Out of Bondage
County proposes to give up on borrowing, go to pay-as-you-go
Pima County Administrator Chuck Huckelberry's proposed budget is loaded with proposals, including an extra $26 million for roads.
And there's some good news: The county is likely to end the fiscal year with a surplus of more than $73 million, which is significantly higher than the projected $40 million, which gives the county $15 million for the contract for Banner Health to run the county-owned Banner–University of Arizona Medical Center South Campus (aka the hospital formerly known as Kino); $10 million for election costs; $5 million for road repair; and $40 million for a fund reserve for next year, among other costs.
Huckelberry estimates that while property taxes vary from household to household (and business to business) based on property values, the average homeowner's tax bill will be more or less the same under his plan.
All that said, the proposal with the biggest long-term impact may be Huckelberry's proposal to move the county away from financing major projects with bond dollars, and instead going to a pay-as-you-go approach.
"It's a huge shift," Huckelberry told The Skinny. "Unless there's some major catastrophe, we won't be going for a bond approval in the near term."
That's because Huckelberry can read trends as well as anyone—and county voters, who have long supported using short-term bonds to build major projects like a downtown courthouse, create new parks or to purchase open space, have recently rejected both a major package that would have provided a wide range of community investment and a second package aimed directly at roads. It's an approach that Maricopa County has been using for some time now.
One thing county critics have consistently gotten wrong was their outrage over the county's debt. Sure, Pima County has more debt than Maricopa County—but Maricopa County is largely incorporated, so the county government doesn't have to do as much as Pima County does, because Pima County has to provide services—street maintenance, sheriff's patrols, etc.—to a lot more people than Maricopa County does.
But Pima's bond debt—which has been mostly approved by voters—has been in short-term borrowing that's been quickly paid off. And that means the county will be largely bond-debt free in just a few years.
Huckelberry is essentially proposing the county move toward reducing the secondary property tax that now pays for debt service while putting aside half of that reduction toward lower property taxes and the other half toward increasing the primary property tax with a goal toward setting aside dollars for major projects. He estimates that under his proposal, the county would have more than $31 million available annually by fiscal year 2023/2024.
Huckelberry's plan is like saving up to buy a new car instead of borrowing to buy a new car. The upside is: You don't have to pay interest on a car payment. The downside, you can't drive the car until you save enough for it.
Pima County Supervisor Sharon Bronson, a Democrat who represents District 3, says she thinks Huckelberry's approach is a "rational strategy," although Pima County has a much smaller tax base than Maricopa, so it doesn't have the same resources that Maricopa has. So even if Pima County does establish some kind of "savings account" for major projects, "it's not going to get us everything we need," says Bronson.
Republican Steve Christy, who represents District 4, says he also likes the idea in concept—though he's worried that the current proposal is too "loosey-goosey" and could lead to Pima County having a massive slush fund that could be tapped for pet projects.
"It's troubling and concerning that Huckelberry has not specified control and oversight," Christy says.
This article has been updated to correct Supervisor Steve Christy's quote.