscal year, the general fund reserve totaled $198 million. Much of the reserve will be used for capital projects, like the criminal court tower now under construction in downtown Phoenix. Though substantial, the reserve fund is now substantially lower than a few years ago. In mid-decade, reserves, used for one-time capital projects and other expenditures, had reached $500 million. In addition to capital improvement projects, the reserve fund includes a budget stabilization fund, like a rainy day fund, set aside for emergencies. Some $78 million was used to pay off debt and lease payments in order to reduce operating expenses, according to OMB documents.
“Historically, Maricopa County has been very prudent when budgeting,” commented Supervisor Fulton Brock, of Chandler. “This has allowed us to remain fairly steady during this economic slump. I am sure that the Board and the other county elected officials can work together over the next few years to keep our structurally balanced budget.”
Supervisor Mary Rose Wilcox said she was pleased other elected county officials attended. “ I think the information presented addressed the reality of our financial situation and that we must all work together to keep the county strong during these very stressful economic times,” she said.