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Big Spenders: Lobbying costs rise as revenues drop 

Local governments in Arizona fought off budget crises last year by reducing services, raising taxes and, in many cases, spending more money on lobbying services.

Cities, towns, counties and state agencies appear to have spent more money on lobbying activities in 2009 than they did in 2008, according to annual lobbying expense reports filed with the Secretary of State’s Office. All reports were due March 1, although some government bodies missed the deadline and have yet to file.

Public sector lobbying expenses totaled $1.9 million in 2009, though a handful of cities, agencies and others that together spent more than $400,000 in 2008 have yet to file their 2009 annual reports. Public bodies spent about $2.2 million on lobbying in 2008.

The amount of money being spent on lobbying by cities, counties and other government entities is concerning, said Kevin McCarthy, president of the Arizona Tax Research Association, an anti-tax nonprofit organization. He said local governments have a right and often a need to lobby at the Capitol, but he questions whether they need the sheer number of lobbyists they hire.

Some cities and counties contract with multiple outside lobbyists, in addition to the full-time, in-house lobbyists they retain. For example, Maricopa County, the public sector’s leading spender on lobbying, has a full-time lobbyist on staff, but also contracts with outside firms and lobbyists such as Marcus Dell’Artino, Rory Hays, Rip Wilson, Lee Miller, HighGround, Lasota & Peters and Public Policy Partners.

“From our standpoint that’s where the debate would be,” McCarthy said. “How much of this is reasonable?”

Though nearly every city and county in the state has significantly cut spending during the past two years to deal with massive budget shortfalls, lobbying was an area that they couldn’t afford to go cheap on, said Martin Willett, the chief lobbyist for Pima County. The county spent $217,000 on lobbying in 2009 compared to $200,000 in 2008. The 9-percent increase was due to higher rates charged by Willett and outside lobbyists Arthur Chapa and Michael Racy.

Willett said county lobbyists had to spend more time than usual at the Capitol in 2009 due to a plethora of proposed budget fixes from the Legislature and Governor’s Office that would have shifted local governments’ money to the state, as well as the long regular session and multiple special sessions. Considering the millions of dollars at stake for Pima County, Willett said, 2009 would not have been the time to cut back on lobbying efforts.

“We’ve got $20 million in proposals pending at the Legislature right now out of our general fund. Is that where you want to cut, the folks that educate them about the impacts and what they’re doing?” Willett said. “Over the last 20 months, they’ve impacted us by $19 million cumulatively in a dozen or more different ways.”

The town of Queen Creek reported an increase of nearly $10,000 in its 2009 lobbying expenses, though Town Manager John Kross said that number is misleading. Cities and counties often have employees testify on legislation or talk to lawmakers about their concerns, and under state law, that time must be reported as a lobbying expense. If a city employee spends one hour testifying at a committee hearing, the city must report one hour of that employee’s salary as a lobbying expense, and the employee must be registered as a lobbyist with the Secretary of State’s Office.

Kross said Queen Creek actually spent less of its money on lobbying in 2009 because the firm Williams and Associates reduced its fee for the cash-strapped town. The town’s lobbying expenses increased because $13,000 of Kross’ salary was registered as a lobbying expense due to the time he spent at the Capitol.

Kross said his primary goal was to oppose a moratorium on municipal impact fees, which cities charge new housing and commercial developments to pay for the infrastructure they require. Losing the ability to charge those fees would have been devastating to Queen Creek, he said.

“My salary stayed the same,” Kross said. “It’s just me shifting my time.”

The secretary of state’s summary of lobbying expenses for public bodies does not differentiate between employee salaries, like Kross’, and money spent on professional outside lobbyists.

McCarthy said the actual total may be far higher than the one listed by the reports because many public sector entities, such as Maricopa County and Phoenix, keep full-time lobbyists on staff, but report only the time those employees spend on actual lobbying duties at the Capitol. The full salaries, as well as health care, retirement and other benefits, aren’t counted toward the total, he said.

“If the issue is how much money is really being spent by taxpayers to have local governments or state government, for that matter, lobbying at the Capitol, I think you probably have to look beyond what the minimum legal requirements are for reporting and what the real actual costs are,” McCarthy said.

The biggest spenders in public-sector lobbying mostly mirrored the 2008 reports. Maricopa County led the pack with $414,409 in 2009, making it not only the biggest lobbyist spender in the public sector, but in the entire state. The county reported $382,000 in lobbyist spending in 2008, with most of the money going to outside lobbyists.

Maricopa County’s chief lobbyist did not return a call for comment.

Tucson spent $234,900 on lobbyists last year, which was up about $1,000 compared to 2008. Tucson’s lobbyist Mary Okoye said the city lost several staffers who handled some lobbyist duties in 2009 and, as a result, will likely show a drop in lobbyist spending in next year’s reports.

“Next year it will be even less because that (2009) number reflects more people, and now they’re gone,” she said.

According to the Secretary of State’s Office, public bodies report the highest lobbying expenses in the state. The public sector accounted for about $2.2 million of the $3.6 million in lobbying expenses reported to the Secretary of State’s Office in 2008.

Expenditure reports for registered lobbyists and the companies and private sector organizations that hire them in 2009 were not complete as of press time and did not provide an accurate comparison.

Top Spending Public Bodies of 2008:
1. Maricopa County: $382,185
2. City of Tucson: $234,153
3. Pima County: $200,296
4. Northern Arizona University: $176,305
5. City of Phoenix: $158,937*
6. Central Arizona Water Conservation District: $128,767
7. City of Mesa: $109,705
8. Town of Queen Creek: $90,460
9. Arizona State University: $81,876
10. University of Arizona: $76,518
* Phoenix listed $158,937 in 2008, but a city spokesperson said the report is being amended to show an additional $30,000 in lobbying expenditures.

2009 spending by those public bodies:
Maricopa County: $414,409
City of Tucson: $234,937
Pima County: $217,034
Northern Arizona University: $175,839
City of Phoenix: $192,109
Central Arizona Water Conservation District: $115,727
City of Mesa: report not filed
Town of Queen Creek: $99,946
Arizona State University: $77,332
University of Arizona: report not filed

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