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What the Devil won't tell you

Another 'presto, change-o' state tax on local government explained

This is a column about the politics of who pays, who doesn't and who looks good doing it.

And those politics are simple: Voters like to reward those in government who keep costs down, charge less for essential services and operate with surpluses. On the other hand, voters scowl at politicians who seem to light money on fire, can’t seem to keep their budgets in order and raise taxes to make government go. Voters also don’t like politicians cutting programs that they use or need.

When the state of Arizona runs into budget troubles, it does what bosses do everywhere and start rolling things downhill. Don’t kid yourselves, these are tax increases magically imposed by the state with fast, tricky hands.

Counties are technically subdivisions of the state and therefore look up a steep slope at what the state sends their way. 

What they see during budget crunches is more costs shunted down to them.

That number adds up.

Pima County Administrator Chuck Huckelberry just put out his 2019/2020 recommended budget and it lays out what is a stealth time bomb: an $86 million tax hike on county residents that the state dropped on us without so much as a smirk.

Huckelberry calls it a “sleight of hand” to make the state look thrifty and the counties look spendthrift, and he's right.

“They’ve been doing it for years but it greatly accelerated during the Great Recession,” Huckelberry said. “They are starting to correct it but they haven’t fully restored it.”

These cost shifts are either going to squeeze out existing county spending, most of which is in the criminal justice system, or force taxes higher. There is no magic pool of "waste, fraud and abuse" equal to 15 percent of the county's $556 million general fund. That's amputation.

When pigs fly south

So where is that money?

It’s in $43 million for long-term care for the elderly living in poverty and other disabled Arizonans and $16 million in increased costs for providing the Arizona Health Care Costs Containment System.

It’s a $19 million requirement that the county pick up the tab for Superior and Juvenile court staff salaries and benefits.

And it’s in the nickel and dime stuff like $780,000 in state charges to run the Arizona Department of Revenue.

What’s that look like compared to other county programs?

This budget year, the county will spend $44 million on transportation, $21 million on parks and natural resources, $11 million on community development and $9 million on the Justice Court office in Tucson. Put it all together and it's $84 million, which is (for the math impaired) $2 million less than cost transfers.

We could double each without the state's offloading of its responsibilities or cut property taxes by 25 percent if the county were only doing its job. 

Hey, here’s one. The county could invest $86 million in job training to give the local workforce more skills and then the Tucson area could really start competing for high-paying jobs (if you are into that sort of thing, which I am not).

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Rational rationale (to a point)

The state does come up with reasons to justify this kind of stuff.

The county’s share of AHCCCS is an original sin. The counties used to run indigent health care before the state Medicaid system took over in the 1980s. So the state charged counties for the price of AHCCCS from its inception. Then it kept raising the bill.

The Department of Revenue money kinda sort makes sense because state collects and disburses sales tax revenues. So by golly, the counties should pay for that dispersal. To be completely fair, that’s straight up “cost allocation” that governments use internally all the time to tap the restricted funds. That sentence is a mouthful but it means that, for instance, a city manager can charge the water department for the time the manager spends on those issues. So a water bill can be used to pay part of that salary.

It's a reach. The Arizona Supreme Court doesn't charge counties for hearing cases and the Legislature doesn't write up bills for writing up bills.

County courts are part of the state’s court system and they’ve always shared the costs. The state just started raising the price.

Yeah, they put the load right on us during hard times — and it's not a case of "hold this while I fix that over there." No, this is straight up "you touched it last" policy-making.

They hardly ever re-assume the load that was theirs unless they have to do it. 

Under Gov. Janet Napolitano, the state flat-out stole (with an IOU sticky-taped to the windshield) the county’s share of highway money. The only way they could do that legally is to borrow the money and agree to pay it back. She gambled that the Great Recession would be a quick blip and the state could just take out that fast short-term loan. Yeah, not so much. What did she care? She was suddenly a cabinet secretary in Washington.

But that money did get paid back.  

Absolute discretion

The county right now is suing the state over a violation of legal process because the state unloaded education funding on it that — very long story short — directly involved raising taxes without a mandatory a 2/3 vote in the Legislature.

These latest cost shifts are more like policy shifts, Huckelberry said.

That’s where the state gets legal cover for what should be an outlaw action. Under state law, tax increases require that super-majority vote by lawmakers. But foisting costs onto the counties can be done with a simple majority. And since we're talking about spending policy, the courts have ruled that the Legislature has absolute discretion.

Mandates of yore

The Legislature and governor didn’t save taxpayers a dime in shifting these costs. They just saved themselves a headache. They get to look like they are running government like a business — with a big old profit at the end of the year — and then bitch that counties are spending too much without the guts to make tough decisions.

We’re talking about the same kind of “unfunded mandate” that conservatives once railed against in the Contract With America days. The feds would pass a law like the Americans With Disabilities Act and the Clean Air Act, then tell state and local governments they have to figure out way to pay for it.

Imagine if a president signed into law a provision that guaranteed free college and then just told the states to pick up the tab.  

At the end of the day, voters who pay taxes don’t make weedy connections about who is the subdivision of whom, if counties are creatures of the state, and whether the states, in fact, created the federal government. They just look cross-eyed at the politicians charging them more or cutting services. 

The governor and Legislature prefer those targets of voter wrath to be county boards of supervisors.

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The Bernie dance

By the way, I can't think of a better way to stir up support in Cochise County for single-payer health care than to concentrate the costs of health care and elder care on the backs of local communities.

Programs like ALTCS and AHCCCS are supposed to be state programs. They spread costs and risks statewide to pay for indigent health care. The old model of county hospitals doing the heavy lift clearly didn't work. But the more the costs for these programs are born locally, the more we are returning to that model.

In a time when an aging population doesn't have enough retirement savings and pensions are a thing of the past, the more pressure counties will face to provide health care services with increasing costs at the local level. That will make them concentrated. As bad as this is for Pima County, those rural counties will be more afflicted.

Well, Bernie Sanders hears that and he's humming "Fanfare for the Common Man," dancing down Main Street, Arizona.

These services will still be provided because that has become our expectation. They will just be provided poorly in certain places until folks start thinking "anything is better than this."  

Blake Morlock is an award-winning columnist who worked in daily journalism for nearly 20 years and is a former communications director for the Pima County Democratic Party. Now he’s telling you things the Devil won’t.

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State cost transfers to the county are a hidden tax that can undermine programs like AHCCCS and long-term care by concentrating the costs on local government.


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