Municipal and county courts later this year will have to begin siphoning off potentially millions of dollars in fines and fees to help pay health insurance and retirement benefits for state employees.

“This is revenue sharing in reverse,” said Kevin Adam, a lobbyist for the League of Arizona Cities and Towns. “Obviously, we [municipalities] operate in the same economy as the state, and we’re facing the same kinds of budget issues as the state. But there’s a huge disconnect in taking money intended to help in the operations of the local justice systems and using that money to pay for state health and retirement benefits.”

The $6.5 billion budget for fiscal 2004 requires that once courts reach the levels of fines and fees they collected in fiscal 2003, they will have to give 75 per cent of the revenue received above that threshold to the state.

With population growth in the state averaging around 6.5 per cent to 7 per cent annually, courts in just a few years could find themselves conducting much more business without a commensurate increase in collections of fines and fees. The revenue sources range from fines for parking tickets to processing divorce documents.

“Just for instance, Gilbert one year went from processing 19,000 cases in one year to 29,000 the next,” Mr. Adam said.

Local Fine Funds Could Be Diverted To The State

The Arizona Association of Counties estimates that Maricopa County alone will pay an estimated $3.7 million to the state under the new provision, which took effect with the new fiscal year July 1.

The collection process isn’t clear on what might happen to new fines, Mr. Adam said. The city of Chandler, for instance, will begin imposing a surcharge on fines for domestic violence that will be used to help fund a shelter for victims of domestic violence, and it’s possible that, under the budget bill, all those funds will be diverted to the state, Mr. Adam said.

David Byers, director of the Arizona Administrative Office of the Courts, said the provision initially grew out of efforts to enhance collection of fines and fees throughout the state’s courts.

Local governments, faced with the prospect of reduced revenue sharing from the state, initially agreed to return some of the additional revenue back to the state to help fund the enhanced collections, Mr. Byers said. But by the time the budget negotiations concluded and the governor signed the bill June 17, Mr. Adam said, the provision had “evolved into something else entirely.” A provision in a trailer bill would have repealed the provision, but the trailer bill ultimately failed to pass.

Rep. Tom O’Halleran, R-Dist. 1, said he hopes the provision can be repealed, or at least the impact blunted, in a special session that might occur later this summer. Paul Allvin, a spokesman for Governor Napolitano, said the governor supports repealing the measure as well. —