3 things to know about the new city budget

Members of the Budget and Finance Council Subcommittee got a sneak peek Wednesday afternoon of the city’s hefty 2024 operating budget.

And unlike the state’s jaw dropping deficit that threatened to ax the Riggs Road overpass, Maricopa is doing a pretty good job at keeping a balanced budget.

Subcommittee members overall seemed satisfied.

“I think it’s a continued fiscally responsible direction ahead for our city,” said Mayor Nancy Smith after looking through the budget. “Show me another city that has the same positive financial status as the city of Maricopa. It’s pretty impressive that we continue to do that.”

“I think we set our priorities really well,” said Councilmember Eric Goettl. “I’m excited for (residents) to see the percentage of the budget that goes to public safety and how much goes to infrastructure and the improvement of our streets.”

The city manager’s office will present a final version of the budget during the May 7 city council meeting, but here are a few highlights.

City revenue slowed by flat tax

Chief Financial Officer Matt Kozlowski said the city has continued to see a growth in revenue over expenditures over the past three years.

While the amount is projected to reach $24 million this next fiscal year, Kozlowski said it could have been better.

“These percentages would be more attractive if it were not for the changes made by the state,” he said. “The introduction of flat tax has significantly impacted in a negative aspect the urban revenue shares and the state shared revenues.”

The state shares revenue generated from various coffers, such as income tax or vehicle license tax, with counties and incorporated cities and towns. However, since Republic Gov. Doug Ducey passed the state’s flat 2.5% income tax rate in 2021, that amount received decreased.

According to Kozlowski, the revenue share for Maricopa alone “dropped by $3.4 million.”

Six years of property tax drops

Earlier this month, City Manager Ben Bitter announced the city planned to lower property tax rates for a sixth year in a row. Turns out that’s true.

Homeowners will see property tax rates drop from 3.87% to 3.64%, thanks in part to revenue generated from new construction.

“Quite literally every dollar of assessed property tax growth is going back to our residents and the only increase to our property tax revenues is new construction,” Kozlowski said.

He also noted those good times of seeing property tax rates continue to drop won’t last forever and eventually they “will become a harder conversation to have.”

Modest personnel increases

Additionally, Kozlowski said the city will increase employee expenditures by $4 million, which includes raises and new hires, especially in public safety. This year, the city anticipates spending $51 million on employees, compared to $47 million the previous year.

Additionally, the city will increase salaries by 4% based on an inflation analysis and a comparison to how much other cities plan to increase salaries.

While 54 city employees make $100,000 or more, the average annual pay among other salaried employees hovered at $76,000. That amount was about $4,000 less than the city’s median household income, which was about $80,000 in 2022.