The prevailing government philosophy of spending high and taxing low during flush times is completely wrong, county Deputy Manager John Nelson told residents at the Citizens Awareness Committee meeting Thursday.
Periods of economic fertility translate into a lower demand for services. Governments should save money and prepare for the next inevitable downturn, Nelson said.
As business dips, revenue falls, people lose jobs, crime rises and demand for services increases at the precise moment that shortfalls force cuts.
“Why are people always surprised?” when recession strikes, Nelson asked. “You can be surprised at the reason, but the fact that it’s coming shouldn’t be a surprise.”
The meeting was supposed to feature Supervisor Tommie Martin, but she brought Nelson to inform the 10 attendees about the county’s financial condition.
No layoffs are expected at the county for the next fiscal year, however, measures like a 90-day hiring freeze on vacant positions will likely help balance next year’s projected $2 million deficit. The potential also exists for no increase in property taxes.
The county will have $11 million in reserves at the end of this fiscal year, which Nelson said is because the county planned for the economic cool-down.
Arizona’s projected $3 billion shortfall next year, and the legislature’s reported proposal to sweep revenue balances from schools or counties is a prime example of spendthrift, he added.
“State legislature is still in session, and that scares the hell out of me.” The state’s tendency to grab money from other entities promotes fiscal irresponsibility, Nelson said.
“If you’re going to lose it, you may as well go out and buy $10,000 toilet seats.”
The county’s tentative $40 million budget will be released in late June, with adoption set for July 14.
Nelson and Martin warned taxpayers to mind the actions of special taxing districts, many of which are not bound to the 2-percent increase in the total amount collected that the county is.
If a taxing board, like a sanitation district, keeps its rate the same, the board is effectively raising taxes. As property values increase, a stagnant rate would collect more money for the district.
“This will resolve itself and we will have good times again,” Nelson said. When the dice starts rolling, people will want programs added and taxes cut.
It’s not wise, Nelson said. “We’re not managing for results. We’re managing for soundbites.”