Those of us who watch the economic reports and fluctuating stock markets are continually asking ourselves, “What’s next?”
County governments also keep a close watch on possible fiscal impacts that may come from economic issues and state and federal policies. The impacts from state or federal legislation can be devastating to local governing agencies.
Mohave County has a long track record of balanced budgets. We have maintained a hiring and wage freeze since 2007 while continuing to deliver services. In Fiscal Year 2011, the county reduced property taxes by 7 percent for a total of a 12 percent reduction over the past two years.
The 1999 quarter-cent sales tax and long-term planning has allowed us to replace many old county buildings with quality, energy-efficient structures at a time when construction costs are low and construction jobs are appreciated. These successes are because of a Mohave County Board of Supervisors that values stability and efficiency.
Mohave County officials understand that counties are arms of the state government. We carry out services mandated by the state in a manner spelled out by state statutes as well as certain non-mandated services such as senior health and nutrition programs. To do so, there are lawfully designated funding mechanisms to pay for the state-mandated services — just as direct services from the state have designated funding.
The state gets income taxes, sales taxes, vehicle license taxes and fees and other revenue streams. Mohave County has a primary property tax, capped by the 2006 Proposition 101, and flood, library and television secondary district taxes. Those dollars are restricted in their use by state statutes.
The county also receives a portion of state-shared sales taxes and a portion of vehicle license and gas taxes. But, the full amount of primary property tax dollars received by Mohave County doesn’t come close to paying for the local criminal justice system. And the amount of dollars this county sends to the state to cover the state’s Arizona Health Care Cost Containment System (AHCCCS) and Long Term Care System (ALTCS) medical welfare programs total close to one-third of the county’s property tax revenues.
The county’s share of gas and vehicle license dollars, known as Highway User Revenue Funds (HURF), pays for 100 percent of the county road work. Mohave County can only use those dollars for road maintenance, crews, machinery and facilities. We cannot use those dollars to supplement law enforcement or county administration.
The funding designations create a successful pattern for counties and the state to work as partners in delivering services to residents.
The state, however, took more than $1 million of Mohave County’s allocated HURF money in FY ’12 to supplement the Arizona Department of Public Safety (DPS) and more than $800,000 to provide additional funding for the Arizona Motor Vehicle Division (MVD). From FY ’08 through FY ’12, the state grabbed close to $3.9 million of Mohave County HURF money for its own needs. The state also took close to $1.4 million in FY ’12 from the county for what it called a “mandated county transfer.”
State sweeps and mandated contributions are arbitrary, unreasonable and virtually impossible to predict during the county budgeting process.
During FY ’12, the state also took Mohave County dollars targeted for indigent defense while increasing the county’s responsibility for several other criminal justice expenses. But the big law and justice cost shift from state to counties is planned to hit in July 2012. That’s when the state plans to shift all Department of Corrections prisoners with sentences of one year or less to county facilities.
If the state carries out its plan, it will cost Mohave County taxpayers a substantial amount of public money as we will require more detention officers, prisoner medical program costs will increase and other security interests will be needed. Increased security responsibilities will force up the costs of housing legitimate jail inmates awaiting trial to make sure both officers and inmates are not threatened by some potentially hardened and dangerous convicts who would also potentially jeopardize the safety of the local community.
Those rising costs will impact the housing of city inmates, as well. Such statewide program shifts, where the Legislature has pushed the cost of a state program further downstream onto counties, have already cost our county taxpayers dearly.
Mohave County supervisors and the County Supervisors Association of Arizona (CSA) have fought hard to deal with the negative impacts from the state’s tendency to off-load expenses to the county taxpayers. Yet, until now, this board has been able to balance its budgets and pay its bills. Once again this year, we are appealing to the Legislature to return to an ethical focus on self reliance and pay state bills with state revenues.
We hope there will be legislators in 2012 who understand that county jails are not built to house convicted state prisoners with unique security issues. We agree with the Arizona Sheriffs Association that the prisoner shift needs to be repealed.
The HURF formula was set a long time ago so that state, county and city highways and roads could be maintained. The state’s HURF sweeps from counties to pay for DPS and MVD need to be eliminated.
Imposing a state mandated county transfer to pay down the state’s overspending is not a sustainable method to balance a budget. Most of us believe that we all should be responsible for our own actions, balance our own budgets and pay our own bills.
This year, in asking “what’s next?” we are hoping the answer is the state Legislature will come up with innovative ways to balance its budget without sweeps and cost shifts.
— Ron Walker is Mohave County manager.