City’s budget decisions could hurt the recovery


Published on Monday, July 06, 2009

Give me a break. If I read or hear of another person talking about the City of Tucson’s “tight budget” for the coming fiscal year I think I’ll scream. Nobody would say that about any other organization, business or household budgeting for 7 percent more revenue over the next 12 months.

In a year when some are even broaching the word deflation, the City of Tucson has the nerve to raise revenues at twice what in recent years has been the typical 3 to 4 percent rate of inflation.

What’s worse is that city officials — and the elected leaders supposedly guiding them — are showing they haven’t a clue as to how to manage their budget. Instead of making tough, critical decisions now, they could be setting the economic recovery for this region.

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It’s possible they don’t really believe they’ll get the additional revenues from the new and increased taxes and fees they approved this month. If that’s so, they’re nothing but a bunch of liars who are cooking the books to save face. Either that or maybe they’re stupid.

While households are facing a year in which salaries are not increasing and business are doing their best to try to hold percentage revenue declines to the single digits, the City of Tucson thinks it’s special enough to unilaterally demand more money. Other municipalities in our region — Marana, Oro Valley and Sahuarita — all cut their budgets for next fiscal year anywhere from 7 to 40 percent. Pima County cut its budget about 4½ percent.

I’ve not met new City Manager Mike Letcher but by all accounts he’s a nice guy. He’s a career bureaucrat who is into making decisions through process. Not exactly the qualities of a visionary or a leader. The city’s first budget under his watch showed that.

For an example of how a bloated bureaucracy now could come back to bite the economic recovery, look at the city’s Development Services department. While the department has fewer employees these days, it has been done through attrition. Region-wide, building permits issued in April, down 58 percent from April 2008 and, for the year, the numbers are down 85 percent from what they were in 2006. With such drastic reductions in workload, what are the people in Development Services doing with their time?

Since tax revenues lag behind economic cycles, governments are looking at continued declines in revenues for years to come. Let’s imagine we’ve hit the bottom of the current recession. (We can hope, can’t we?) The way Arizona calculates property taxes means today’s values on property that are at seven-year lows and down more than 11 percent from last year won’t begin to play into tax bills until 2011 and 2012.

Is that when City of Tucson is going to finally realize it has to come to grips with the recession and make cuts?  That would be the time when the city should be hiring to help with the economic recovery.

These days it’s almost an automatic to put the word “tight” in front of the word budget. But it doesn’t fit in the City of Tucson’s case. At the rate they’re going their tight budget is going to hit at the wrong time.

E-mail comments for publication to editor@azbiz.com.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.
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Comments

Joe wrote on Jun 23, 2009 3:49 PM:

" And I thought Avra Valley was bad. Maybe us in the valley can handle this downturn better then the higher class of Tucson. I don't feel sorry for anyone in the worst city in the southwest. Bad roads, bad food, Bad police and everytime I'm in the Tucson city limits I enjoy the Illegels peeing in public on every block or corner. I'll take Avra Valley anyday then your "city" "

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