Politics
Why Tucson’s elected officials put business on the back burner
WAKE UP TUCSON: Time to restore balance
By Joe Higgins, Inside Tucson Business, or Chris DeSimone, Inside Tucson Business
Published on Saturday, February 13, 2010
We have many callers to our “Wake Up Tucson” radio show who ask the same question: Why are business owners treated like second-class citizens in Tucson and Pima County? One big reason is that the environmental lobby and the neighborhood associations have done an end-run around the business community.
It’s time for the business community to meet the competition for your local elected officals’ interest. They are kicking your butt.
Environmental lobby
The environmental lobby is extremely successful in our region. There are dozens of groups loosely assembled but they come together like a laser light focus to achieve their goal. Their mission is to stop humans from encroaching on habitat and slow or stop growth from coming to the Sonoran Desert.
Their techniques are multi-pronged and in most cases, very effective. Some of the tools of their trade include:
• The Endangered Species Act, which uses the federal court system to block growth.
• The Sonoran Desert Conservation Plan, adopted in the late 1990s that laid the path for future growth, land use planning and wildlife corridors.
• Political influence exerted on county elected officials and bureaucrats. Taxpayers have spent over $200 million buying ranches around the county. Uber-environmentalists sit on the Pima County Bond Committee, for gosh sake. With only 16 percent of the land in Pima County in private hands and 10 percent already built, the idea of affordable housing that matches our region’s wages will soon be gone.
• Federal rules regarding dust control, navigable water ways, 404 bridge crossing permits, and U.S. Army Corps of Engineer studies.
• The joint water–wastewater study, which has been in planning for 20 months, is the latest battleground. The blue ribbon panel (Blue Ribbon Panels: Where good ideas go to die…) is looking to merge Tucson Water and Pima County Wastewater Management. In the Phase II report, we see lots of talk about sustainability and stopping growth but little discussion on diversifying our industries. The county has been using its wastewater authority to control growth for years. Give those bureaucrats Tucson Water and things will look even worse.
NIMBY associations
If the goal of the environmental lobby is to stop sprawl and preserve the desert, then city folk need to allow for denser populations, vertical growth, tear down and rebuilds, and infill of vacant lots. When a business man or woman tries to venture into the Tucson city limits to open, develop or grow a business, they run into an entirely new set of problems:
• A land use code that has such restrictive parking, set backs, landscape requirements and now rainwater harvesting, that less and less of their property is actually usable.
• A system that allows one or two rogue neighbors to wield tremendous political influence. A small minority faction can delay your business opening until you’re out of money or completely discouraged to the point that you wonder why you chose Tucson in the first place.
• City council members and offices that realize taking care of neighborhoods above all else has been the path to getting re-elected. When elected officials’ actions are constantly in deference to what these vocal minorities want, the message to city staff is pretty clear: Take care of the neighbors and put the business owner on the back burner.
The business community is trapped between enviros in the county and neighborhood associations in the city. What are we to do as a group? As we’ve said before, the electeds need to fear us at election time — 97 percent of all electeds want one thing in life: to be re-elected. They know the dysfunctional business community does little to help them or their opponents get elected. They will continue to govern in favor of the groups that they perceive will get them votes.
Environmental groups and NIMBY neighborhood associations are united and passionate about their issues. Who speaks on behalf of the Tucson business community with passion and on a consistent basis?
Each month, we ask that question during our many presentations to business groups. We haven’t received an answer yet.
Contact Joe Higgins at joe@joehigginsinc.com or Chris DeSimone at provenpartners@comcast.net. They’re the hosts of “Wake Up Tucson,” which airs 6-8 a.m. weekdays on The Voice KVOI 1030-AM. Check out their blog at www.TucsonChoices.com.
Copyright © 2010 Inside Tucson Business
Utah is hovering at just over 4% unemployment. It seems the economic crisis skipped over their state and landed in Nevada, Arizona and California. How did they do it? Here’s a hint; it took leadership and years of planning. Utah leaders embarked on a multi year project, Envision Utah. The Southern Arizona Leadership Council brought in organizers of the Envision Utah program about a year ago. A crowd of about 500 heard how Utah navigated through the wide variety of interests to come out with a comprehensive plan that would set their state on the path to prosperity for the next generations.
A project mirrored after “The Envision Utah” is well underway here in Tucson. The local effort, coined “Imagine Greater Tucson”, is lead by local land use attorney Keri Silvyan. I was in the audience and impressed with the concepts and the plan Utah embarked on. What Utah did, and what Silvyn is mirroring locally, is Utah leaders called together a large number of stake holders from varied backgrounds to build relationships and discuss their common future. T
The Envision Utah process put business, politicos and community activists together, discussed each groups particular needs and then used computer models to show what would happen over 20 years if certain paths were taken by the community. For example, if the community wants more open space then the land values would increase, dense population and infill would have to occur and mass public transportation would be required. If the community wanted more growth related industries (housing and sprawl) then the cost of supporting the infrastructure and finding water would have a cost to the entire community.
What’s important is that if Arizona as a state or Pima County as a region starts moving towards a Utah model, their must be voices from all sides being heard and respected. In southern Arizona the environmental voice is organized and focused and the business voice is unorganized and somewhat scattered.
What Happens If That Happens?
Environmentalists ability to influence our community is well documented. We are right in the middle of one of the largest movements in our history to combine water and waste water delivery. In the desert, the people that control water have the power. A large part of the comprehensive water plan included riparian re-establishment of the Santa Cruz. The plan calls for a whopping 25% of reclaimed waste water being sent to the Santa Cruz for creating a river that hasn’t flowed in a generation. The committee that has worked on the process for the past 20 months isn’t exactly ‘fair and balanced’. The business community had one seat on the board and isn’t happy with the results. This debate is the classic growth, no growth debate Tucson has been waging for 60 years. The no growthers are winning and that might not be that bad.
From this weekends Arizona Republic:
Faced with high population growth in the 1990s, Utah civic leaders became concerned about how to accommodate so many new residents without disrupting the state’s high quality of life.
Traditionally, elected officials would have taken the lead to manage growth. But residents of the libertarian-leaning state resisted that kind of top-down control.
So reformers in Utah instead started from the bottom up, building a grass-roots movement that led to the voluntary adoption of measures that observers say improved the state’s economy and helped it weather the current recession.
Compare that approach to Arizona’s, where reform organizers have so far limited public involvement to surveys and a few public forums.
To align the visions of elected leaders with the people they serve, Arizona may have to become more like Utah.
The Utah model
Although managing growth, not government reform, was the Utah initiative’s goal, the process did lead to change in how elected leaders work. In fact, the approach has become a model for problem-solving throughout the U.S. and even in some foreign countries.
Envision Utah was created in 1997, and together with state government, it developed tools to help communities plan. It educated the public on how to accommodate growth through higher-density zoning, the expanded use of mass transit and other strategies.
That education led residents to support proposals they might have once rejected.
The key to reform efforts that work, organizers said, is a bottom-up approach that makes citizens champions of the process. The core of Envision Utah’s model is to ask residents to reflect on their values and hopes for the future and then translate their thinking into action through interactive workshops. In its early days, Envision Utah would hold 50 public meetings for each step of the process.
Large-scale public participation is a catalyst for action, participants say. Tom Jensen, an architect from Logan, Utah, says political candidates in his region now compete with one another over who better supports the vision developed by residents for the Cache Valley.
“This has a greater chance to be implemented because it’s a grass-roots vision,” said Jensen, who also has an office in Tempe. “It gives political leaders cover.”
One example: Grass-roots support led elected officials in nine different communities around the Great Salt Lake to adopt a plan limiting development on the lakeshore.
While focused on growth issues, Envision Utah also has used its model of public engagement to create disaster-preparedness plans for the state and address issues related to higher education.
“We think that this is a process that can be used to address a number of issues in a community,” said Alan Matheson, a Tempe native and attorney who now serves as Envision Utah’s executive director.
Jeff Edwards, president and CEO of the Economic Development Corporation of Utah, said the state’s reputation for collaboration has helped officials lure businesses.
“Envision Utah has been a great tool for us in communicating to companies that this is a community that works together,” Edwards said. “We kind of take it for granted. They say, ‘Trust us, this is not the way it happens in other states.’ ”
While no group can take sole credit for a state’s economy, lately Utah has had plenty for Arizonans to envy. The state’s unemployment rate is 6.7 percent, compared with 9.1 percent in Arizona.
The key to success, Matheson said, is not only involving the public from the beginning but also keeping it involved until the end. Persistence, he said, also is critical.
“We’ve all seen examples of good plans that sit on the shelf,” Matheson said. “But nothing happens in the public realm without public support. The way you get public support is by giving people ownership in that plan.”
Arizona’s effort
In Arizona, would-be reformers have made some efforts to involve the public.
The Arizona We Want, an initiative of the Center for the Future of Arizona, aims to take the results of the October Gallup poll and translate Arizonans’ goals into concrete steps to achieve them. The extensive poll of 3,606 Arizonans was designed to produce “actionable insights” into residents’ thinking. Using questions tested in dozens of other communities, Gallup found Arizonans are highly engaged in civic life compared with residents in other states.
Despite that engagement, polls regularly find dissatisfaction with elected leaders.
“The endgame is still the endgame: to get citizens and leaders working on the same things, to start pulling together on the things that we need to do,” said Pat Beaty, director of the initiative and a senior fellow at the Center for the Future of Arizona, the group led by former ASU President Coor.
Beaty said the institute needs to move beyond abstract goals to engage citizens about issues affecting their communities.
“You can talk about the Arizona we want,” Beaty said. “But it has to become embedded in the Flagstaff we want, the Yuma we want, the school we want.”
Coor has toured the state for the past three months, meeting with elected officials and civic leaders and soliciting their ideas and support. And the center plans to send questionnaires to candidates for elected office so citizens can see where they stand on those topics.
O’Connor House Project participants have taken their ideas for reform straight to the Legislature. A spinoff group, Government for Arizona’s 2nd Century, is working with lawmakers to support bills that will ask voters to create a lieutenant governor’s position, eliminate term limits and end taxpayer funding of candidates.
To date, the group’s efforts at public involvement have been limited to an invitation-only town-hall meeting for business and civic leaders. The approach has raised questions about how the group will develop the support necessary to succeed.
The bills cleared the Senate Judiciary Committee and are scheduled to be heard in the Rules Committee this week.
Michael Bidwill, president of the Arizona Cardinals and chairman of the government-reform effort, said the time is ripe for change. “We have a unique chance to improve the way our government works,” he said. “When you look at any public-opinion poll, a lot of people are looking for government to work better.”
Organizers acknowledge reform in Arizona has had a spotty history. Many efforts lose steam before any real change is accomplished. Still, the state’s current crisis has brought a rare opportunity for real change.
“I see this groundswell starting to build,” said Sue Clark-Johnson, executive director of the Morrison Institute of Public Policy at Arizona State University and the former chairman and CEO of The Arizona Republic. “In the decades I’ve lived here, I have seldom seen such a compassion and a caring and a concern for the future of this state.”
But concern alone won’t be enough to reform state government.
“You can’t just do a vision and walk away,” said Brenda Scheer, dean of the University of Utah’s College of Architecture and Planning and an Envision Utah board member. “People have to own it, and they have to be champions of it.”
The names have been changed (sort of) to protect the innocent - or in this case guilty. Read the soap opera story we all know too well, by x4mr - HERE. Bravo!
Giffords’ re-election bid could be hurt by Obama backlash
WASHINGTON - As President Barack Obama and Democratic congressional leaders scramble to find a new message after a string of election defeats, Arizona Rep. Gabrielle Giffords appears increasingly vulnerable for her loyalty to the White House.
Just four months ago, the two-term Democrat looked so secure in her re-election that her district was rated solidly Democratic by the “Cook Political Report,” a nonpartisan newsletter that analyzes congressional races. Since then, the rating has slipped to “likely Democratic” and then to “leans Democratic.”
The latest drop came shortly after Republican state Sen. Jonathan Paton announced he was joining three other GOP candidates to challenge Giffords.
“Giffords will have to use all of her considerable campaign-trail talents to defend her votes for the stimulus package and the health-care and energy bills in a district that has a track record supporting ‘middle of the road’ candidates,” wrote analyst David Wasserman for the “Cook Political Report.”
Giffords, whose 8th Congressional District encompasses parts of Tucson and communities in Arizona’s southeastern corner, voted with the president 90 percent of the time last year, according to an analysis by the nonpartisan publication Congressional Quarterly.
Although Democratic Reps. Harry Mitchell and Ann Kirkpatrick also are considered vulnerable, they are less closely identified with Obama at a time when his priorities have been losing support in public-opinion polls and at the ballot box .
Those policies, including health-care reform and government spending on stimulus projects, were successfully attacked by Republicans who won the Massachusetts Senate seat last month and governorships in Virginia and New Jersey last fall.
Mitchell and Kirkpatrick voted with the White House 67 percent of the time, placing them in a tie for third on Congressional Quarterly’s list of the most rebellious Democrats. They opposed the climate-change bill that Giffords voted for.
Supporters said the bill would limit the greenhouse-gas emissions that cause global warming and reduce dependence on foreign oil. Opponents said it would increase Americans’ energy bills and cost U.S. jobs.
“I think an alert has gone out that any Democrat can get caught up in the kind of election backlash we saw in Massachusetts, especially a Democrat with a presidential-loyalty rating as high as 90 percent,” said Richard Herrera, associate professor of political science at Arizona State University.
Still, Giffords has a likable personality and a reputation for strong constituent service, qualities that should serve her well as she seeks re-election to a third term, Herrera said.
“Voters know her in a way they didn’t know Martha Coakley (the defeated Democratic Senate candidate in Massachusetts) or haven’t gotten to know the president,” Herrera said.
Giffords also could benefit from emphasizing some of her independent votes and appearing more centrist, he said.
There already are signs she is moving in that direction. The week before the Democrats’ defeat in Massachusetts, Giffords wrote a letter to House Speaker Nancy Pelosi, D-Calif., expressing concern that the Senate health-care-reform bill would hurt Arizona by raising the state’s Medicaid costs.
“I think that was a smart move,” Herrera said. “It’s an effort to pre-empt the charge that she is wholesale supporting everything the president or Democratic leadership proposes.”
Andy Stone, Western regional press secretary for the Democratic Congressional Campaign Committee, said Giffords has shown her fiscally conservative side by breaking with her leadership and voting against bills to raise the debt limit, bail out failing automakers and create the Cash for Clunkers program.
He also said the congresswoman has long understood that job creation is the top priority. The president and Democratic congressional leaders have been trying to refocus their message to emphasize jobs and aid to the middle class in the wake of the Jan. 19 Massachusetts election.
“Congresswoman Giffords has worked incredibly hard to bring solar-energy jobs and other opportunities to aid her district, she’s raised the necessary campaign funds, and she’s never taken anything for granted,” Stone said.
Giffords raised more than $286,000 in campaign contributions in the last quarter of 2009, according to a report she just filed with the Federal Election Commission. She ended the year with nearly $1.6 million in cash.
Her closest competitor, Jesse Kelly, raised nearly $102,000 during the same period and reported nearly $180,000 on hand.
Republicans say Giffords is not the centrist she has portrayed herself to be.
“It’s kind of late in the game for her to try to make the case that she’s a moderate,” said Joanna Burgos, Western regional press secretary for the National Republican Congressional Committee. “She already voted for the biggest bills that people are angry about, whether it’s the stimulus bill that didn’t deliver the jobs it promised, or the government-run health-care plan, or the (climate change) bill that would raise energy costs.”
By STEVEN GREENHUT
An old friend of mine has a saying, “Even the worm learns.” Prod one several hundred times, he says, and it will learn to avoid the prodder. As California enters its annual budget drama, I can’t help but wonder if the wisdom of the elected politicians here in the state capital equals that of the earthworm.
The state is in a precarious position, with a 12.3% unemployment rate (more than two points higher than the national average) and a budget $20 billion in the red (only months after the last budget fix closed a large deficit). Productive Californians are leaving for states with less-punishing regulatory and tax regimes. Yet so far there isn’t a broad consensus to do much about those who have prodded the state into its current position: public employee unions that drive costs up and fight to block spending cuts.
Earlier this month, Gov. Arnold Schwarzenegger proposed a budget that calls for a $6.9 billion handout from Washington (unlikely to be forthcoming) and vows to protect current education funding, 40% of the state’s budget. He does want to eliminate the Calworks welfare-to-work program and enact a 5% pay cut for state employees. These are reasonable ideas, but also politically unlikely.
As the Sacramento Bee’s veteran columnist Dan Walters recently put it, the governor’s budget is “disconnected from economic and political reality.” Mr. Walters suspects what will happen next: “Most likely, [the governor] and lawmakers will, to use his own phrase, ‘kick the can down the road’ with some more accounting tricks and other gimmicks, and dump the mess on whoever is ill-fated to become governor a year hence.”
Mr. Walters’ Jan. 10 column was fittingly titled, “Schwarzenegger Reverts to Fantasy with Budget Proposal.” Shortly before releasing his budget, the governor and Democratic state Senate President Pro Tem Darrell Steinberg held a self-congratulatory news conference. Mr. Steinberg used the spotlight to bemoan what he deemed to be unfair attacks on California. Mr. Schwarzenegger told a hokey story about his pet pig and pony working together to break into the dog’s food. It was an example, he said, of how “last year, we here in this room did some great things working together.”
Meanwhile, activists are fast at work. For example, the Bay Area Council, a moderate business organization, is pushing for a constitutional convention to reshape California’s textbook-sized constitution. The council’s aim is to ditch a constitutional provision that requires a two-thirds vote in the legislature to pass budgets. Other reforms being proposed include a plan to institute a part-time legislature and another plan to require legislators to pass drug tests. None of these ideas will ratchet down state spending.
To do that California needs to take on its public employee unions.
Approximately 85% of the state’s 235,000 employees (not including higher education employees) are unionized. As the governor noted during his $83 billion budget roll-out, over the past decade pension costs for public employees increased 2,000%. State revenues increased only 24% over the same period. A Schwarzenegger adviser wrote in the San Jose Mercury News in the past few days that, “This year alone, $3 billion was diverted to pension costs from other programs.” There are now more than 15,000 government retirees statewide who receive pensions that exceed $100,000 a year, according to the California Foundation for Fiscal Responsibility.
Many of these retirees are former police officers, firefighters, and prison guards who can retire at age 50 with a pension that equals 90% of their final year’s pay. The pensions for these (and all other retirees) increase each year with inflation and are guaranteed by taxpayers forever—regardless of what happens in the economy or whether the state’s pensions funds have been fully funded (which they haven’t been).
A 2008 state commission pegged California’s unfunded pension liability at $63.5 billion, which will be amortized over several decades. That liability, released before the precipitous drop in stock-market and real-estate values, certainly will soar.
One idea gaining traction is to create a two-tier pension system to offer lesser benefits to new employees. That’s a good start, but it would still leave tens of thousands of state employees in line to receive lucrative benefits that the state must find future revenues to pay for. Another is to enact paycheck protections that require union officials to get permission from their members before spending union dues on politics (something that would undercut union power).
My hope is that these and other reforms find support in unlikely places. Former Assembly Speaker Willie Brown, a well-known liberal voice, recently wrote this in the San Francisco Chronicle: “The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life. But we politicians—pushed by our friends in labor—gradually expanded pay and benefits . . . while keeping the job protections and layering on incredibly generous retirement packages. . . . [A]t some point, someone is going to have to get honest about the fact.”
State Treasurer Bill Lockyer, another prominent liberal Democrat, told a legislative hearing in October that public employee pensions would “bankrupt” the state. And the chief actuary for the California Public Employees Retirement System has called the current pension situation “unsustainable.”
As the state careens toward insolvency, these remarks are the first sign that some people are learning the lesson of the earthworm.
Mr. Greenhut is director of the Pacific Research Institute’s journalism center and author of the new book “Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation” (The Forum Press).
George Will weighs in on California liberalism. We’ve covered in this blog many many times. Arizona is faced with similar choices. Which way will be go?
It took years for liberalism’s redistributive itch to create an income tax so steeply progressive that it prompts the flight from the state of wealth-creators: “Between 1990 and 2007,” Voegeli writes, “some 3.4 million more Americans moved from California to one of the other 49 states than moved to California from another state.”
And the state’s income tax — liberalism codified — intensifies the effects of business cycles on the state’s revenue stream: During booms, the stream surges and stimulates government spending; during contractions, revenues dwindle but the new government spending continues. Voegeli says that if California’s spending had grown no faster than population growth and inflation from 1992 to 2006, it would have been $65 billion less in 2006, and per capita government outlays then would have equaled not those of Somalia or Mississippi but of Oregon, which is hardly “a hellish paradigm of Social Darwinism.”
It took years for liberalism’s mania for micromanaging life with entangling regulations to make California’s once creative economy resemble Gulliver immobilized by the Lilliputians’ many threads. The state, which between 1990 and 2007 lost 26 percent of its factory jobs and 35 percent of its high-tech manufacturing jobs, ranks behind only New York, another of liberalism’s laboratories, in the number of outward-bound moving vans.
It took years for compassionate liberalism to make California’s welfare menu contribute to the state becoming an importer of Mexico’s poverty. It took years for servile liberalism to turn the state into what Voegeli calls a “unionocracy,” run by and for unionized public employees, such as public safety employees who can retire at 50 and receive 90 percent of the final year’s pay for life.
Friend reports that when the seven-hour meeting ended, the protest moved to the UC president’s house. Two buses carried “some hundred Berkeley students and members of AFSCME.” Perfect.
The American Federation of State, County and Municipal Employees is one reason why California’s government employees — their numbers grew 24 percent between 1997 and 2007 — are the nation’s most highly compensated. And why California’s economy is being suffocated by the weight of government. And why the state’s budget has little left over for Berkeley.
Our goals and convictions that drive us to see change in Tucson
By Joe Higgins and Chris DeSimone, special for Inside Tucson Business
Published on Saturday, January 02, 2010
It’s resolution time and we are throwing ours into the ring. Save this article and check back on us when 2011 comes.
A new decade is kicking off with a down economy, our local governments are scrambling to hold on and if you are a business owner like us, you are waiting to see the light at the end of the tunnel.
During difficult times, setting goals and resolutions are more important than ever. When it comes to 2010 resolutions, we are committed to seeing them through.
Each morning the clock buzzer goes off at the crack of too early and coffee starts brewing. We cruise down the road to start our morning radio show at 6 a.m. Day in and day out for two hours we bring it, we serve it up; we do our best to wake this place up.
If you haven’t tuned in yet, what you’ll hear is a cross section of business owners and leaders, authors, politicians and educators sprinkled with local sports, and the best places to eat in town, (in our humble opinion.) Our job is to paint a picture for the listeners of how we think this community really runs. Our job is to Wake Up Tucson and get our community to start paying attention to the basics before it’s too late.
The radio program is just the beginning of our efforts to help change the poor business climate of the greater Tucson area. We are supply-side guys. We believe if business is allowed to thrive, the entire community benefits. All our board service, hundreds of one-on-one meetings, dozens of business events, blogs, and even this column take time away from our business and personal lives. So why the heck do we do what we do?
Below are our 2010 New Year’s resolutions and few of our motivations. Maybe just maybe, they’ll motivate you too.
• With young kids in elementary school, we hope to create opportunities for our children to stay in Tucson after graduating from the U of A. Losing more than 4,000 college graduates each year because of a lack of suitable jobs is unacceptable. The U of A is a brain factory and their end products are fleeing town and not looking back.
• We see an ever-growing pool of people seeking charitable assistance. We realize that what these struggling families need most is a good job that pays all the bills. Creating jobs and industries is not Tucson Regional Economic Opportunities’ job, it’s not the politician’s job, it’s everyone’s job. Ask yourself how much you have personally benefited from this community.
• We realize that the Tucson City Council, Board of Supervisors and legislators constantly make decisions that benefit special interest groups’ voter blocks. We will work tirelessly to end turf wars and bring the fractured business community together to finally have a seat at the table. Unless and until we get our act together, the business sector will continue to be marginalized, minimized and exploited. Check out www.ChangeTucsonChamber.com for details.
• We will be the voice for the merchants downtown. These brave souls have had their patience and loyalty repaid with insider deals, overpaid bureaucrats, too much government interference and very little progress.
• We promise to tell the community, elected officials and anyone who will listen that every day in Tucson should be “Appreciate Small Business Day.” A weak proclamation right before a city election isn’t going to cut it anymore.
• Our goal is to expose and educate the community about funding and accountability measures at the MTCVB, TREO, Downtown Partnership, Fox Theater/Tucson Convention Center and anyone else that takes our tax dollars in an effort to make our community better. If these groups are doing their job we’ll tell you, and if not, let’s just say we aren’t lacking for material.
These are some of the reasons why we do what we do and these are our resolutions for 2010. Now ask yourself, “Why do YOU do what YOU do?”
Let 2010 be the year that you got off the sidelines and into the game, before the game is over and we’ve all lost. Learn more at ChangeTucsonChamber.com, TakeBackTucson.com, ArizonaPolicyInstitute.com and our daily blog at TucsonChoices.com.
Log on, tune in, educate yourself on the issues and get off the couch!
Contact Joe Higgins at joe@joehigginsinc.com or Chris DeSimone at provenpartner@comcast.net. They’re the hosts of “Wake Up Tucson,” which airs 6-8 a.m, weekdays on The Voice KVOI 1030-AM.
Copyright © 2010 Inside Tucson Business
Proposed Budget Balancing for FY 2010 & 2011 from:
City Manager Mike Letcher dated 12/28/2009
Here is my take on the plan. I also offer my own observations and recommendations:
The plan is likely to avert insolvency
The plan is almost certain to lead to a significant drop in our credit rating
The plan reduces the level of core services
The plan does not produce a budget that is ‘structurally balanced’
Liquidity has been evaporating and necessitates quick action to avert insolvency
The plan ignores many potential areas of cost savings
We must make structural changes to our cost structure
Arizona State Treasurer, Dean Martin, has stated that revenue levels have dropped back to levels seen in 2004/2005. 2007 marked the high water mark of economic activity and we will not see these levels again for 6 to 7 years or longer. This is a long-term, structural drop in revenue -and- expense levels must also adjust. We do not have 7 years of one-time fixes. We must begin immediately to make structural changes to our cost structure. This can be augmented with revenue sources that have a more stable profile. Taxpayers have a very limited stomach for new revenue sources or taxes.
Landlord/Renter Tax
One the positive side, this revenue source is more stable than sales tax revenue and this helps with sustainability. The tax does hit a specific demographic segment that tends to be a lower socio-economic profile.
Utility Tax
The Utility Tax was increased for FY 2010. This tax is broad-based as it impacts almost every demographic profile -and- is a more stable revenue source. If new revenue sources are to be imposed, I recommend they meet these 2 criteria: broad-based & more stable.
Parks and Rec Fees
Councilman Glassman has frequently spoken of ‘Cost Recovery’. Currently, many Park and Rec activities are offered at no cost to participants or very low cost (example 25¢/day to swim). This is not consistent with ‘cost recovery’. We must immediately begin to recover a larger portion of the actual cost of every program. If our target is simply 50% cost recovery; this would produce additional revenue of over $7 million/year. (source: FY 2010 Adopted Budget; pgs B-67to B-77)
Sun Tran – Van Tran
The general fund subsidizes bus service with $32 million/year; this is in addition to large subsidies from other governmental entities. The actual cost to offer the service is almost 5 times the fare paid by riders. We must reduce this subsidy through a combination of reduced routes and fare increase. If our target is 50% cost recovery; this could have a positive impact on the budget of as much as $15 million/year. (source: FY 2010 Adopted Budget; pgs B-91 to B-98)
Outside Agencies
This area is ripe for favoritism and facilitating ineffective agencies. This needs to be a thorough and arms-length competitive process. If you are effective you receive more, if you are ineffective you get nothing. There is a perception that once your organization gets on the list you are on the list forever. There needs to be political will to remove ineffective agencies. I work with and financially support the Community Foundation for Southern Arizona (CFSA). CFSA has in place a competitive process to evaluate grant applications from charitable organizations. This includes site visits, program evaluations, financial review, effectiveness evaluation vs. similar organizations, fundraising… Perhaps CFSA would be willing to directly assist the City with applications. At the very least we need to adopt this model.
Credit Rating
The rating agencies are very clear about what we must do to maintain our credit rating. We must: 1) Produce a budget that is ‘structurally balanced’, i.e. not reliant on one-time fixes; 2) Rebuild the rainy day fund to 10% of general fund ‘promptly’ to about $42 million.
The plan proposed by the City manager does NOT produce a ‘structurally balanced’ budget for several years. The plan leaves the rainy day fund at the current level of about 2% to 3% of general fund. In addition, the Self Insurance Fund remains with a large deficit which is sure to catch the attention of the rating agencies. I expect our credit rating will drop several notches within the next few months.
(Source: Fitch, Standard & Poor’s, Moody’s reports from May 2009)
