Tuesday, May 20, 2008

Cooking the Books

Posted By on Tue, May 20, 2008 at 4:40 PM

So Tom Jenney of the Arizona chapter of Americans for Prosperity went all wonky on us last week after The Skinny made fun of the stupid “Friend of the Taxpayer” pledge he wants local officials to sign in allegiance to him.

You'll find Jenney's full response down lower in this post, but the gist is this: Jenney said that we were the stupid ones because we said that local governments need to increase spending to deal with inflation and population growth, but his research showed that the city and county were both spending less this year than last year.

“Nintzel is often a keen observer of the state and local economy, but he has apparently missed the dozens of news stories and official reports this year projecting sharp downturns in various streams of tax revenue, including state-shared income and sales tax revenue, which will probably come in below last year’s revenues,” Jenney wrote on his blog and in a press release that people keep forwarding to us.

“Even the spendthrift majorities on the Pima County Board of Supervisors and the Tucson City Council managed to get the news—and have been putting the brakes on spending,” Jenney continued. “So far, the County and City budgets from FY 2009 look relatively modest, with projected spending lower than that of FY 2008.”

First of all, let us say that we agree 100 percent with the “keen observer” stuff.

We’ll also note that Jenney is technically correct: Pima County Administrator Chuck Huckelberry has proposed a total budget of $1.460 billion this year, which is slightly less than the overall budget of $1.482 billion for the current fiscal year, which ends June 30.

But when you’re tossing around more than a billion bucks, it’s a little more complicated than that. Spending in the county’s general fund—the part of the budget that funds day-to-day operation of county government—is increasing from a little less than $489 million to more than $499 million.

The big savings in county government are coming from cutting back on capital projects—which means, in many cases, that the county is putting off projects for the future, when they’ll be more expensive.

However you want to enter that into the ledger, the county will be increasing its overall property-tax levy—the total amount collected in property taxes—from $250 million to $265 million to accommodate the additional spending in the general fund and to make up for anticipated cuts in federal and state funding.

What does that mean? Anyone who supports the Pima County budget doesn’t qualify for the “friend of the taxpayer” merit badge from Jenney’s group.

In the city of Tucson, City Manager Mike Hein has lowered the general-fund budget by $1.7 million, but even Hein admits that’s little more than financial sleight of hand. Operating funds in the city budget are increasing by $82 million, while capital costs are decreasing by about $88 million—and more than $77 million of those cuts are coming out of transportation spending. Ain’t that great news for our overstressed streets?

By the way: Hein is working on the following fiscal year already, which calls for an increase of $10 million in general fund spending to catch up with what he’s not going to be able to spend this year.

The city budget includes a teeny-tiny increase in the property-tax levy of about $600,000, which disqualifies it from receiving that “Friend of the Taxpayer” label from Jenney’s crew.

Yadda yadda yadda—all of this malarkey equals exactly one big “whatevs” to most taxpayers, so before we lose any more readers, let us just say we stand by our larger point:

Elected officials should blow off anyone who asks them for a pledge because they should think about problems like grown-ups rather than behaving like pre-programmed robots.

Anyways: If you’re a glutton for wonky punishment, Jenney and Skinny scribe Jim Nintzel will talk about budgets, revenue streams and the wisdom of taking pledges on the radio between noon and 12:30 p.m. on Charles Heller’s Liberty Watch on KVOI, 690 AM.


Here's Jenney's original letter:


17 May 2008

Re: “Hollow Promise,” The Skinny, May 15 http://www.tucsonweekly.com/gbase/Opinion/Content?oid=oid:110922

To the Tucson Weekly:

Skinny columnist Jim Nintzel finds AFP Arizona’s 2008 Local Government Tax and Spending Pledge to be “stupid” (“Hollow Promise,” May 15), because we are asking local officials to “vow not to support increasing government spending at all.”

Nintzel is often a keen observer of the state and local economy, but he has apparently missed the dozens of news stories and official reports this year projecting sharp downturns in various streams of tax revenue, including state-shared income and sales tax revenue, which will probably come in below last year’s revenues.

Even the spendthrift majorities on the Pima County Board of Supervisors and the Tucson City Council managed to get the news—and have been putting the brakes on spending. So far, the County and City budgets from FY 2009 look relatively modest, with projected spending lower than that of FY 2008.

[Sources for projected budgets:

http://www.pima.gov/finance/PDFs/Budget/RecBdgt/2008-2009/00cbdgtschl.pdf http://www.tucsonaz.gov/budget/docs/09RecBudgetFacts.pdf]

Further, the planned slowdowns in spending come after a year in which local governments went hog-wild with spending. In 2007, Supervisors Bronson, Elias, and Valadez voted to increase the county budget by 15.8 percent, and Tucson’s City Council members voted unanimously to increase the city budget by 14.6 percent. That is more than twice the rate of growth of the Tucson-area economy—even when the economy is in a period of strong growth.

In 2007, the allowable spending increase for the AFP Arizona scorecard was 7 percent, which allowed for population growth, inflation, and real per-capita economic growth. The 2008 tax and spending limits are lower, because of the recession. The people of Pima County and Tucson are going through tough times, and local governments have no business increasing taxes or spending money faster than the economy is growing.

The 2008 Local Government Tax and Spending Pledge is available online here:

Tom Jenney

Arizona Director, Americans for Prosperity

www.aztaxpayers.org

tjenney@afphq.org

(602) 478-0146

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