/ Modified jan 7, 2014 10:55 a.m.

Financial Issues Topping List in 2014 for Tucson, Pima County

Budget deficits, lagging economy, lead local governments to look to job creation.


Tucson and Pima County are focusing on economic development in 2014 hoping such efforts boost local budgets or reduce budget cuts in the next 18 months.

While Tucson is facing a deficit of at least $15 million in the fiscal year that begins in July, Pima County is expecting a flat budget cycle, with no additional revenue and no cuts.

Officials from both governments said fiscal issues dominate the agenda for the calendar year. That includes the final six months of the 2013-14 fiscal year, and the first half of the budget year known as fiscal year 2015.

The city will absorb a number of increased costs next fiscal year, from debt payments that will come due, to operating the streetcar and a new public safety radio system. Tucson is also going to pay more in retirement benefits for police and firefighters and pick up salary costs previously covered by grants, which expire this year.

Late last year, Tucson CFO Kelly Gottschalk outlined a breakdown of the city’s revenue and expense estimates for the calendar year. Financial data isn't firm enough to give a precise number for how much the expenses will exceed expected revenue, but she could estimate that, "It’s going to be another challenging year."

"Last year we had a $15 million budget gap, going into ’15, it’s going to be at least that," she said.

The deficit figure is hard to nail down, Gottschalk said, because all of the revenue from the first half of the fiscal year hasn’t been calculated. Expenses for the second half of the year are still just estimates.

There is a trend, though.

"We are seeing on an annual basis that our revenues are going up, but our expenses are going up faster than our revenues, so we are going to have to face challenges in fiscal '15," Gottschalk said.

In an end-of-the-year message to Tucson employees, City Manager Richard Miranda cited many of the upcoming expenses Gottschalk listed. The city council must continue to prioritize programs that ensure health and safety, and focus on economic development to help raise revenues, he said. Members of the city council have echoed that plan.

Pima County
The county is also looking at economic development options to raise revenue, and it is one of the top priorities, said County Administrator Chuck Huckelberry.

He would like to work on attracting new jobs, primarily in the technology industry.

"Hopefully that means new aerospace manufacturing or high-tech firm locations in pima county so that we can continue to grow our job base and hence economic development,” he said.

Huckelberry said hat will hinge on five goals: creating job centers, training residents to fill the new jobs attracted to the area, using UA research and development to drive new local businesses, promoting tourism, and improving transportation.

Improving and enhancing specific transportation centers, such as Tucson International Airport and the rail Port of Tucson will help encourage companies to start or relocate in Pima County, Huckelberry said.

“We’ve often looked at trying to promote a new interstate highway connection between I-19 and I-10. That’ll be on the top of the list," he said.

At the airport, Huckelberry said he wants to help add a second runway to expand the number of flights available. These efforts, he said, will create a transportation logistics hub.

Another of Huckelberry's proposals would have farther-reaching impacts: lobby the legislature to increase gasoline taxes to pay for road repair. That could help make up for years of state cuts to local transportation funding, he said.

“Much of the highway system, (which is) maintained by city and towns as well as the county, is in very poor condition," he said. "That money needs to be reinvested and we need to push the (state) Legislature to either raise the gas tax, and that would be a minimum of 10-cents a gallon, or to refer a gas tax increase to the voters.”

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