Arizona officials predicting layoffs, tax increases as a result of new spending plan

May 28, 2015, 5:10 PM | Updated: 8:53 pm
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PHOENIX (AP) — Fiscal conservatives applauded the $9.1 billion state budget Arizona lawmakers passed in March, boasting that despite a 2.3 percent spending decrease the plan boosted school funding and would help balance the books for years to come without raising taxes.

Less than three months later, however, local officials across the state say they’re feeling the pinch.

Cities, counties and school districts say the spending plan merely shifted a huge financial burden, and they predict it will result in layoffs, tax increases and crumbling roads.

Gila County manager Don McDaniel said state budget cuts have been putting an increasing strain on counties for years and that the latest reductions will continue the negative effect. “It is somewhat like the proverbial Chinese water torture,” he said. “Which drop was the drop that finally drove the detainee into submission?”

Gov. Doug Ducey and conservative legislators passed the budget with $326 million in cuts and no tax increases. The Republican governor defends the reductions as necessary means to address a potential $1 billion shortfall. His office says the plan was fully vetted and that opponents offered no alternatives.

Ducey spokesman Daniel Scarpinato says it’s now up to local leaders to make responsible decisions. “All areas of government are going to have to share in the work to protect taxpayers and to protect the priorities taxpayers care about including public safety and public education,” he said.

Here’s a look at how the cuts are playing out locally:

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COLLEGE TUITION

The state clipped about $100 million from the Arizona’s three public universities and eliminated funding for community colleges in Pima and Maricopa counties.

The result has been university tuition hikes between 3 and 6 percent.

Northern Arizona University has eliminated 60 staff positions, cut travel budgets, restructured debt and halted construction on an engineering lab despite growth in the field, said Tom Bauer, spokesman for NAU.

Arizona State University plans to offset some of the costs with a one-time fee of $320 per student, in addition to tuition increases.

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SCHOOLS

The spending plan increased the overall education budget by about $54 million, but at the same time it slashed $113 million from a program that pays for textbooks, computers and building repairs.

The governor’s office has said it’s a victory for students and teachers. But critics call it a shell game that led to a net funding decrease.

The result is that while teachers in several districts get pay raises, schools are announcing staff layoffs and forgoing new books and building repairs.

For example, Peoria Unified School District saw its budget reduced by nearly $2 million and is expecting to lay off high school support staffers including information technology and clerical workers to save about $200,000.

At the same time, the district will give teachers a raise of about 2 percent, Danielle Airey, director of communications, said.

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ROADS

Cities and counties rely on gas taxes to fix roads and potholes. But they’ll get half of the $60 million they had been promised for 2017.

Gila and Navajo counties and the cities of Tucson, Yuma and Lake Havasu City have a backlog on road repair projects and believe the situation now will get worse under.

“Most of our roads have now failed,” Yuma city administration Greg Wilkinson said. “Now that we have to replace all our roads, those roads are going to cost four times the amount of repaving and obviously we don’t have that money.”

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COUNTY MONEY

The state’s budget included more than $45 million in cost shifts back to counties, according to a County Supervisor’s Association assessment.

Pima and Pinal counties are shouldering more than half of the cost shift because of new provisions in the budget that target counties with higher property tax rates. “The legislation was crafted to single out Pinal and Pima county,” Pima County administrator Chuck Huckelberry said.

Those counties, along with Yuma County, are now among those considering raising taxes even higher to offset the shifts.

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PRESIDENTIAL PRIMARY

In past presidential years, the state picked up most of the cost of White House primary elections. Next year, the counties will pay more than $3 million extra to cover those costs.

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SALES TAX COLLECTION

Beginning this year, cities and counties will pay the Arizona Department of Revenue to collect and distribute their sales taxes. The change is expected to cost them about $17 million.

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JUVENILE DETENTION

Counties are shelling out $12 million to the Arizona Department of Juvenile Corrections to help pay for juvenile detainees.

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Arizona officials predicting layoffs, tax increases as a result of new spending plan