County lawmakers face massive budget shortfall - East Valley Tribune: News

County lawmakers face massive budget shortfall

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Posted: Thursday, November 6, 2008 7:39 pm | Updated: 10:29 pm, Fri Oct 7, 2011.

Maricopa County's top officials had little time to celebrate their re-election this week.

New financial data - detailing the county's severe economic hangover - required the Board of Supervisors to address the first problem plaguing their next term: a massive budget shortfall.

For this fiscal year, which began July 1, the county government must slash at least $58 million in spending just to stay on budget during the next seven months.

Dwindling tax dollars will likely force even larger cuts next fiscal year, said Christopher Bradley, the county's deputy budget director.

"It's pretty clear that there's no quick fix," said Elliott Pollack, a Phoenix economist and outside fiscal analyst for the county government.

On Tuesday, all five supervisors won new terms by comfortable margins, or without any opposition.

On Thursday, the incumbents heard overwhelmingly bleak economic forecasts, from both Pollack and their own finance officials, regarding what to expect during their next four years in office.

"We're doing worse than Cleveland," Pollack said. "What else can I tell you?"

Supervisors Don Stapley and Fulton Brock, whose districts fall within the East Valley, did not return calls for comment.

David Smith, the county manager, has said plummeting tax revenue would cause county agencies to reduce the quality of many services, rather than eliminate any of them.

The county waited until after the election to begin officially addressing its financial woes.

Bradley said the Office of Management and Budget will present proposed budget cuts to the supervisors in two weeks.

In June, the county cut $115 million from its $2 billion budget.

Pollack said the economic problems are many and varied, like those facing the whole nation. However, the county's economic outlook is particularly troubling because the region is hugely dependent on industries tied to population growth, home construction and real estate.

The estimated population growth rate for this year is half that of 2006, data from the state Department of Commerce show. That shift, along with excess building by homebuilders, has left 45,000 houses on the market, a four-year supply.

Further, the Wall Street crisis has caused financial firms to severely limit credit and lending.

"The result is the average guy is going to be really squeezed," Pollack said. That typical consumer is far less likely to make big purchases, like a house or car, which generates significant tax revenue for the county.

"Eventually he'll cut back on other things as well," Pollack said. "His wife will have to live with last year's clothes; he'll wear his shoes a little longer."

All of which reduces local governments' cash flow.

One of Pollack's slides proclaimed, "The worse is still in front of us."

Bradley agreed, adding that the state government's financial problems could worsen the county's shortfall.

"We're expecting more bad news," he said.

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