The state's budget shortfall will trickle down and affect Gila County budget, but no county tax increase in expected.
Arizona's state budget is facing a shortfall of approximately $1.2 billion for the current year (2007-2008). The shortfall is likely to jump to $1.8 or $1.9 billion for 2008-2009.
These bleak projections are what Assistant County Manager John Nelson began working with as he developed the parameters Gila County will use to build its 2008-2009 budget.
"The state's shortfall has a trickle-down effect for the county and town budgets," Nelson said.
"Since the economy is down, the county is looking at shortfalls in revenues and what the state is going to pass on to us to balance its budget," said Tommie Martin, Gila County District One Supervisor.
"There are two basic things we find in doing the budget. When the economy goes down, demands for services go up. And an economy on a downturn, can't afford to fund government services. That's the struggle we're dealing with," Nelson said.
"We can't increase taxes, if anything, we need to decrease them," Martin said.
Martin said the county would not increase the tax rate on property -- at least the share of the rate that goes into the general fund.
"It's possible property owners may see an increase in their property taxes that go to the special districts," Martin said. Special districts include school, fire and water districts.
- Two factors make it possible for the county to drop taxes:
It has a $10 million rainy day fund with which it can level out its cash flow and cover shortfalls.
- The increased property valuation, set by the market (what homes are selling for in a given area), will bring in the same revenue or more, even though the plan is to lower the county tax rate. Right now the rate is $4.11 on every $100 of assessed valuation. The county plans to bring the rate down to $3.75 per $100 of assessed valuation.
Nelson has projected the county will have a $10,750,000 general fund budget for 2008-2009. Using this as the guideline, it is not expected the county will have to decrease any services or institute a hiring freeze, he said.
There may be some departments where services are increased. These will probably be the sheriff and court departments and indigent care. Nelson said raises are also part of his projected budget, one for 2.5 percent across the board in July and another for 2.5 percent for length of service in January.