By Tammy Gray-Searles —
The good news for Navajo County is that the governor’s proposal to balance the budget this fiscal year leaves county funds mostly untouched. The bad news is that next year’s budget plan is a whole different story.
“In the governor’s plan, there appears to be no impact to counties,” Government Relations Administrator Hunter Moore told the board of supervisors at a meeting Tuesday. “That’s our first impression. The CSA (County Supervisors Association) is looking at it closer.”
According to Moore, the plan for balancing this year’s state budget relies heavily on a one-time rollover loan and the rollover of additional payments to K-12 schools. He explained to the board that he hasn’t been able to review all the details of the plan, but so far county revenue sources and financial responsibilities will remain the same through the remainder of the fiscal year.
Supervisor David Tenney noted that the news is good, but pointed out that it’s also only a proposal by the governor at this point, and the state legislature still has to formulate and approve a formal budget fix.
Even if the state does not impact county funding in order to balance the budget, Navajo County is still facing an uphill battle to balance its budget. Deputy Finance Director Cris Parisot reported to the board that although state and county sales tax revenues had been on the rise, they dropped unexpectedly last month.
A January report shows that state shared sales tax revenues for December totaled $665,155, which was 8.59 percent less than projected. In December 2009, those revenues totaled $727,658.
County sales tax revenues were also down in December, totaling $379,527, and were 10.61 percent less than the amount predicted in the budget. County sales tax totals for December 2009 were $424,589.
Extending current revenue and expenditure rates out through the remainder of the fiscal year, which ends on June 30, the county will have a deficit of $169,334, according to Parisot. She told the board that the finance department continues to monitor revenues and expenditures closely, and is waiting to see whether sales tax revenues rebound.
While the county struggles to find ways to finish out the current fiscal year in the black, Moore noted that bigger state cuts could be in store for the next fiscal year if the governor’s proposal moves forward.
For fiscal year 2011-12, the governor has outlined nearly $52.4 million in cuts and cost shifts that would affect counties and cities across the state. About $18.8 million of that total would affect cities, while the remainder would be spread among counties.
Known impacts for Navajo County would include an additional $600,000 contribution to the Arizona Long Term Care System and a reduction of approximately $278,000 in Highway User Revenue Funds (HURF). Moore pointed out that the HURF reduction is in addition to cuts already made in previous budget years.
The governor’s plan also includes shifting additional costs for treating sexually violent offenders to counties, and using grants currently awarded for indigent legal defense and to the county attorney’s office to help fund the Department of Public Safety.
Supervisor Tenney noted that Governor Brewer’s plan also includes a $21 million payment from the counties to the state, but does not outline whether all counties would pay a share.
“Last year only Pima and Maricopa counties paid this,” Tenney remarked. “This year it just says ‘counties.’”
Moore noted that the governor’s plan hinges on a number of variables, including getting a waiver from the federal government in order to reduce health-care spending. He told the board that he will provide updates as state budget negotiations continue.
Despite uncertainty at the state level, supervisors approved budgeting guidelines for setting the 2011-12 budget. The guidelines state that there will be no new grant-funded, full-time positions, vacant positions will be held open when possible, special revenue funds will be used to fund salaries and employee expenses as much as possible, no annual raises will be given, and the ongoing 2.5 percent salary reduction will be reviewed in June and January. The document also notes that there will be no budget increases unless they are grant funded, there will be limited capital expenditures for vehicles and equipment, and that there will be budget increases to cover employee related expenses such as increased insurance and retirement fund costs.
Parisot told the board that the guidelines are essentially the same as last year, with the addition of the statement regarding budget increases only in the case of grant funding.
Board members unanimously approved the guidelines and also adopted a strategic plan outlining the county’s goals for 2011-12. County Manager Jimmy Jayne explained that the strategic plan will help guide budget decisions. The main goals outlined in the plan are:
“* Provide excellent customer service.
“* Ensure safe communities.
“* Promote and protect the public health of our citizens.
“* Organization health and fiscal responsibility.
“* Natural resources and cultural preservation.
“* Regional leadership.”