Voters will decide whether city can lift state spending cap

2013-07-13T00:00:00Z Voters will decide whether city can lift state spending capDarren DaRonco Arizona Daily Star Arizona Daily Star
July 13, 2013 12:00 am  • 

Tucson faces a financial future heavy with ballooning pensions, streetcar costs and more. But it hopes to take one major financial concern off the list by asking voters to approve a $50 million increase to what it can spend in a given year.

The request, which will be on the November ballot, won't raise taxes or bring in any other new revenues, but it will authorize the city to spend an extra $50 million each year, if it can find the money.

If voters turn down the measure, the city would be forced to make even deeper cuts, city officials say.

The issue dates to 1980, when the state Legislature capped what municipalities can spend in a given year as a means to rein in government spending.

While the limit is adjusted from year to year to allow for population growth and inflation, city officials say the adjustment is not enough for Tucson to meet its needs.

The city budget is $1.3 billion this year. Some items, like state and federal grants, voter approved bonds and money from the Regional Transportation Authority, don't count toward the limit. With those things deducted, the city's limit this year is $662 million.

If nothing's done by 2016, the city's expected costs will exceed the state limit by $9.2 million. That number grows to $33.4 million two years later.

Most of the spending growth comes from Tucson Water capital projects, streetcar expenses and inflation related to transit services.

Finance director Kelly Gottschalk said the city doesn't have the money to cover its future obligations. But if the limit isn't raised it will have even less, Gottschalk said. And that could mean reductions in services the city offers.

"We have significant capital improvements, required by federal (mandates), to provide the safest and cleanest water," Gottschalk said. "And that's an expensive thing in a city this size. We wouldn't be able to make those improvements" without a spending-limit increase.

Right now, even if the city finds the money to cover its shortages, it wouldn't matter under state rules. The state requires any money over the spending cap must be put aside. If not, the municipality could face costly penalties.

"So even if we got some windfall, we wouldn't be able to use it," Gottschalk said.

Cities have two options to get around the limits, both requiring voter/taxpayer approval: home rule or a permanent base increase.

Home Rule allows the city to adjust the limits each year to whatever fits their needs, but it requires voter approval every four years. Tucson had home rule from 2007-10, but it was voted out in the 2009 election.

A permanent base increase only requires a single vote and, if approved, would meet the city's spending needs well into the future.

The city last raised the base in 1987 by $46.9 million which was good enough to meet city spending needs for over two decades.

Although talk of increasing how much the city can spend usually sends chills down taxpayers' spines, Gottschalk said the spending-limit increase won't raise any additional revenue and wouldn't result in a bigger tax bill for residents. It would just let the city spend any money it collects.

Councilwoman Shirley Scott echoed Gottschalk, and said the city isn't allowed to spend money it doesn't have.

Some folks might say, "It looks to me as though you're going to go spend a lot of money you don't have," Scott said during a recent council meeting. "And that is not the case. The case is … the city cannot spend more than it gets in."

Scott said the permanent adjustment would also free the city from the legislative interference, at least for a while.

"The state should get out of our face and not tell us what we can and cannot do in this case," Scott said.

Now that the city is experiencing an economic turnaround, it would be foolish not to spend any new revenue on the city's bills, said Councilman Steve Kozachik.

"This is not at all about the city wanting to raise taxes. This is about capitalizing on our successes. We put in place incentives to allow for private-sector growth. Now that we're seeing the fruit of that, increasing our spending limit allows us to use those new dollars for providing services to the public," Kozachik said. "Without a spending limit increase, new tax revenues will sit on the counter until the next fiscal year and we will have effectively gained nothing from our economic development progress."

Plan Tucson

The City Council added a second ballot measure on Tuesday.

Voters will decide the fate of the city's 10-year plan, Plan Tucson.

The Legislature requires that municipalities draft a mission statement every decade. The goals listed in the document don't bind the city or amend any city codes.

The plan drew vehement opposition as it was being developed.

Environmentalists said it didn't go far enough to preserve natural landscapes and resources.

Business interests said an inordinate amount of attention was paid to urban agriculture and other green projects while ignoring economic development.

Neighbors complained of Davis-Monthan Air Force Base noise. And D-M supporters complained enough wasn't done to accommodate them.

But in the end, the city staff managed to cobble together a document appeasing enough of those concerns to get it before voters in November.

On StarNet: Go to azstarnet.com/politics to read more about local and state government and political news.

Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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