Tucson and Pima County must make adjustments to their budgets each year based on how state spending plans shape up, and this year will be no different.
On its face, the system is simple. Much of the revenue people in the Tucson metro area pay to the state is redistributed to the municipalities for the next budget year. But in reality, the state makes changes that reduce the funds, leaving local governments to find other ways to balance their budgets.
One long-running state funding frustration for local governments is in transportation money. For years the state has swept transportation funding, which is supposed to go to local governments, to fund the Department of Public Safety budget.
Various transportation taxes, such as gasoline tax paid at the pump and vehicle registration fees, make up the Highway User Revenue Fund, referred to by its acronym HURF. Each year Pima County asks for that money back, without success.
"Transportation funding in Arizona is really at a crisis level. Transportation revenues haven't been increased in 25 years," Pima County Administrator Chuck Huckelberry said. "We're losing our competitive edge. Our transportation system is what drives economic development and growth, and without funding, we will lose."
Infrastructure plays a role in economic development, and Tucson City Manager Michael Ortega said there isn't an easy way to make up for the lost state funding.
"The reality for us locally is without the HURF monies, without those gas tax dollars, we can't maintain our infrastructure, we can't maintain our pavement," Ortega said.
The state has a financial responsibility to manage its budget, Ortega acknowledged, but so do local governments.
"It makes it very difficult to do business when we don't have the money to pave our roads," he said.
Sweeping the funds from cities, counties and towns to the state budget may have been necessary during the recession, Ortega said, but now that the economy is improving, budget reductions need to be reversed.
"If they are now in better times, then they need to restore those and give us back those dollars that we need desperately for our public safety and for our transportation," Ortega said.
One-third of county property taxes pay for state services, not county services, Huckelberry said.
"The state likes to talk about not having a property tax. Well, they require counties to levy that tax for them and transfer that money back to the state," Huckelberry said.
The impacts stretch to other parts of the budget, from the governor's Border Strike Force, which is a drug interdiction effort in border counties, to potential punitive state revenue decisions based on local policies.
The strike force is meant to stem the epidemic of drug availability and abuse in the state and reduce drug trafficking here.
But people arrested through that program will end up in county jails, adding to public safety costs the counties must shoulder, Huckelberry said.
The governor said in his State of the State speech Jan. 11 that he would seek to penalize local governments that pass higher minimum wage regulations than the state minimum wage. While that's not a policy the city of Tucson is considering, Ducey's suggestion that it should merit less state funding would be an infringement on the city's rights, Ortega said.
Where do all these state proposals leave local governments?
Huckelberry said cities and counties have to take a posture of self defense, which means pushing for tax increases.