AZ CITIES, TOWNS HOPING FOR MINIMAL STATE BUDGET IMPACT

posted by Michael Chihak

Arizona Week will explore how the state's cities and towns are doing in the current economic downturn. Municipalities in the state have seen their budgets cut by an average of 30 percent in the last two years, the head of their state association says.

But the good news is that they think this year's state budgeting process won't add in a great way to cities' and towns' woes.

"At this point, given the comments that state legislative leaders have made saying they will use the governor's budget as their starting point, we think we should be OK," Ken Strobeck said. He is executive director of the League of Arizona Cities and Towns, which represents and lobbies on behalf of 91 municipalities.

Strobeck pointed out that fiscally healthy cities and towns are key drivers in the state's economic recovery. "The way the state budget is going to come back in any meaningful way will have to involve activity at the local economic level," he said.

Eighty-five percent of Arizona's population lives in incorporated cities and towns, and 90 percent of state revenues come from economic activities in cities and towns, he said.

Strobeck said Gov. Jan Brewer's budget proposal includes two ideas that could cost cities and towns a total of about $20 million in the 2011-12 fiscal year. One is in fees for the state Department of Water Resources and the other a switch of transportation money.

"We felt like $20 million was a small amount to us as a contribution to the state's budget problems if other parts of our state-shared revenue is left intact," Strobeck said.

The cities and towns are getting about $800 million this fiscal year in shared revenues from the state, a little more than half from distribution of state income tax revenues and the rest a combination of sales tax revenues and vehicle license fees.