When the economic tsunami that was the Great Recession started rolling toward shore in 2007, Pima County was able to see it and get its finances to high ground.
Governments that heavily relied on sales taxes, such as the state, had their budgets wrecked immediately as taxable consumer spending fell with the economy.
Pima County, on the other hand, uses property taxes to pay for most of its core services, and property taxes are collected based on valuations made Jan. 1 of the previous year. So for the first two years of the recession, the county continued to collect taxes based on valuations made when the economy was strong and home values were high. That bought the county time to prepare for the devastating flood.
Like all Americans, we tightened our belts and prepared for the hard times ahead. We cut spending, we reduced our workforce and we shrunk the county budget by hundreds of millions of dollars.
Here are some of the hard choices we made during the past seven years:
- The total county workforce was reduced by 1,138 employees.
- County employees went without a pay increase for five years.
- The county reduced the combined property tax levy by $35 million between 2010 and 2014, from $418 million in 2010 to $383 million this year.
- The county reduced General Fund spending by 11.5 percent (except for the Sheriff’s Department).
- The county reduced its total budget by $300 million between 2008 and now, from $1.4 billion to $1.1 billion.
For the fiscal year that starts July 1, the county was again looking at reduced property tax income. The primary tax base in the county began falling in 2011 and has fallen every year since. Next fiscal year it will be about a half-percent less than this fiscal year.
Even though the economy has recovered and is growing again, albeit slowly, the county’s tax base won’t reflect that economic improvement for at least another year, if not two.
Meanwhile, county expenses have increased, especially for public safety. The Sheriff’s Department and the Juvenile Court have each exceeded their budgets this year. The county faced a budget shortfall of more than $20 million.
To make up for the deficit, the board had two choices — cut spending or raise taxes. Since nearly 70 percent of the county’s General Fund budget is personnel services and salaries, the only way to adequately cut spending to balance the budget was to lay off staff. Pima County Administrator Chuck Huckelberry estimated that in order to cover the budget deficit and to meet other, critical needs of the county without raising taxes would require laying off nearly 400 county employees.
Criminal justice accounts for about half of the General Fund budget. If county staff were going to be laid off to balance the budget, a great deal of those layoffs would have to come from the Sheriff’s Department and the various county courts and court services.
All during the recession and its aftermath, this board held the line on the Sheriff’s Department. We squeezed the budgets of other county departments so we didn’t have to cut the Sheriff’s Department. The safety of the citizens of the county had to be paramount.
And that’s the decision we made last week. We put public safety first.
No one likes paying taxes but we do it because, as former Supreme Court Justice Oliver Wendell Holmes Jr., said, “taxes are the price we pay for a civil society.”
This fiscal year, we’ll all have to pay a little more than last year for that civil society. But the fact is, the overwhelming majority of property tax payers will still be paying less tax next year than they did in 2007 thanks to the county’s responsible budgeting the past seven years.
Pima County has weathered the storm. It’s time to start working on restoring services and meeting the needs of county residents.