Property tax rates are going up an average of $33.40 in Gila County next year per a tentative budget approved last week by the Gila County Board of Supervisors.
The increase, based on an average home value in Gila County of $75,970, amounts to a monthly increase in an average escrow payment of $2.78. The tax rate increase, from 3.97 to 4.41 of assessed valuation translates to a tax increase of 11 percent.
The tentative budget the supervisors approved totals $52.2 million, compared to last year's $49.5 million budget.
"Our population and inflation went up last year by 5.7 percent, and our budget went up $2,733,000," Gila County Finance Director John Nelson said. "That's a 5.5-percent increase, which is pretty much in line with overall population and inflation. Arizona's version of California's Proposition 13 says we have to spend from revenues generated, and that spending can only go up by an amount equal to inflation and population."
The 2001-02 fiscal year budget reflects an increase of $3.2 million in the general fund, which is partially offset by a $1.2 million decrease in enterprise funds. "That's basically our landfill budget," Nelson said, "and the reason it's going down is that we're wrapping up a large expansion project, and we're closing down parts of our two landfills and a couple of old landfills in Tonto Basin and Young that we haven't used in years."
"The difference between the general fund increase and the landfill decrease is $2.7 million, and that pretty much is the story of this year's budget," he said.
A large part of the general fund increase will go toward salaries and benefits for county employees. Nelson is proposing a 5-percent across-the-board salary increase that will cost taxpayers $530,000. A 10.8-percent increase in medical insurance premiums will tack on another $125,000.
"Normal salary increases for counties are about 2.5 percent," County Administrator Steve Besich said. "Last year, we didn't give one and we paid for it.
"Our (employee) turnover went up to 27 percent. We can't afford that; we've got to stop that," Besich said.
"We've done salary surveys against other rural counties, and found we were paying about 10 percent below average," Nelson said.
"I thought a 5-percent increase might slow that down. But we've just heard that Pima County gave a 7.5-percent increase," he said.
Another personnel item in the tentative budget is $295,000 for a sheriff salary market adjustment. "We looked at what all the other rural counties were paying (sheriff's department personnel) and found out that to bring Gila County up to 7.5 percent below the other counties' average, we had to do something," Nelson said.
The average deputy sheriff in rural Arizona earns $30,782 per year, a figure that is expected to rise to $31,552 next year assuming a 2.5 percent salary increase. A Gila County deputy sheriff currently earns $27,031, a figure that will rise to $29,351 with the proposed increase.
The proposed budget also includes funding for 2.5 new positions. "One is an accountant for me," Nelson said. "We've had new reporting requirements put on us that one accountant just can't handle."
The other 1.5 positions constitute a new collection unit for the Globe Justice Court.
"We looked at receivables and collections and need to do a better job," Nelson said. "This should pay for itself, and from both a deterrent and a revenue standpoint, we think that's appropriate."
Both administrators admitted that the tax rate in Gila County is high, but the overall tax burden, they emphasized, places the county in the middle of the pack compared to other Arizona counties.
"I'll guarantee you our primary property tax rate is high," Nelson said. "There's no industry here. But the Department of Revenue comes out with an average tax burden for counties every year and our numbers are very much in the middle," he said.
Gila County residents, for example, will pay an average $751.25 in property taxes for fiscal year 2001-2002, compared to an estimated state average of $813.43. Graham County is lowest at $266.35, while Maricopa County residents pay an average of $869.53.
Besich hopes the worst is over for Gila County taxpayers.
"If you look at the economics of Gila County, we're in a transition phase," he said. "The big sawmill was one of the biggest employers in Payson, and it kind of started with that. Now the domestic copper industry has eroded. Then you see the conditions created by the drought. Then you see the Forest Service picking off permits from the cattle ranching guys a $30-40 million industry."
The bottom line, Besich said, is that Gila County is transitioning from a natural resource-driven economy to "more of a lighter industry, bedroom community, recreation-tourism type of economy."
He pointed out that when he joined the county seven years ago, mines, utilities and railroads made up about 52 percent of assessed value. "Now they're probably down around 20, so there's this huge shift."
Besich believes the future of Gila County will be built on infrastructure. "There are some good things happening the (improvements) of Highway 87, the improvements to 260 are making it much more attractive."
He said the board is working with the Arizona Department of Transportation and the state transportation committee to facilitate projects on highways 60, 88, 70 and 77 in southern Gila County, and that those improvements will have a long-term impact.
"If you look at where ... we'll be in 10 years, I think you'll see just by virtue of our location and the different infrastructures that cross through it that our tax rate should stabilize."
Nelson agreed. "We've been doing everything we can to hold down tax rates through this transition. But at this point, we just couldn't hold it any longer," he said. "I don't think you're going to see this year after year. I think this is a one-time adjustment."
At this point, the approved tentative budget must be published twice, and then a call for a public hearing is issued to allow citizens to provide input, Nelson said. The final budget, covering the 2001-02 fiscal year beginning July 1, must be adopted no later than the second Monday in August.