Budgeting for reality

For five months I’ve had the pleasure of serving as a member of your city council, and I promised voters that I’d tell them what they needed to hear, not what they wanted to hear. Recently, I’ve made it known that I’m committed to achieving a balanced budget for Maricopa. Over the last several months, I’ve had an opportunity to see where Maricopa is spending its money wisely, and where it can use some improvement.

The 2009/2010 fiscal year, which ran from July 1, 2009 to June 30, 2010, realized a budget deficit of $2.1 million, and the current fiscal year began with a projected deficit of $2.6 million. Considering the current shortfall in income from projected housing permits, sales tax and property taxes, that number could increase significantly unless reductions in spending are made now to offset the shortage. The city has a respectable “rainy day” fund, but finds itself in the middle of a “rainy week” and may not have the funds to sustain long-term deficit budgets.

I’ve been told Maricopa’s in a great position with its current reserves and could operate for some time with reduced revenue. However, my response to that thought process is: Have we not learned anything? Or, will history continue to repeat itself?

In 2007, the State of Arizona had $700 million in its “rainy day” fund. Due to a lack of responsible spending and cutbacks, it now finds itself with a deficit of more than a billion dollars, selling off the capitol buildings to raise money! Could the financial crisis have been prevented, or at least proactively minimized? Yes, and now we’re all paying an increased sales tax to help make up the difference.

It will be my position that the next fiscal year budget be based on zero housing permits. This year’s numbers were based on 30 permits per month, but we have averaged less than 10. Let’s get ahead of the curve and project zero until we see signs of improvement. Many differing approaches can be taken to prioritize funds as necessary in the budget, but that will be a discussion of the full council.

I had no voice in the adoption of our current budget, but I’ll have a voice in the budget process for the next four years. To many of us, balancing a budget means sitting down at the kitchen table and trying to decide what cuts need to be made to have the money going out equal to the money coming in. Even though my wife and I have cash in savings, it doesn’t mean we continue to spend at current levels when times get tough. Instead, we cut spending to balance against reduced income. Yes, “wants” will have to be placed on hold, so we can focus on the “needs.” Should the taxpayer expect anything less of their local government?

I feel a strong obligation for Maricopa to lead by example when it comes to setting fiscal policy. Unlike the federal government, the city can’t print more money when it’s in a crisis. Government is the steward of your money and should be responsible in how it’s spent. At a time when hardworking and talented taxpayers are losing their jobs and homes, some perceptions are that government is still doing a very good job taking care of government – even at the local level.

I can’t stress enough the importance of economic development for Maricopa. Every time local residents shop outside Maricopa, the city loses revenue. Emphasis needs to be placed on “fill-in” of existing empty commercial lots. We need to invest in and expand upon the city’s Economic Development Department, make calculated land purchases for shovel-ready sites, and offer cost-effective “return on investment” incentives to prospective business looking for a new home.

On a positive note, the city may see a glimmer of relief in the form of state shared revenues. I use the word “may” because it is possible that the state will reduce those funds this coming year due to its own fiscal problems. Currently, Maricopa’s shared revenues are based on a population of approximately 15,000 residents. The number of residents has increased, perhaps to 35,000 or 40,000, but we will not see those numbers realized until the 2010 census results are released. The projected difference in shared revenues could mean much needed help in helping to close the city’s budget gap.

I look forward to working with other members of the city council to find answers to these difficult
questions, always remembering that I’m one of seven committed to serving you and your interests. Prosperous times are ahead for Maricopa, but things in the short term may get harder before they get easier. At this time, striving to achieve a balanced budget for Maricopa is imperative in protecting our long-term interests, and uncomfortable and unpopular decisions will need to be made.

Alan Marchione is a member of the Maricopa City council.

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