An hourlong discussion Tuesday about Tucson's multi-million dollar budget shortfall showed the divided priorities among the Democrats on the Tucson City Council.
The city is facing a $22 million shortfall in the current fiscal year and a projected $40 million deficit in the next cycle, pushing the council to consider difficult cuts in the coming weeks.
While the city’s chief financial officer, Anna Rosenberry, didn’t offer any specific proposals during the study session, it was clear that there are no sacred cows safe from the pending budget slaughter.
But don’t expect any decisions soon.
While the fiscal year budget for next year will be unveiled in April, the expectation is that the council will begin hearing serious suggestions on how to cut this year’s budget in the coming weeks.
And with only five months left in the fiscal cycle, every week they wait, the harder it will be to fill the $22 million gap.
Last week, Rosenberry outlined four categories that were largely difficult to cut, ranging from contracts signed with third parties, obligations tied to the city charter as well as the state’s pension system, staffing levels for certain departments, and debt service for voter-approved initiatives.
Tuesday’s discussion didn’t come with an agreed-upon list of priorities to address the current budget hole, and instead, several members of the council telegraphed their overall concerns.
For the acute crisis facing the current budget, staff outlined how we got here: Revenues are falling short of predictions made by the city’s budget planners — ranging from less-than-rosy marijuana sales tax revenue to a year-over-year decline in fees tied to city-issued, business-related permits.
Retail sales tax revenues are also down slightly, she noted.
“As we've been talking about for months now, local sales tax revenues are trending below prior year levels,” Rosenberry said. “I've seen the closure of two business establishments within the city, Big Lots and Sam Levitz furniture, and just declines in general visitation to Tucson, possible decline in border traffic from neighboring Mexico due to heightened immigration activities.”
Mayor Regina Romero questioned city staff about how tax cuts made under former Gov. Doug Ducey are continuing to impact the city’s budget. The two-term Democrat has long complained that state tax cuts have impacted the city’s economy, flattening state-shared revenues.
“I know that the Republicans in the state Legislature are talking about creating package of income tax reductions that could highly affect … state shared revenue into the city of Tucson,” Romero said. “I hear talk of a big bill —I'm not going to call it beautiful because it's horrendous and it really, it really could damage the state shared revenue coming from the state.”
Councilwoman Nikki Lee shifted the focus to the city continuing to make the city-run Sun Tran buses free to ride.
She argued that, in light of the massive multi-million dollar shortfall, the council needs to revisit the issue now — not months from now as part of next year’s budget decision.
“We're spending 9.0% of our general fund to subsidize transit. And that is completely out of alignment with every other city, Phoenix pays zero precent for its entire transit system. Mesa is 2.67%,” Lee said.
The council will get its first look at next year’s budget in April, but will have until late June to tweak it.
Her comments about fare-free buses drew a sharp rebuke from newly elected Councilwoman Miranda Schubert, who said she won’t discuss cuts to transit until city administration offers concrete figures for how much free fares are truly costing the city.
“I am interested in a long-term strategy to look for dedicated and sustainable transit funding and want to help combat misinformation and create greater understanding,” Schubert said.
We wrote that Schubert asked for a study on the costs associated with restarting fares several weeks ago, but she is still likely a hard no on reversing the current free fares policy.
“I think that it's important to look at the whole picture of all the decisions being made about the revenue and how Tucson's revenue is or isn't being reinvested back into the projects we need,” Schubert said.
Councilman Paul Cunningham seized on Rosenberry's comments about the newly formed city of San Tan Valley in Maricopa County, and how its establishment will cost the City of Tucson a small slice of the state urban revenue pie.
“We also have a new city in Arizona, the city of San Tan Valley, which will now start participating in the urban revenue share. A new city doesn't grow the pot. It means that there are more cities sharing revenues out of that same pot. And so that's definitely going to be having an impact (on the city of Tucson),” Rosenberry explained.
Cunningham said the unincorporated areas of Vail, Green Valley, and the Catalina Foothills north of Tucson city limits are leaving money on the table by not incorporating.
He argues that if Vail incorporated tomorrow, more money would come into Pima County rather than staying in other communities. And while it would be a small hit to the city’s budget, more money would stay in local coffers to pay for regional needs.
“This is a big part of why we're always behind,” Cunningham said. “That's why our property taxes are higher. That's why we pay more for jail board than other cities. It's just insane to me that people don't understand that.”
And while many of the ideas raised in Tuesday’s budget discussions could help solve the $22 million shortfall, it's clear that the council is still a long way from getting down to the kind of brass tacks decisions that they’ll need to make in coming months to cover the gap.
Investigating the investigator: The Attorney General’s lead investigator in the prosecution of Cochise County Supervisor Tom Crosby was put under an internal investigation and no longer works at the AG’s office, per the Herald-Review’s Terri Jo Neff. It’s not clear why investigator William Knuth is being investigated, but it could throw a wrench in Crosby’s upcoming trial for felony charges related to his refusal to canvass the 2022 election.
None of our reporters are currently under internal investigation.
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Trump’s on the case: President Donald Trump weighed in on the apparent kidnapping of Tucsonan Nancy Guthrie, the Mother of NBC’s “Today” show co-host Savannah Guthrie, saying it’s a “very unusual situation” and that he “always got along very good with Savannah.” And after TMZ reportedly received an alleged ransom note, local station KOLD also received one and sent it to the Sheriff’s Department, which said it is taking the note seriously. Meanwhile, KGUN’s Kenny Darr notes that Tuesday was National Missing Persons Day, and that “nearly 300 people have gone missing or been murdered in Tucson since 1980, with many of those cases still unsolved.”
The anti-news peg: The Auditor General's recent report on TUSD being among the most financially "at risk" districts in the state sounds bad in a headline, but Tucson Sentinel columnist Blake Morlock argues that the report just outlines problems the district has known about for years and is working to address. Even the "bad budgeting” practices, like spending one-time money on ongoing academic intervention specialists, wasn't such a bad idea, considering it seems to have improved student outcomes, he writes.
Protesting between classes: Mountain View High School in the Marana Unified School District is considering suspending students who left campus to protest ICE last Friday as part of a national day of protest, KOLD’s Michael Cooper reports. The protest did not impact classes, and students followed their normal class schedule, the school told Cooper.
Indiana Jones, but for booze: An archaeologist who dug up the “Cactus Saloon” in Downtown Tucson and wrote a book documenting Tucson’s saloon scene from the late 1800s spoke about it with Lauren Gilger on KJZZ’s “The Show.”
“You’d be surprised what is preserved under buildings and asphalt parking lots in both Tucson and in Phoenix,” he said, noting it’s both old west stuff and Native American ruins. “…At one time there were at least 34 separate saloons (in Tucson) for a town of less than 10,000 people.”
Either Tucson City Manager Tim Thomure is a big Lord of the Rings fan, or working on the city’s budget is more epic than we ever imagined.
During Tuesday night’s meeting, Thomure described the steps for the city’s Chief Financial Officer Anna Rosenberry when putting together the next fiscal year budget.
“It will be like something out of Tolkien. There will be heroes, there will be challenges and, at some point, Anna's going to throw a ring into a volcano, at which point, a balanced budget will emerge,” Thomure said.
Godspeed, Anna. We hope that such a trek at least comes with hazard pay.