We’ve heard it time and again from the pundits- this little housing slump will disappear quickly here in Phoenix. After all, this is such a wonderful place to live, the job market will keep expanding, people will keep moving here, and those people will keep spending money. From the sound of things from the Maricopa Board of Supervisors though, things might not be so rosy:
Facing a nasty revenue slump, the Maricopa County Board of Supervisors is expected to approve a plan today that would cut spending and squeeze more bang out of its $2.2 billion budget.
The spending plan is in reaction to a dark fiscal outlook that could darken considerably more over the next several months and even years. Today’s plan is likely the first step to avoid multimillion-dollar budget shortfalls, layoffs and delays of high-profile projects, finance officials said.
"We budgeted with a worst-case scenario in mind," said Supervisor Andy Kunasek. "By the look of things, it appears we weren’t as pessimistic as we should have been and revenue are much worse than expected. But we’ll make the cuts we have to."
Maricopa County’s sales-tax collections are falling far below even economists’ most dismal economic forecasts. Sales-tax revenue makes up about 37 percent of the county’s $1.3 billion general fund. The county’s vehicle-license tax and jail tax, which both contribute to the general fund, also shriveled.
Meanwhile, the state is at least $374 million in the hole, according to a report by the Joint Legislative Budget Committee. Revenue from sales taxes, individual income taxes and corporate income taxes all fell short of forecasts in September, the report said. That trickles down to cities, towns and counties.
Maricopa County anticipated a 3 percent growth in sales tax this fiscal year, but actual figures fell way short. If the trend holds steady, county sales-tax revenue could be $25 million to $35 million in the red this year, said Deputy Budget Director Chris Bradley.
At the same time, the county’s vehicle-license tax, which makes up nearly 11 percent of the general fund, is down 2.3 percent, or $1.2 million, so far this year. The jail tax, which helps pay for jail operations, is off projections by $500,000.
"We’re trying to take swift action to prevent a budget shortfall," said Deputy County Manager Sandi Wilson, who oversees finances. "It could be a lot worse than what we’re seeing, and we want to make sure we get ahead of it."
