Facing Budget Deficit, Ariz. Shifts Costs To Cities

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Like many other states, Arizona is facing a crippling budget deficit. And like other states, it's trying to balance the books by shifting some large costs to county and local governments. And that's not going over so well on the local level.


Arizona is set to approve a state budget that includes more than a billion dollars in cuts. About half will come from reductions in the state's Medicaid program. Other cuts will hit counties and other local governments hard.

In all, Arizona is shifting about $100 million in costs to counties, as Peter O'Dowd reports from member station KJZZ in Phoenix.

PETER O'DOWD: From where he stands, David Tenney can clearly see the state capitol complex, a place he's gotten mighty familiar with lately.

Mr. DAVID TENNEY (Supervisor, Navajo County, Arizona): I've spent more nights in a motel room down here in the last month than I have in my own room at home.

O'DOWD: Tenney is a supervisor in Navajo County, an expansive stretch of land in northern Arizona. It's seen its budget shrink by $8 million, so Tenney is in Phoenix, begging the legislature not to make it any worse.

Mr. TENNEY: What they're proposing is akin to a family cutting their kids' allowance, increasing their chores and then demanding that they make their truck payment for them. No one would do that to their teenagers, yet that's what they're trying to do to counties.

O'DOWD: Here's what's coming for the counties. They'd pay a larger percentage to the state to rehab sexually violent prisoners. In 2012, they'd be forced to house state prisoners in county jail if the inmate is sentenced to less than a year, and they'd lose about $20 million that would normally maintain local roads. Instead, that money would fund the state's Department of Public Safety.

Navajo County Manager James Jayne says these cost shifts from the state have gotten incrementally worse each year.

Mr. JAMES JAYNE (Manager, Navajo County, Arizona): For example, in Navajo County, specifically in the last three fiscal years, you know, we've laid off over 20 employees, 15 percent of our workforce.

O'DOWD: And with this budget, Jayne says more layoffs are likely. This fiscal year, at least 14 states have slashed funding to local government or shifted costs. That's according to the National Conference of State Legislatures.

Now, deep into this lengthy funding crisis, the group's Todd Haggerty says lawmakers have their hands tied.

Mr. TODD HAGGERTY (Research Analyst, National Conference of State Legislatures): This has put any and every option on the table. A lot of the easy decisions were already made.

O'DOWD: That's little consolation to Arizona's 15 counties. They say their own hands are tied because revenue streams from property taxes are capped by law and languishing in this anemic economy.

(Soundbite of music)

O'DOWD: But this week, it felt like business as usual. A mariachi band played at a luncheon outside the state capitol. That's where State Representative Tom Forese, a Republican, defended the cuts.

State Representative TOM FORESE (Republican, Arizona): I'm not happy about what's happening to the counties. I'm not happy about what's happening to K-12. I'm not happy about what's happening to higher education.

O'DOWD: Still, Forese says the reductions are necessary, and he deflects critics who say cost shifting is just another accounting trick.

State Rep. FORESE: I wouldn't call it a gimmick, but it is a shift. Whether it's a husband and wife at their dinner table, whether it's a small or large business or a government, economic principles are all the same. You have to spend less than you make.

O'DOWD: Meanwhile, people like Commander John Russell are preparing for this reality. He's inside the Yavapai County Jail, 90 miles north of Phoenix.

Mr. JOHN RUSSELL (Commander, Detention Services Division, Yavapai County Sheriff's Office): I actually think it's a little unfair. The county just didn't put the state in this position.

O'DOWD: Russell says the proposal to keep state prisoners in the county jail could cost Yavapai more than 2 million bucks and increase prisoner population here by more than 100. He said it could push the jail past capacity.

Mr. RUSSELL: Right now, there's two beds to a cell, and there's the possibility we'll have to go to three. Possible repercussions from the federal government that they don't like to see overcrowding in jails.

O'DOWD: Russell points to a cell door. Two men in orange jumpsuits peer through a window. He says a third inmate would sleep on a plastic cot.

For NPR News, I'm Peter O'Dowd.

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