Arizona cities are tightening their belts and revising previously rosy budget forecasts as the coronavirus outbreak’s financial impact takes hold in metropolitan areas and mostly rural counties alike.
Steps already being implemented or under consideration include freezing hiring, putting projects on hold and foregoing planned equipment purchases. Cities laying off or furloughing workers include at last two Phoenix suburbs and Page in northern Arizona.
State budget analysts project significant drops in tax revenue, including sales tax collections that are a major source of funding for cities. Meanwhile, fuel taxes that help pay for transportation projects also will be reduced as Arizonans drive fewer miles.
“We don’t know how much yet, but we are going to see a reduction of state-shared revenues,” Colleen Haines, Kingman public affairs coordinator, told the Kingman Miner. “We are going to see a reduction in our budget. Those are the facts.”
Kingman is delaying the planned purchase of a new $1 million fire truck and putting off building remodeling projects..
Phoenix now faces a projected $26 million shortfall instead of a $28 million surplus. “And that’s after accounting for spending reductions and a hiring freeze instituted on March 19,” City Manager Ed Zuercher said.
Additional options being considered include selling surplus land, not replacing aging vehicles and trimming payments to the pension fund for city workers, azfamily.com reported.
“I believe we have even more difficult decisions in front of us,” Mayor Kate Gallego said during Monday’s City Council meeting.
Zuercher has asked each department to list cuts adding up to 25% in case they’re needed, Gallego noted. “We are trying to tighten our belts along with everyone.”
Prescott officials also are redrawing their revenue forecasts and spending plans, The Daily Courier reported.
“We are definitely in the middle of a recession now, with these jobless rates,” said city Budget and Finance Director Mark Woodfill.
Prescott has already frozen many expenditures and vacancies while halting employee travel for both cost and health reasons.
Woodfill plans to present the City Council with a revised budget proposal with “a lot of contingencies,” and he suggested leaving open the possibility of a property tax increase.
Publishing a notice of intent wouldn’t require the council to take the step, he said, but it would leave the option open until June when a final decision would have to be made and more is known about the economy.
The economy has already cost hundreds of municipal workers their jobs, at least temporarily, as Mesa and Tempe close facilities and shut down programs, the Arizona Republic reported.
Tempe on Monday furloughed 495 temporary employees, most of whom work for departments that operate the library, arts and culture facilities, community centers, recreation programs and volunteer services.
“This was a heartbreaking decision because our part-time, temporary employees are the face of Tempe for many people in our community,” City Manager Andrew Ching said.
Tempe anticipates having to make other budget cuts as restaurants scale back operations and other businesses close temporarily, reducing sales tax revenue.
Mesa is laying off 23 full-time workers and 455 part-time employees and not filling 35 vacant positions as it shutters libraries, parks and recreation facilities and arts center.
City Manager Chris Brady recommended that Mesa keep the facilities closed until October for both cost and health reasons, but some City Council members said they’d like to open the doors again earlier if possible.
“The impact will kill the downtown area to go much beyond the summer,” Councilwoman Jen Duff said of the closures,, the Republic reported.
Page laid off 25 of the city’s 175 employees as officials said they expect revenues to drop 33% due to lost sales tax, the Arizona Daily Sun reported.
The layoffs were focused on several parts of city government, including the public works department, summer recreation programs, the library and the parking operation at Horseshoe Bend, a sightseeing area along the Colorado River.
Page’s revenue depends heavily on people visiting Horseshoe Bend, Lake Powell or national parks in the region, but City Manager Darren Coldwell said few such visitors are expected during the pandemic.
At most, Coldwell said, Page may still see people visiting from within about a 500-mile (805-kilometer) radius, such as families who might be looking to get away for just a few days.
Tucson has frozen hiring for most departments, but City Manager Michael Ortega said furloughs and layoffs would be “the last option,” the Arizona Daily Star reported.
“We’re going to do everything we can to keep us from having those discussions,” Ortega told the City Council.
Preliminary projections show Tucson’s revenue decrease could last through August and plateau through the end of the calendar year before incremental increases restart in 2021, Ortega said.
“But keep in mind we would still be below where we started,” Ortega said of the city’s overall budget.
Republished with the permission of the Associated Press.
