KINGMAN - The County Board of Supervisors, manager and finance director took the state Legislature to task Monday for $4.5 to $5 million in proposed funding cuts to counties in next year's state budget.
County Finance Director John Timko informed the Board during a budget session Monday that the county's 2010 budget is balanced.
However, that could change if the Legislature decides to pull back funding from mandated programs, said County Manager Ron Walker.
"It may come as a surprise to many in the Legislature, but Arizona counties are living and working in the same economy," Walker said. "Instead of having the backbone to take the contributions back from their special interest groups with whom they have cut special tax giveaways, or cutting back on their programs or managing for efficiencies, the legislative leadership chooses to pick the pockets of county, city and town governments.
"You'd think if they have the courage and will to steal, then they would have the courage and will to raise their own money, or cut back and live within their means like everyone else has to do. On second thought, that would take real leadership and management, not politics."
Legislators get away with cutting funds to local government because they are not as close to the people and don't have to deal with the backlash when programs and services are cut, Walker said.
"They will all take responsibility for a balanced budget after the robbery," he said. "But none will take responsibility for their own financial failure."
The county is expecting the Legislature to take more than $3.5
million from the Vehicle License Tax fund, the Highway User Revenue Funds, force more of the cost of the Arizona Long Term Care System, as well as shift other costs from the state to the counties and cities in order to balance the state budget.
"Local services and local citizens will pay the price for the Legislature's failures. Mohave County will be faced with harsher choices of what services to cut back or eliminate next year," Walker said.
Currently, the ALTC, the Arizona Health Care Cost Containment System and the court system cost the county about 69 percent of the revenue the county takes in from taxes, including taxes the county gets back from the state, he said.
If the Legislature cuts the funds the state sends back to the counties, approximately 73 percent of the revenue the county takes in will have to be used to support state programs, Walker said.
The county has managed to keep a balanced budget, despite the economic downturn, by keeping a hiring freeze in place since October 2007 and having county departments cut where they can, Walker said.
The cuts proposed by the Legislature could cause the county to close or curtail hours at county satellite offices in Bullhead and Lake Havasu cities, lay off county employees and cut or eliminate services to seniors and other needy groups, he said.
"We've all heard advocates claim that government should be 'run like a business' and should 'cut the fat,'" Walker said. "Over 60 percent of residents in Mohave County voted for property tax revenue caps. The county complied by cutting the size and costs of county programs like the voters demanded.
"We lowered our tax rate every year since and it is now down by more than a third of what it was in 2005. Our long-term planning has helped us achieve balanced budgets while continuing to deliver services. We will live within our means. However, as the state continues to pay off its over-spending debts with county dollars, the future of Mohave County will be limited. Smaller government means less public service in the final analysis."
Walker encouraged residents to contact their local legislators and the presidents of the Arizona House and Senate.
"Tell them ... 'Thou shalt not steal.' Encourage them to cooperate with each other and the governor and solve their problem, " he said.
Timko updated county officials on the state of the budget, saying county offices had to work hard to make ends meet.
Mohave County Sheriff Tom Sheahan told the Board his office had managed to use only 59 percent of the funds set aside for overtime pay and handled a 47 percent increase in calls.
The Probation Department has 14 officer vacancies, Chief Probation Officer Friend Walker said. He expects to lay off two more people before the end of the month.
The Superior Court and Clerk of Courts have 40 unfilled vacancies, said Kip Anderson, court administrator.
The County Attorney's Office has 16 prosecutors left, said County Attorney Matt Smith. The office is budgeted for 19.
The county could be facing more court expenses in the future as a number of death penalty cases continue through the system, said Dana Hlavac, deputy county manager of Criminal Justice Services.
If the state does not cut funds to counties, Mohave County should be able to operate without cutting employee pay, jobs or drastic cuts in services to county residents.
However, there will be no funding for new county projects, Timko said. Next year's General Fund expense budget is $74 million, $4 million lower than the 2009 expense budget.
The county also plans to drop the property tax rate by 5 percent, from $1.33 per $100,000 of assessed value to $1.26, he said, and is expecting a net decrease of $370,000 in State Shared Sales Tax and Vehicle License Tax.
"As you can see, the trend is not favorable and there is no credible evidence of a reversal in the near term," Timko said.
No new projects
The county will be able to continue to fund the construction of the new jail, Development Services building and remodel of the Negus Building, as well as pay the lease on the Administration Building, he said. But all other projects, including a new justice center, are on hold.
Most counties have enacted a half-cent sales tax in order to combat the loss in revenue. Mohave County currently has a quarter-cent sales tax, he said. The county could increase its sales tax to half a cent, which would generate about $7 million in revenues.
"Although tax increases are unpopular, so will be the impacts of service cuts which will result from a $4-5 million raid by the state legislature," Timko said.
"We have done our job. We have presented a balanced budget for the revenues, which we realistically expect to receive and have reduced expenses to live within our means. Our conservative management during the past 18 months has allowed us to avoid the choices many of our counterparts have to make this year. It certainly is not going to allow us to make significant service level improvements, but we will be able to maintain an adequate level of performance until the economy improves. If the state Legislature would just do its job, without stealing our revenues to fund their programs, we'll be just fine."
Supervisor Buster Johnson also encouraged residents to contact their local legislators.
"I believe the state is probably going to hit us for $5 million," he said.
He told legislators that increasing local taxes in order to compensate for the revenue lost by the Legislature raiding funds was not something he could support without a list of state-mandated projects the county could cut funding to.
"You don't raise taxes when everyone is going bankrupt," Walker said, agreeing with Johnson.
The state appears to be punishing local governments for doing a good job at balancing their budgets during bad economic times, said Supervisor Gary Watson. If the county were to find a new source of revenue, the Legislature would merely raid it, too. And there would be three new representatives on the Board after the next election, he said, because even he wouldn't vote for a person who raised his taxes.
The Legislature has until June 30 to balance the 2010 budget. The county has until Aug. 2 to balance its budget.