Mohave County officials have prepared a balanced fiscal 2004 budget of $175.5 million that reflects increased tax revenue because of a growing economy, finance director John Timko said.
"What is happening is the county is in good fiscal shape," Timko said.
"The county is moving forward without tax increases."
Even with an expected $1.8 million shortfall in state funding and no increases in the sales and primary property tax rates, the county will be able to offer a cost-of-living increase for employees, county officials said.
Timko calculated that tax revenue will increase about 7 percent during the new fiscal year, which starts July 1.
And the county will begin the new fiscal year with a cash balance that amounted to $62 million for non-general fund budgets on May 30.
The proposed budget is smaller than the $178.8 million budget for fiscal 2003.
The proposal is subject to change based upon revised revenue projections.
The supervisors are scheduled to adopt the tentative budget July 21 and the final budget Aug.
Timko said the proposed budget for 2004 is lower than the current fiscal year in part because the county issued bonds for improvement districts and debt service that will not generate revenue during fiscal 2004.
While the overall budget might be lower, some revenue sources are increasing.
Revenue from the primary property tax is expected to exceed $20.8 million for 2003-2004, an increase of more than $2.5 million, according to the budget summary.
Primary property taxes go into the general fund, which pays for a variety of county departments and services.
Timko has proposed a general fund budget of $57.4 million, an increase of $1.8 million over the current year.
Revenue from the quarter-percent sales tax, which goes into a building account that is not part of the general fund, is expected to increase by $743,309 to more than $5.1 million.
County finances will be in good shape even though the county stands to lose $1.8 million from the state under the $6.4 billion state budget signed by Gov.
Janet Napolitano on Monday, according to County Manager Ron Walker.
During a June 10 budget workshop, Walker estimated the effect of the state budget would range from $1.3 million to $3 million.
Timko said the county will receive $741,000 less in Highway User Revenue Funds.
Also, as part of legislative negotiation for the recently enacted state budget, the county will pay the state $583,000 and assume $281,000 in costs for the return-to-competency program (in which defendants undergo testing at the Arizona State Hospital).
The county will pay $187,000 more to the Arizona Health Care Cost Containment System.
Supervisor Tom Sockwell said, "It looks like from what I read is we are going to lose about $1.8 million across the board.
I understand that the lion's share of this will come out of HURF and that will impact roadwork here in the county.
It's going to affect everything.
I can't honestly say how it is going to affect the manpower in public works."
Walker said the county will have to absorb the $1.8 million loss without resorting to higher property and sales taxes.
The supervisors have rejected proposals to increase the primary property tax – currently at $1.75 per $100 in assessed valuation – and double the sales tax to a half-cent on the dollar.
Walker said Mohave County is better off financially than many counties in the state.
He said the county is paying for a new headquarters for the Mohave County Sheriff's Office – which is almost finished – an emergency operations center inside the sheriff's building and a proposed administration building.
The county also will absorb $950,000 in higher costs for the state employee retirement system and has budgeted $350,000 to replace aging vehicles, Timko said.
He said a proposed pay hike, which requires approval by the supervisors, would cost the county $528,00 in 2003-2004, with $301,000 of the total coming from the general fund.
The pay hike will amount to 1.5 percent if it goes into effect July 1 or 2 percent if it starts Oct.
1, but would have the same financial effect.
Timko also proposed continuing a freeze on 24 vacant positions, maintaining the number of county employees at 1,176.
The county's general fund is better off in part because the contingency fund is expected to exceed $6.2 million, according to Walker.
The contingency fund was about $1.8 million two years ago.
The contingency fund allows for flexibility in the event of unexpected spending and is not assigned to any specific county department, Timko explained.
If everything goes according to plan, county officials will not touch the contingency fund during the 2003-2004 fiscal year.
Timko said the strategic plan approved by the supervisors calls for having a contingency fund equal to 10 percent of the general fund revenue.