Nathon Smith, right, checks people in as they line up in their cars for COVID-19 vaccinations at Kino Sports Complex, run by Pima County. This year, the county has $350 million in federal grants built into the budget for COVID-19-related expenses.

 Mamta Popat, Arizona Daily Star

The largest budget in Pima County history β€” $2.1 billion β€” is on the table for next fiscal year, prioritizing raising the minimum wage, lowering property taxes and financing the continued public health response to the COVID-19 pandemic.

Although the proposal is nearly 50% more than this year’s adopted budget, Pima County Administrator Chuck Huckelberry said most of the increase is covered by federal grants for COVID-19 relief and not taxpayer dollars.

When the county began the budgeting process last year, uncertainty about the pandemic’s financial impacts caused an onslaught of budgetary reductions. This year, the county has $350 million in federal grants built into the budget for COVID-19-related expenses.

The other expense significantly escalating costs is a $300 million one-time expense to pay down the retirement funds of public safety workers and corrections officers.

The county owes more than $340 million in retirement costs to these workers. According to Huckelberry, the liability accrued due to past pension spiking practices where workers would hold onto unused sick pay and vacation time to boost their salaries at the end of their careers, resulting in an artificially high pension. The practice has since been reigned in by the state legislature.

β€œThe pension liability for our law enforcement has been the fastest growing of any pension plan the county has,” Huckelberry said. β€œWe’re paying for the mistakes of the past now, and the way to minimize that payment is to finance that unfunded liability.”

$15 minimum wage

Huckelberry is also asking the board for $4.3 million annually to raise county employees’ minimum wage to $15 an hour, impacting the pay of nearly 2,000 workers once compression adjustments are made.

The goal is to address the county’s ongoing issues with hiring and retaining qualified employees.

Huckelberry says about 1,800 county employees make below $15 an hour. If adopted by the board, the raises would be factored into paychecks the first pay period after July 1.

Property tax rates

Next year’s combined property tax rates will decrease by about 12 cents per $100 of assessed value, but Huckelberry says most property owners won’t see much of a change in their bills.

The suggested combined county property tax rate for the next fiscal year is $5.1952 per $100 of assessed value, but the value of property that’s used to calculate total property taxes owed increased by about 6% over the past year. This is one of the highest increases in county property values over the past 10 years, Huckelberry said.

The amount one owes in property taxes all depends on the property’s value, however. Metro real estate is booming, and about 1% of the 6% increase was due to new construction.

β€œSome properties may not have gone up in value. Others may have, and particularly if they’re located in areas where the real estate market is appreciating rapidly,” Huckelberry said. β€œBut on average, they’ll stay about the same.”

The proposed primary tax rate is $3.8764 per $100 of assessed value. While the secondary property taxes for regional flood control and the library district are recommended to remain the same, Huckelberry suggests the debt service secondary tax be reduced by 7 cents.

He says the tax decrease is a β€œplanned contraction” with the county’s pay-as-you-go policy adopted in 2019. Capital projects are now financed from general fund sources on an as-needed basis instead of relying on debt financing.

The idea is to take a percentage of growth in the county’s tax base and use a portion of unneeded taxes to pay off bonds, reducing the property tax rate over time.

Overall, Huckelberry estimates property taxes will generate more than $500 million for the county in fiscal year 2022 β€” a nearly $18 million increase from this year. This tax levy is estimated to fund 22% of county expenditures.

Budget proposals

Other items on the fiscal year 2022 proposed budget include:

$10 million to provide high-quality early child education programs for low-income families. The board approved this funding May 4.

$84 million for 100 miles worth of road repair projects, many within unincorporated Pima County.

$52.9 million in road improvement projects, including the widening of South Houghton Road and a northern section of Kolb Road.

$1.1 million to purchase body-worn cameras for deputies in the sheriff’s department.

The library’s total operating budget of $49 million includes capital projects such as the new Sahuarita Library, expanding the Martha Cooper and Richard Elias–Mission libraries and making exterior and interior improvements.

β€œThe budget that’s presented is balanced. It doesn’t require any significant increases in tax revenues, and it relies on implementing a lot of programs that will be post pandemic, that are federally funded,” Huckelberry said. β€œWe do believe that we’re making dramatic progress to come out of the pandemic.”

The Board of Supervisors will tentatively adopt and set a ceiling for the budget on May 18. Final budget adoption is set for June 22.

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