It’s budget season for Arizona cities and towns, and local leaders are scrambling to determine the impact the coronavirus will have on their spending plans in the next fiscal year.
One common problem they all face is a significant drop in state-shared revenues, according to Tom Belshe, executive director of the League of Arizona Cities and Towns
Those dollars, which are distributed by the state to incorporated cities and towns, make up a large share of local budgets. Cities get a portion of Arizona income taxes, sales taxes, gas taxes and the vehicle license tax you pay when registering your car with the state.
“The one that concerns cities and towns the most is not only the state share sales tax, but also local sales tax that is collected,” Belshe said. “And that's the revenue that we believe will be impacted the most.”
Cities everywhere are facing cuts — it’s just a matter of how deep they’ll be. Sales tax data from March, when Arizonans began to stay at home, won’t be available until May, meaning it’s impossible to measure the impact so far.
Belshe said the biggest concern for local leaders will be maintaining vital services like public safety.
“It’s one of the most important, if not the most important function that we have,” he said. “But when public safety comprises more than half of your budget, it's very difficult to make cuts of the significance that we're going to have with the kind of losses that we're anticipating without cutting public safety.”
Roughly 50% to 70% of city budgets are spent on public safety, Belshe said.
