P.L.A.N. Update - Shared Revenue and Libraries‏

Fair Allocation of Library Taxes?

Did you know that Phoenix property owners pay taxes to the county library district, but the vast majority of those dollars support libraries in other communities? In 1986, the Legislature passed a law allowing creation of library districts with the power to levy property taxes to pay for libraries and library service. One year later, the Maricopa County Board of Supervisors formed the Maricopa County Library District (MCLD). In the 1980s Maricopa County was mostly unincorporated but has evolved to be very urbanized. Many cities and towns in Maricopa County provide their own libraries and library services, but state law provides that taxes collected by library districts cannot be passed to cities and towns. The result is that city residents in Maricopa County pay the library tax but city libraries cannot directly use any of those revenues.

In 2008, Phoenix residents paid $6.7 million in property taxes into the MCLD. That same year, Phoenix received about $600,000 (less than 10% of contributions) in services or revenues from the MCLD: $435,189 in reciprocal borrowing revenue and $165,000 in online database support.

Phoenix residents’ contributions are approximately 32% of total revenues collected in Maricopa County through library district taxes. In the past 12 years, Phoenix residents have contributed more than $50 million to the MCLD.

Currently, the Phoenix Public Library and its branches serve a residential population of more than 1.5 million. The service population of unincorporated Maricopa County is less than 250,000.

Last year, Phoenix cut its library hours by 30%. This year, Phoenix is proposing to close up to six libraries in addition to other library service cuts.

SB 1373 county library districts; cities; taxes will allow a city or town to receive at least 75% of the library taxes its residents pay to a library district in Maricopa or Pima County for the city or town to use for its libraries. The library district would keep 25% of the library tax collected in cities and towns to use for district purposes. The bill would restore fairness and allow Phoenix libraries to stay open.

Right now the bill is languishing -- call your Senator today and ask that this bill get a hearing.

Shared Revenue Alert

It's been quiet so far as we watch for potential raids on city revenues, but now comes SB 1108: Technical Correction; Children (Sen. Russell Pearce, R – Mesa) which is scheduled to carry a “strike everything” amendment this Tuesday entitled "State Shared Revenues." The amendment isn't yet available on the Legislature's website, but the title is ominous. This bill will be heard in the Senate Appropriations Committee. We encourage you to remind your state legislators of the importance of shared revenues to cities and towns to be able to provide police and fire protection and other important services.

Increased Penalties for Graffiti Crimes

HB 2738: Criminal Damage; Classification (Rep. Anna Tovar, D – Tolleson), increases penalties for those convicted of graffiti crimes. The lower limit was $250, but this bill makes reckless damage of property in the amount of $1 to $999 a Class 1 misdemeanor. HB 2738 unanimously passed the House Judiciary Committee this week and must be approved by the Rules Committee before Third Read approval before the House. The City of Phoenix thanks Representative Tovar for sponsoring this important measure.

Source: P.L.A.N.

P.L.A.N. Update - Special Session #6 - It's All About the Budget‏

Legislature Completes Work on Sixth Special Session for State Budget Fix

Governor Brewer called her sixth special session to continue chipping away at the current fiscal year’s budget deficit, pegged at $1.5 billion. The Governor’s call included:

• Adjustments to state agency budgets, including sale/leaseback of additional state buildings;
• referring to voters a three-year, one-percent increase in the state’s sales tax;
• prorating income tax deductions for out-of-state filers; and
• bonding against lottery revenues.

Revenue sharing was not discussed as a revenue option. While the Senate was able to quickly move the budget bills, the House took more time. The bills that refer a three-year one-cent sales tax, extend and securitize the lottery, and collect more taxes from out-of-state filers were approved. On Wednesday, things took an interesting turn. The sole outstanding measure, a $450 million rollover payment for K–12 and public universities, was linked with passage of the Speaker’s jobs bill, HB 2250: Arizona’s Job Recovery Act. The Senate apparently did not agree with this maneuver, so adjourned the special session sine die. The House followed suit on Thursday. The $450 million rollover education payment can still be considered in the current regular session or a future special session. The current year budget is still short almost $700 million, so more work remains.

Phoenix City Council Adopts A Two-Percent Emergency Food Tax

The Phoenix City Council took special action on Tuesday, Feb. 3, to adopt a two-percent tax on purchases of food for home consumption. City management estimates that the food tax revenue will provide $62.5 million over the next 15 months to help reduce the revenue shortfall facing the city. Today, every city bordering Phoenix collects a food tax; Phoenix's two-percent tax rate ranks 5th lowest among the 18 cities in Maricopa County that already collect a food tax. The city began this year's work on the budget with a $245 million budget shortfall. With the food tax, several efficiency measures and one-time financial transactions, this shortfall has been reduced to a more manageable $60 million. The Council's action reduces the number of cuts needed to balance the city's budget.

Last week the Trial Budget was presented to the City Council and released to the public. In our last message, we included links for the budget and for the schedule of community budget hearings where you can make your voice heard.

Legislation of Interest

HB 2250: Arizona’s Job Recovery Act (Rep. Kirk Adams, R–Mesa) makes numerous changes to state income tax, property tax assessment ratios, and the enterprise zone program, as well as dedicating new resources to job training and economic development. While the intent of the bill is to spur job creation, elements of the bill will reduce Phoenix revenues when they are fully phased in:

$12-$18 million loss in revenue sharing
$6 million impact in primary property tax collections (affecting the city's general fund)
$20 million hit in secondary property tax collections each year for five years (affecting bond payments), and
$220 million reduction in future bond capacity

As the City works to address this year's budget challenges, it's more important than ever to protect future revenue. HB 2250 will reduce future revenue and make it harder to recover from this downturn in the years to come. We look forward to working with the supporters of this measure to find middle ground that will stimulate the state’s economy without unduly placing public safety, streets, parks and library services in jeopardy.

Source: P.L.A.N.