Navajo County

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Navajo County Presents Initial 2014-2015 Budget Proposal

Loss of $2.6 million in Federal and State revenues causing budget shortfalls


Posted: May 27, 2014 By: Hunter Moore


Holbrook, AZ (May 27, 2014)—More than $2.1 million in federal and state revenue cuts present a significant challenge to Navajo County officials who must develop a balanced budget. On Tuesday, May 27, 2014, a preliminary FY14-15 general fund budget was presented to the Navajo County Board of Supervisors to outline the issues and address the problem.

The most significant portion of the shortfall is the loss of a $1.4 million payment the County receives from the federal government each year. PILT, short for Payment in Lieu of Taxes, is a revenue stream that counties across the United States receive for federal land within county boundaries on which local taxes cannot be levied. PILT funding was included in President Obama's 2015 budget. Lawmakers in Washington, however, have said they do not intend to address the issue until well after the mid-term elections in November, which is too late for county budget planning.

“PILT is a significant portion of the County's General Fund,” said Chairman Jesse Thompson. “We have suffered through staggering impacts from State balancing their budget on the County's back. We have feared that we would also be impacted by federal reductions. Now, it appears that those fears may come to reality and to the detriment of our citizens. At best, PILT funding is uncertain.”

The balance of the shortfall, more than $1.2 million, is attributed to the ending of Department of Corrections and U.S. Marshall Contracts, which paid for the housing of prisoners in the Navajo County Jail. The 17 positions that had been funded through the contracts will now need to be paid through the General Fund.

The proposed budget assumes flat operating budgets for County departments, with the exception of an allowance for a 2 percent salary increase for all employees. The proposed budget only assumes a 3 percent projected growth rate in both state shared sales and county sales taxes.

The $2.1 million budget hit comes as the County enters its sixth year of reduced expenditures, fueled by the continuing effects of ongoing State impacts and a relatively tame restart in the local economy. With no other revenue sources to offset the budget shortfall, County officials are proposing a preliminary budget which calls for the collection of the available property tax levy, and uses authority authorized by the state legislature to move funds from special districts to the General Fund. Special districts from which the County proposes drawing funds include the library, health and flood control secondary districts.

The available levy, which is the property tax rate the County is authorized to collect from property owners, is 0.8185 cents per $100 dollars of assessed value. For a home with an assessed value of $100,000, the increase will be $11 per year, or $0.03 per day.

In comparative terms, even with the use of the available levy rate, Navajo County property owners will still pay less than they did in 2010. Based on available data, property owners are expected to pay an estimated $11,334,806 in 2014, which is $1,150,137 less than the amount paid in 2010. Additionally, under the proposed budget, Navajo County would have the fourth lowest property tax rates of Arizona's 15 counties.

The use of the available levy will generate an additional $532,506 for the General Fund, along with the $1,457,736 generated through the use of the special districts levy and transfer, and $191,856 in estimated new revenues, the County believes it can offset the budget shortfall.

Included in the proposed budget is a 2 percent salary adjustment for County employees, who were required to take a 2.5 percent pay decrease from 2008 through 2011. Since 2008, employee take home pay has decreased between 3.6 percent and 14.8 percent due to increased costs of State retirement systems and healthcare plans.

“After enduring six years of continued cuts in revenue from the State, being hit with another $2.1 million in federal and state impacts could be the straw that breaks the camel's back,” said County Manager James Jayne. “Our operations have already been severely cut, scrutinized and refined to the point where we're contending with 75 vacant positions and a reduction in services that impact our citizens. We are making things work with outdated equipment, an aging vehicle fleet and numerous capital needs that are not being addressed. The challenges have been unrelenting. Still, it is our responsibility to present a balanced budget, yet also provide our statutorily required services. So, we had to come up with real solutions. Our team has done a great job, and this budget is being presented with the confidence that we will continue to work together on behalf of the citizens of Navajo County.”

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NAVAJO COUNTY SUPERVISORS HONOR LAST ORIGIONAL CODE TALKER

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NAVAJO COUNTY ANNOUNCES EMERGENCY STAGE II FIRE RESTRICTIONS

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