Tucson has plenty of financial troubles looming in the near future.
But city officials are asking voters to eliminate one of those financial concerns this election by approving a ballot proposition designed to permanently increase what the city can spend each year.
Proposition 401 won’t raise taxes or bring in any new revenue by itself. But it will allow the city to spend an extra $50 million each year, if it can find the money — which it could do by raising taxes or fees in a separate action.
If voters reject the higher spending limits, the city would be forced to make even deeper cuts, city officials say.
The issue dates to 1980, when the state Legislature capped what municipalities can spend in a given year as a means to rein in government spending.
While the limit is adjusted every year based on population growth and inflation, city officials say the adjustment is not enough for Tucson to meet its needs.
The city doesn’t have the money now to cover its expenses, but it will have even less if the base limit isn’t raised.
This year’s budget is $1.3 billion. Some items, like state and federal grants and voter-approved bonds, don’t count toward the limit. With those things deducted, the city’s spending limit is $662 million this year.
Most of the city’s spending growth comes from Tucson Water capital projects, streetcar expenses and inflation related to transit services. If the proposition fails, the city’s expected costs will exceed the state limit by $9.2 million in 2016. The number balloons to $33.4 million two years later.
And that means services will have to be trimmed.
“The only thing we really have to cut are fire, police, road service and parks,” said Mayor Jonathan Rothschild. “And those are four programs that we feel we can’t cut anymore than we already have.”
Rothschild is hopeful the measure passes so if, in the event sales- tax revenue and annexations wind up putting more money into city coffers, the city will have the legal ability to spend it.
“The bottom line is, it’s only allowing us to spend the money to meet our expenses,” Rothschild said.
Right now, even if the city discovered enough money to cover its budget gaps, it wouldn’t matter under state rules, said Joyce Garland, city program director for the office of budget and internal audit. Any money exceeding the spending cap must be put aside. If it is spent, the state would penalize the city.
“If we exceed the limit, the state withholds revenues,” Garland said.
The Legislature gave cities two options to skirt the limits, with both requiring voter approval: home rule or a permanent base increase.
Home rule allows cities to adjust the limits each year to fit their needs, but it requires a vote every four years. Tucson had home rule from 2007-10, but it was voted out in the 2009 election.
A permanent base increase, which is what Tucson is seeking, requires a one-time vote and would meet the city’s spending needs well into the future.
The city last raised the base in 1987 by $46.9 million, which covered city spending needs for the next 25 years.
Although the thought of increasing city spending can worry some taxpayers, the proposition isn’t cause for alarm , Chief Financial Officer Kelly Gottschalk said, because the spending-limit increase won’t raise anyone’s tax bill.
“It’s not about a tax increase. It’s not about a fee increase. It doesn’t change anything about how taxes or fees can be increased in this city,” Gottschalk said. “It just allows us to spend what we collect.”
Voters will also decide the fate of the city’s new mission statement, Plan Tucson.
Over a decade ago, the Legislature required municipalities to draft a plan every 10 years to state their goals and objectives.
While small towns and counties can just adopt their plans, cities with more than 50,000 people must put it before a popular vote.
Tucson’s newest plan contains myriad ways the city should grow, preserve the environment and attract new businesses.
“It’s about what’s the vision for the future of our community,” said Assistant City Manager Albert Elias. “And to try to outline something … that provides future direction for the city.”
The city staff dedicated thousands of hours and held 64 public hearings over the past two years to draft the plan.
Elias said just about all segments of Tucson society put their two cents into the project.
If the measure fails, the city would have to expend even more time and money to place it on a future ballot before the 2015 state-imposed deadline arrives.
Even though the goals listed in the document don’t raise taxes or amend any city codes, the plan still attracted vocal opposition as it was being developed.
Environmentalists said it didn’t go far enough to protect natural resources.
Business interests said economic development took a back seat to urban agriculture and other green projects.
Neighbors complained of Davis-Monthan Air Force Base noise. And D-M supporters complained enough wasn’t done to accommodate them.
But in the end, the city staff cobbled together a document appeasing enough of those concerns to get it on the ballot.
“I think we landed in a place that didn’t satisfy everybody, but in general people were comfortable with it because they had their say in the process,” Elias said. “Based on that, we feel the plan is a pretty good reflection of what we heard.”