Maricopa County Budget

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Maricopa County Manager David Smith addresses the county’s need to cut $58 million from the current year budget.

Ted Simons
>> Maricopa County is home to more than half of Arizona's population. The county provides a variety of public services including parks and libraries, animal control, air quality, law enforcement and transportation. But sales tax revenue is way down, forcing the county to consider cutting services and jobs to the tune of $58 million this fiscal year and 99 million next year. Here to talk about the latest plans is County Manager David Smith. David, good to have you here. Thanks for joining us.

David Smith
>> Thank you.

Ted Simons
>> Have you seen anything like this sort of shortfall and this sort of projected deficit?

David Smith
>> Well, Ted, I've worked on three different financial turn arounds in my career, in one city and two different counties including Maricopa County back in the early 90s. And so you understand that there is expected things that happen in economic downturns and recession, okay? This is my fifth recession in my 36-year career. But I have never seen -- and in no one's memory in Arizona has anyone seen -- the sales tax go this negative, this deeply, this sharply, without even finding a bottom yet.

Ted Simons
>> And we are still waiting for somewhat -- still waiting for October and November or mostly November?

David Smith
>> Well, we're waiting for all of those numbers. But we are anticipating even worse numbers for October that we'll find out in December.

Ted Simons
>> Right. Was this a falling off the cliff kind of a thing as far as sales tax?

David Smith
>> Really, it was extremely alarming and unpredictable. I mean, we used the best economists. We used extremely conservative projections. It was the first time ever that we had done a budget estimate in the minus numbers for vehicle license tax and sales tax, and even we were over by about 5 or 6 percent. It it's really running minus 8 and we had budgeted minus 2.

Ted Simons
>> Does it suggest too much of a dependency on sales tax revenue coming into the state by way of home sales, auto sales, these sorts of things, to the county, I mean?

David Smith
>> Well, there's the usual discussion about the balance between, you know, say a property tax and an income tax and a sales tax. We don't have incomes -- income tax, we don't even have a share of it the way the cities do. So our main sources of revenue that support say the criminal justice system and the general fund are the vehicle license tax and the sales tax. So yes, there is a dependency, but it seemed to be a reasonable one since even in the downturn in the 90s, sales tax did not go flat or did not go negative. It only went down to like a plus 1 or 2%. So this is so unusual they don't think anybody in the public sector in Arizona was ready for it.

Ted Simons
>> So hiring freezes are in play, I would take. It what kind of jobs are we talking about, and how many of those jobs at risk?

David Smith
>> Well, Ted, just to do the budget that in, we eliminated 437 jobs. And sadly, we have laid off about 90 people, which is kind of -- certainly the most difficult part of this work. And so we'll do another round of cuts in this fiscal year that will deal with that on an anticipated shortfall. And we've asked our departments to go back and do lists of priorities trying to preserve critical services as our number one priority, but then finding any and all ways that we can eliminate administrative overhead, consolidate functions, change business process, go to more applied technologies, et cetera, and get up to an additional 20% cuts on average.

Ted Simons
>> I know that 20% is the target there. And I know the sheriff has come out and said that just can't be done as far as his department is concerned. How do you broach that dynamic?

David Smith
>> Well, what our chairman of the board, Mr. Kanacek has done is brought in all the electeds, we had face-to-faces with them. We ask for good suggestions, creative thoughts in a variety of different ways including ideas from the sheriff, the county attorney, the recorder, all of our elected and so, yes, they have brought forth some ideas that we will implement. And so we certainly understand the public position that in a $330 million budget, you know, that would be 60 some million dollars. On the other hand, as part of this intelligent dialogue, it's going to be a combination of cuts done intelligently that do not effect say response times or safety in the jails, but on the other hand, can eliminate overtime, can eliminate expenses on the administrative side, maybe some of the take-home cars, some of the variety of things. So there are savings that everyone can contribute to in pursuing a structural balance.

Ted Simons
>> What about postponing or getting rid of capital outlay projects, and specifically the criminal court tower? What's the deal with that? Because I know that's going ahead. And yet I wonder if other projects are being stopped.

David Smith
>> Well, the board has looked at our capital situation where we basically save dollars and create a fund where the board can pay cash for its capital infrastructure needs. And so we had no bonded indebtedness at Maricopa County which is unusual anyway. So there is no secondary tax rate that people pay on their county tax bill. What we have done is eliminate all the other fairly large projects to concentrate all of those resources on one major project that is critically needed in terms of the long-term needs of the criminal justice system for it to run efficiently. And that is building a courthouse in downtown Phoenix, the last one being built in 1975 when there was 1.7 million people in the county and now we're serving 4 million with 40,000 felony cases a year.

Ted Simons
>> All right. We'll stop it right there. Good luck to you, sir. You've got your work cut out for you. Thank you so much.

David Smith
>> Thank you for having me, Ted.

David Smith:Maricopa County Manager

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