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CSA
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In the October 3, 2008 CSA Update:

Supervisor Stapley, National Leaders Call for Partnership
 
Maricopa County Supervisor Don Stapley, who also serves as President of the National Association of Counties, joined last week with the elected leadership of the National Governors Association, the National Conference of State Legislatures, the Council of State Governments, the United States Conference of Mayors, the National League of Cities and the International City/County Management Association (a group known as the "Big 7") to highlight the important roles state and local government leaders play in solving national issues and to call on the next president to actively engage these leaders when determining national policy.
 
"America's local governments are at the heart of our nation, and we are responsible for interacting with constituents on a regular basis," stated Supervisor Stapley.  "Our constituents, and leaders at every level, will benefit from a strong federal-state-local partnership."
 
Click here to view the group's statement, and letter to the candidates.
 
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Supervisor Archuleta Leads Charge to Renew Federal Commitment to Counties
 
Following weeks of meetings with Arizona's delegation in Washington, D.C., Coconino County Supervisor Liz Archuleta took a moment to celebrate Congressional approval of legislation that will reauthorize the Secure Rural Schools and Communities Act (SRS) and fully fund Payment in Lieu of Taxes (PILT) for an additional four years.  SRS reauthorization was included in the economic recovery package (H.R. 1424) passed by the U.S. Congress this week.   
 
"I'm so glad that members of the U.S. Senate and the U.S. House of Representatives from across the nation recognized the importance of our issues," she stated. The legislation, which is expected to be signed by President Bush, will extend the Secure Rural Schools and Communities Act for four years and fully fund the Payment in Lieu of Taxes program through 2012.  The programs each provide county governments with funding for vital services. Archuleta, who also serves as the Chair of the National Association of Counties' Public Lands Steering Committee, has fought hard to enact legislative protection of these longstanding funding agreements.

 "The roads and schools of rural counties rely on these funding sources," she pointed out.  "This has been the main focus of the Public Lands Steering Committee, and we will continue to fight to protect the dollars for our counties." 

 Governor, Legislature Focus on Budget Challenges

 
Current and prospective members of the legislature gathered at the Capitol this week to hear a grim economic update that will set the tone for the upcoming 2009 legislative session.
 
Elliott Pollack presented the economic outlook and Richard Stavneak, JLBC's Executive Director, outlined the forecast for the state budget.  If revenues do not increase at all over FY08 levels, the current budget (FY09) could see a deficit of $550 million.  If the dollars continue to decrease, as they have for the first two months, the final FY09 deficit could be as much as $1 billion.  The outlook on FY10 is even worse: without significant funds to sweep, the state could be forced to balance a deficit between $1.5 billion and $2.6 billion.
 
Governor Napolitano also addressed the ongoing revenue shortages today, detailing her plans to cut spending throughout the fiscal year.  Her budget office predicts the FY09 budget is facing a deficit between $320 million and $800 million, and outlined a method to deal with the shortfall through a mixture of fund sweeps, agency cuts and unspecified additional budget management options.
 
The Governor met this week with House Speaker Jim Weiers and Senate President Tim Bee, and plans to hold another meeting on November 6.  "My goal is to protect classroom spending for K-12 education, and to ensure that we continue to provide service to vulnerable Arizonans, including children, veterans and seniors," she stated.  "I am absolutely committed to achieving budget balance without increasing taxes."
 
Legislative leadership has also consistently opposed raising taxes to balance the budget, but Speaker Weiers reminded legislators that "We're going to have to make decisions that we would never have contemplated a year ago."
 
Visit The Arizona Republic for additional information.
 
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State Revenues Continue Downward Spiral
 
The presentations by Elliott Pollack and Richard Stavneak (see above article) followed recent news from legislative budget staff that state revenues for August were 11.1 percent below collections for the same month last year, a number that is $90.4 million below FY09 budget forecasts.  The bad news is brought about by downturns in many state revenue streams:
  • Arizona Lottery revenues, which fund numerous local and state priorities, are down 13 percent in the first two months of the fiscal year.  The FY09 budget had removed a previous cap on advertising, a fact that was anticipated to increase lottery revenues by over $100 million, or 22 percent.
  • The Highway User Revenue Fund (HURF), which provides important dollars for state and local transportation projects, is coming in at 2.6 percent lower than it was in the same period of the last fiscal year and is 3.7 percent below FY09 forecasts.  August's revenues were grim, amounting to only $105.1 million - a decrease of 7.3 percent over August of 2007.  The Arizona Department of Transportation believes the August slump reflects slowed fuel activity, caused by July's high gas prices.  FY08 was the first time HURF had declined since FY1992.
  • Sales taxes in August were 5.9 percent lower than they were in the same month last year, an amount that is $38.4 million below forecasts.  August was the eighth consecutive month that has seen reductions in year-over-year comparisons of sales tax incomes.
In his presentation to the legislature, Richard Stavneak said the state would not be able to use many of the fiscal bridges or one-time fixes used in FY10.  When legislators asked Stavneak about options other than agency cuts that could be used to balance the budget, he offered some slight hope, reminding his audience that "necessity is the mother of invention."
 
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County Engineers Seek Update to Study on Transportation Needs
 
The Arizona Association of County Engineers met last week to evaluate the steps necessary to update the Roadway Needs Study to reflect the current status of county roads given the economic downturn and the state budget deficits.  The study, traditionally updated every three to four years, was last updated in 2004.  County personnel believe the information will illustrate the challenges and costs that counties must deal with as they face growth and increased road maintenance needs even during budget shortfalls.
 
The 2008 study is the fourth update of the study, which documents all aspects of county roadway needs.  The most recent study in 2004 found that counties would need to spend about $7 billion over ten years for county roads to meet accepted planning standards.  Even in 2004, before the current economic slowdown, the study predicted a shortfall of $4.5 billion over the ten year period.
 

The engineers will continue to work with CSA and county managers on updating the study and seeking resources to meet statewide transportation needs. 
 
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ADEQ to Host Hearing on Fee Increase

The FY09 budget authorized numerous state agencies to increase fees to offset lump-sum budget cuts required to balance the state deficit, and an upcoming hearing will illustrate how that authority will impact users of solid waste facilities across the state.
 
Though the budget did not require agencies to go through a formal rule-making process in order to temporarily increase fees, the Arizona Department of Environmental Quality will host an informational hearing on the new fees.
 
The fees will be increased for landfill registrations, solid waste plan reviews and special waste management.  Existing facilities that do not currently pay fees will not be impacted by the fee increases.
 
The information hearing will take place at ADEQ (1110 W. Washington Street in Phoenix) on October 6, from 1:30 - 3:00 p.m.
 
Click here to view the ADEQ rule, or contact ADEQ for additional information.
 
The Department of Public Safety, the Department of Health Services and the State Land Department are also implementing additional fees.
 
Calendar
 
Visit the CSA Calendar of Events at www.countysupervisors.org/calendar.
 
 
 
County Supervisors Association of Arizona
1905 W. Washington, Suite 100
Phoenix, Arizona 85009
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