Supervisors adopt tentative FY21 budget
Budget FY intends to cut tax rate and spend $55M on road repairs
PIMA COUNTY — The Pima County Board of Supervisors adopted the Fiscal Year 2021 tentative budget, which if approved in June will lower the county’s overall property tax rate by 4.5 percent, fix 170 miles of roads and provide over $165 million in capital improvement stimulus to the County’s COVID-19-ravaged economy.
Tuesday’s vote set the spending ceiling on the proposed budget. Supervisors can still change funding amounts for different programs and departments as long as they don’t increase the spending limit set May 19. The Board is scheduled to vote on final budget adoption June 23. The fiscal year begins July 1.
The proposed $1.42 billion budget is higher than the current $1.31 billion budget, but the proposed budget includes more than $65 million in federal CARES Act stimulus funds to help the county pay for the costs of the SARS-CoV-2 pandemic. The CARES grant can only be used for unbudgeted costs related to the pandemic and cannot be used to backfill the revenue hole in the County budget caused by the COVID-19 economic disruption.
Just like the local economy, the effects of the pandemic severely disrupted the County budget, reducing expected revenue by roughly $60 million, a budget hit that was compounded by an increase in state-imposed budget transfers of about $10 million. County Administrator Chuck Huckelberry proposes paying for the $70 million budget shortfall by suspending $15 million in intended facilities maintenance, cutting personnel expenses by 3 percent, slashing travel and training spending, reducing overtime and cutting department expenses countywide by 5 percent.
The pandemic also threatens continuation of the County’s PAYGO program to fund road repairs and capital infrastructure improvements throughout the County by using reductions in debt service tax rates and increases in net assessed property values to offset the costs of PAYGO.
Because the effect of the pandemic is expected to be temporary, the County Administrator is recommending suspending the PAYGO plan for next fiscal year and the Board instead use short-term Certificates of Participation at near-zero interest rates to continue with PAYGO infrastructure funding and road repairs.
Huckelberry especially didn’t want to lose ground on road repairs, funding for which has been a challenge for nearly two decades. The County in 2019 finally solved the transportation funding puzzle with PAYGO, or Pay-As-You-Go, which would augment state shared revenues with money from the General Fund. For FY21, the County is proposing spending $55 million for road repairs, which will pay for about 125 miles of local roads and about 50 miles of collector and arterials. For the local roads, the worst roads according to the County’s rating system will be fixed first.
The tentative budget includes $165 million in capital project funding that will assist the local economy by funding jobs in the construction industry. Among the hundreds of projects to be funded are:
- Construction of the Northwest Service Center on Miracle Mile, which will combine in one location several County services in the Northwest Tucson area and save the County money in the long run by eliminating rent payments;
- New libraries in Vail and Sahuarita areas;
- Extension of Valencia Road from Houghton Road to Old Spanish Trail;
- Air Unit equipment for the Sheriff’s Department;
- And continued renovation and reconstruction of the Historic Courthouse, which will be completed in early 2021 when the University of Arizona’s Gem and Mineral Museum will open, adding to the economic vitality of downtown Tucson.
The tentative budget would accomplish these benefits while significantly reducing the county’s overall tax rate. There are two components to a property tax bill – the assessed value, which is set by the elected County Assessor, and the tax rate, which is set by the Board of Supervisors. The rate is applied to the value by a calculation of $100 of net assessed value. There also are several separate rates the Board sets that determine the overall rate. They are the primary rate, which funds the majority of the General Fund, the Library District, the Flood Control District, and Debt Service on bond funds previously approved by voters.
For FY21, the tentative budget approved by the Board May 19 reduces the combined County property tax rate by nearly 25 cents to $5.3108 per $100 of assessed value. The primary rate would be reduced from $3.9996 to $3.9220, a 2 percent decrease. The Debt Service rate would be reduced from 69 cents to 52 cents, a 25 percent reduction. The rates for the Library, 53.53 cents, and Flood Control, 33.35 cents, would not change.
For a median assessed value home of $154,000, if there were no increase in the home’s assessed value, the combined county tax rates as proposed would result in about a $38 decrease in the tax bill. That amount would change depending on the new assessed value of the home for the FY21 budget year.
The Board also approved the budget limits for the Stadium District, which funds the Kino Sports Complex, and for several dozen facility and improvement districts.