Phoenix Mayor Greg Stanton makes his monthly appearance on Arizona Horizon to discuss issues vital to the state’s largest city.
Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. Phoenix mayor Greg Stanton stops by each month to talk about issues facing the city. Tonight, the mayor is here to discuss, among other things, a sobering five-year budget forecast. Here now is Phoenix mayor Greg Stanton. Good to see you again.
Greg Stanton: It's always good to be here. No place I would rather be.
Ted Simons: Really? Well, that's interesting. We'll see about that. Five-year budget forecast from the city manager, let's just get your general thoughts and we'll dive in from there.
Greg Stanton: First, this upcoming budget year, we have a balanced budget. Just a few years ago, the early projections for this budget year was that we would have been in the red by tens of millions of dollars but because of very smart, forward-thinking decisions by our city council including some very tough controversial decisions that we've talked about on this very show in terms of having to get concessions from our employees in order to meet our budget and some significant pension reform that we have done that is starting to pay off, we took a budget that was projected to be tens of millions in the red and now, we have a balanced budget, a great accomplishment. We have more work to do, our five-year budget forecast which will be presented to our city council tomorrow shows that we are expected to be in deficit in the years to come, not this budget year but in the years to come. We are prepared once again to make the tough decisions to get our budget balanced. There's a reason why we have the highest credit rating of any big city in the country. It's because we have a long-standing tradition of strong fiscal management. I've been able to keep that up during my time as mayor, we're going to keep up that tradition and beyond. We are prepared to make the smart decisions to keep our budget balanced.
Ted Simons: The five-year forecast as you mentioned, next year balanced but then look out, four of the next five years, deficits 30 to $60 million per. How are you going to attack that? What are you going to do to address this?
Greg Stanton: A lot of different things. As we have with our current budget situation, as we prepared to do to get to a balanced budget this year, we tried to be as smart as possible in terms of efficiencies, smarter government, try to do more with less, we have the smallest size of government in 40 plus years at the city in terms of number of employees per capita. We ask our employees to work really hard and they do. We ask them to work smarter and they do. When we can eliminate positions, we eliminate positions at the city of Phoenix. We have engaged in significant pension reform that will save the city -- pension spiking elimination will save the city over $800 million. We're actually doing even more pension reform right now. People got a little frustrated that we're doing more pension reform but if we can come up with policies that are going to save the city money, that's exactly what we're doing. There's a work we need to do. Next year, our pension payment to the state public safety retirement fund is going to go up $25 million from this year. That makes up the bulk of the proposed deficit. One of the things we're going to need to do is ask the state to look at what the city of Phoenix has done in terms of being proactive in pension reform, it's a tough issue but work with our firefighters, work with our police officers, who are coming to the table, asking that the legislature work with them to come up with reasonable pension reform that will save the taxpayers and save cities money. It's time that they do that. If they don't act, the numbers are going to continue to increase for the city that we have to pay to the state public safety pension fund.
Ted Simons: Retirement costs, they are rising faster than revenue. Obviously, you have addressed the issue, you are working on the issue. But with police and fire especially, these pensions are huge and if those are rising faster than revenue, again, what do you do?
Greg Stanton: Well, we were facing the exact same situation when I became mayor on the civilian pension, the civilian pension is the pension that we manage at the city. The exact same scenario I was faced when I first became mayor. We had to make some very tough choices, some unpopular decisions to significantly reduce our costs of the pension and eliminate pension spiking, which is so frustrating for many people. We did it. If you look at our budget forecast for the next few years, the number that is not rising is civilian pensions and in four years, guess what happens? That number starts to decline. We're actually going to be in a declining pension payment situation, not just in terms of the percentage of our budget but in real dollars. We need to do the same reforms with public safety, working with public safety, and the leadership of police and fire is willing to come forward and work with the legislature. I as mayor, the majority of our council, are really asking that the state legislature show leadership, make some tough choices just like we had to do at the city and if you do that we're going to save a lot of money and we can get our budget in a much stronger fiscal position for the years to come.
Ted Simons: I want to get to pensions in a second but you would be raising taxes, you might be cutting city services, reveal options on the table? Not for next year but down the road, four of the next five?
Greg Stanton: If we're not able to get significant pension reform at the state level so that we can better manage our budget at the city level, if they're not able to do what we actually did do at the city, we're going to balance our budget. We're legally required, it's the right thing to do. We have the best credit rating of any big city in the country, not by accident. Not by osmosis but a series of tough policy choices that my predecessors have made and I have made since I have been mayor. So look, I don't want to be in that situation. I think that the leadership of the state is going to step forward and work with police and fire to come up with the appropriate reforms. But if not we are prepared to make tough decisions as I have had to do since I have been mayor and we made those tough decisions. That's why we have a balanced budget, the highest credit rating of any big city.
Ted Simons: The compensation, the impact in 2011 was $70 million from the city, it's going to be $200 million in 2020. Something's got to be done there but I know critics are saying yes, you got next year balanced and that's great but down the line is not so good. They want you and the city in general to start thinking more long-term. The criticism is you're not thinking long-term enough. How do you respond to that?
Greg Stanton: I appreciate any polite suggestions about how we can better run the city. I'm a mayor who keeps an open heart and an open mind. I get my best ideas from the people of Phoenix. So I'm open minded to any suggestions. However, if what we did to get our pension, our civilian pension under control and in a position where just in a few years it's going to be a declining part of our budget, if that isn't long-term leadership and planning, I don't know what is and I'm telling you and I'm telling the people watching this that we need the state to do exactly what the city of Phoenix has done and come up with reasonable, not political approaches, nobody needs to pound the table and try to score political points. We need smart professional people to get in a room and not leave that room until they have a reasonable solution about how they're going to get the system under better fiscal management and control. It's for the good of the taxpayers, it's for the good of the cities. We've done it and we will continue to do it at the city of Phoenix.
Ted Simons: Those same folks, similar numbers of folks say you say pension reform and you talk about civilian pension reform but police and fire, that's a whole different beast there, that you're not pushing hard enough for that reform. How do you respond?
Greg Stanton: There is active discussion going on with the leadership of police, with the leadership of representatives of firefighters, the city of Phoenix, myself and I know a majority of the council are fully supportive of that but it takes two to tango and the state legislature, it doesn't appear that doing significant reform, the system is on the agenda this year, that's really unfortunate because if we got it better under control this year, we might be in a better fiscal position next year and obviously that number is going nowhere but up. I could have taken the same rationale when I first became mayor, don't do anything, let it go, it's politically too difficult, we took a very opposite approach. We took on some very difficult issues. With the support of the people of Phoenix who voted for significant pension reform and we've done right by the people of Phoenix, done right by the taxpayers of Phoenix and so it's critical that the same leadership be shown at the state level.
Ted Simons: So when those folks say you haven't pushed hard enough, you say...
Greg Stanton: We've demonstrated actual leadership. We've shown how it can be done with the civilian pension that we controlled at the city. We've shown that we can get those costs under control. It wasn't easy and it took sacrifice by the employees of the city. We've shown actual leadership and in terms of asking the state to do, look we stand with the police and fire leaders who have gone to the state with a good, solid plan of reform and we need them to actually accept that offer and work with them. Look, you don't have to agree with every proposal that our police officers and firefighter leaders have come forward with but sit in the room and actually get to eventually get to the answer yes, we did it at the city, they can do it at the state.
Ted Simons: The legislature wants also wants to ban city taxes on rent. How much of an impact does that have on Phoenix? Some municipalities are concerned about this.
Greg Stanton: It would be a devastating impact, we have worked so hard to balance our budget. And to have in the middle of the legislative session, to have a bill passed where $30 million annual hit to the city of Phoenix, that is money that directly pays for those police officers and firefighters that we spent much of this discussion talking about. It's what pays for parks and libraries and all the wonderful programs, youth centers and senior centers and a $30 million hit to our budget is not the right time. We have worked so hard to get to this position where we have a strong, fiscal position, a balanced budget, and it's simply the wrong time to pull the rug out from underneath us and to have such a drastic impact, negative impact on our city budget and the wonderful services that we're able to provide to the people of Phoenix.
Ted Simons: Supporters of the bill say it's not fair, especially to lower-income folks because that tax that you hit the landlords with is invariably passed on to them. Valid?
Greg Stanton: Let me say this, look we're at a time in our city's history where we have worked very, very hard to get to a balanced budget position and look, any time there's a revenue source, somebody is going to suggest that it is unfair to one person or another person and we ought to make sure we work towards a revenue source system that is as fair to everyone as possible. But right now, right now, is exactly the wrong time to pass legislation that would devastate our city budget and directly cause significant reductions to our core city services and police and fire make up 75% of our city budget. We are mostly in the public safety business. And we run a lot of other great programs as well, parks, libraries, senior centers and youth centers just to name a few, all would be hurt drastically if that bill were to be passed. So now is not the right time to be pushing forward with that legislation.
Ted Simons: Before you go back to pensions there's talk of AFSCME running a candidate to your left against you because they don't think that you're working hard enough for them and their interests. Your thoughts?
Greg Stanton: Well, as leader of this city, I'm going to do what I believe is in the best interests of the city of Phoenix, for the people of the city of Phoenix. Some people are going to like some of the decisions, some people are not going to like it. Some people are going to like me sometimes, that's the nature of politics, that's the nature of leadership, you're always going to have critics. My suggestion to any organization, if you think I'm the right candidate for mayor, support me. If you think there's another candidate that would be better, let's have a campaign and let's have that discussion. I am not going to change my priorities, I'm not going to act ever other than what I think is in the best interests of the people of Phoenix. It's not going to change the way I lead the city.
Ted Simons: Are you surprised that AFSCME wants a more progressive alternative to you?
Greg Stanton: I am never surprised by politics. Politics, you know, when you're a leader in a political environment, that's what campaigns are for, for people to state -- if they think they've got a stronger position than you, they think they're a stronger leader of the city, then they have every right to do that. I as the mayor, as the leader of the city, am always going to act in what I believe is in the best interests of the people of the city of Phoenix and let the chips fall where they may.
Ted Simons: There is a pension reform committee in action, correct? Give us a quick update on that.
Greg Stanton: They are voted out a proposal and we are going to be deciding whether or not to add that to the ballot in August in the city of Phoenix. It's additional pension reform that will save tens of millions more. It's still additional reforms that will save the city tens of millions of dollars, dozens of millions, if you will, of dollars more in additional pension reform. Look we're always going to look for opportunities to act in the best interests of everyone, not just city employees themselves, but the people of this city, the taxpayers of this city, we're going to try to strike that right balance. That's exactly what we did with this latest round of pension reform and so I do believe that that council will put it on the ballot. I'm going to be supportive of it and I do believe the people of the city of Phoenix as they were in 2013 will be overwhelmingly supportive of additional smart pension reform in the city of Phoenix.
Ted Simons: All right, good to see you, we appreciate it.
Greg Stanton: No place I would rather be, Ted.
Ted Simons: All right.
Greg Stanton:Mayor, Phoenix;