Local Governments Will Feel Pinch If Proposed State Budget Is Passed

By Tammy Gray-Searles
   The pain was expected, but that doesn’t make it any easier to take. The series of budget bills passed by the Arizona Senate Appropriations Committee make a number of expected deep cuts in funding for state and local programs, but also pulls money from cities and counties to pay for schools and other services traditionally funded by the state.
   Nearly every citizen across the state will feel the impact of the budget cuts, including residents of Navajo County. In addition to taking a combined total of more than $1.7 million in vehicle license taxes from Navajo County, Winslow, Holbrook, Snowflake and Taylor, the budget proposes large cuts to Highway User Revenue Funds (HURF), and would place the burden of paying for certain services, such as justices of the peace, on the backs of local government.
   County Manager James Jayne noted that the proposed budget cuts would take nearly $1.9 million out of the county’s budget. Some of the proposed cuts that would affect the county include reduction of HURF funds by $507,300, a cut to certain mental health funds of $114,500 and a reduction in the state’s portion of justice of the peace salaries that would cost the county $64,343 this year, and much more in future years.
   In addition, the county could be made to pay any increases in the cost of long-term healthcare services for individuals receiving government-funded healthcare.
   One provision in the proposal attempts to protect counties from additional expenses if they have to reduce staff in order to balance their budget. A fact sheet prepared for the bill notes, “Excludes classified civil service employees of a county furloughed to address budget shortfalls from the suspension or reduction in rank appeals process.”
   The county is far from being the only agency affected by the budget cuts. Cities, schools, Northland Pioneer College and local state government offices will all be impacted by the proposed budget cuts.
   Cities are expecting cuts to HURF revenues, as well as vehicle license tax income, Local Transportation Assistance Funds (LTAF) and other state assistance, on top of already dwindling sales tax revenues.
   All local schools will see serious cuts to state aid under the proposed budget. Schools with fewer than 600 pupils in grades kindergarten through eight or nine to 12 will not see as large a reduction as other schools across the state. The reduction in state aid “requires school districts, to the extent possible, to take these reductions against administrative costs.”
   Schools also will not receive some other state aid payments until at least 2011 since the proposed budget defers some state aid for schools that would have been paid in 2010 until July 2011.
   Among the bad news for schools is a tiny bit of good news. A small student transportation cost increase is included in the budget, as well as a provision that allows schools to try to raise funds by selling advertising space at their athletic facilities and on their Web sites.
   Under the proposed state budget, NPC funding could be impacted by a provision that essentially eliminates equalization aid. Under the provision, equalization aid can only be given through a legislative appropriation. The budget also eliminates a “hold harmless” provision that prevents state aid from being reduced if enrollment declines. NPC would also be prohibited from renewing any contracts for wireless communication services.
   Local hospitals, healthcare and emergency service providers could also see their budgets slashed, as the proposed budget reduces the amount that will be paid for ambulance services, and eliminates the state’s temporary medical coverage program and the KidsCare Parents program. Individuals who depend on such programs for healthcare will also feel the pinch as certain benefits are reduced and eligibility is restricted.
   Childcare providers and those who receive childcare assistance through the state could find themselves in a bind as income eligibility levels are reduced in the proposed budget.
   The Navajo County Fair Board might also take a hit if the budget is passed as proposed. The budget proposal calls for pari-mutuel revenues to be deposited into the state’s general fund rather than distributed to other funds, such as the County Fairs Livestock and Agriculture Promotion Fund.
   Although the proposed budget makes serious cuts to the Arizona State Parks Board, it also offers some freedom for the parks department to shift funding from other line items, such as the land conservation fund, to help keep state parks open. It remains unclear whether the shifting of funds will be enough to keep all state parks open during the upcoming fiscal year.
   Local state employees could also be impacted by a provision that allows state agencies to mandate reduced hours for employees. The Arizona Department of Transportation had already implemented such a strategy earlier in the year when local employees were required to take one unpaid day off every pay period.
   Even local ranchers could be affected by the budget, which attempts to save money within the Department of Agriculture by requiring that livestock inspectors conduct an inspection within 48 hours instead of within 12 hours as the law currently requires.
   The proposed budget does open some doors for financing water and wastewater projects, however, by removing election requirements for financing of water and wastewater projects. Essentially, it would allow cities to receive federal stimulus money for certain projects without requiring voter approval.
   Although the series of bills that comprise the budget have passed out of the Senate Appropriations Committee, they still must be approved by a majority of the legislators and by the governor. Some changes in the budget are expected, but none that will eliminate the pain of the necessary spending cuts.
   “We continue to work with the members of the Senate and House, as well as the governor to do what is right for Arizona during this difficult time,” Senate Appropriations Committee Chairman Russell Pearce said regarding the proposed budget.