Yavapai County officials are optimistic that they can avoid raising the county's property tax this year.
They may be able to keep the tax rate the same while still giving employees an across-the-board two-percent raise and paying 10 percent more of the cost of their dependants' medical coverage. Supervisors voted Monday to commit to those two employee benefits at a cost of $780,000, but not for extra money for merit pay increases.
One major way the county could keep the property tax rate the same is by shifting an extra five percent of the county sales tax revenues to the general fund and out of the road funds, County Administrator Jim Holst said. Currently, 80 percent goes to regional roads because of a Board of Supervisors policy, and would need a unanimous vote to change.
The county's property tax rate currently is $1.61 per $100 of assessed valuation. Supervisors haven't raised the rate since 1987 when they increased it to $2.29 – and they actually dropped the rate all but two years since then.
Supervisors spent all afternoon with Holst Monday going through each department's requests for major budget increases, such as new employees or equipment.
Holst told the supervisors they had $880,000 to distribute for new capital expenses after the employee pay and benefits increases. The draft budget currently totals more than $170 million.
Monday was the supervisors' first budget meeting since May 7, when they finished meeting with every department head about their proposed budgets for the year that begins July 1. They need to adopt a tentative budget by July 15, and for the first time in years, they may wait until then because of uncertainties about revenues.
They were especially glad to hear recently that the Legislature hit the county with only about $182,000 in unexpected costs. Legislators had been contemplating passing on about $859,000 worth of state costs to the county, and that had supervisors worrying they may be forced to increase the property tax rate. County governments' opposition to those costs likely helped, Supervisor Chip Davis said.
Still, the county will get about $1 million less next year in state-shared sales tax revenues than this year, Holst said.
Before Monday's meeting, Holst already had trimmed approximately $1 million from department heads' requests and other areas. For example, he eliminated all out-of-state travel requests.
On the other hand, proposed Development Services Department fee increases could bring in $750,000 more than anticipated, Holst said.
"I've always looked at fees as user fees," Supervisor Gheral Brownlow noted. The fee increases will put costs on land developers and new construction, for example, instead of all taxpayers.
The county also will get nearly a half-million dollars more than it anticipated from the federal government's Payments in Lieu of Taxes on federal property within the county.
While the fees and PILT money padded the budget a bit, two organizations owe the county money and that will reduce the county's budget revenues if they don't pay up.
The Yavapai County Fair Association has owed the county $250,000 since last year. Supervisors have said they are willing to take annual payments from the association, which runs the county fair and Yavapai Downs horse racetrack.
And Maricopa County still hasn't paid Yavapai the $60,000 it owes during this current budget year, under an agreement to let Maricopa run the Lake Pleasant park that sits mostly in Yavapai County.
The revenue picture continues to change almost daily, Holst said.
"We're either going to get a little better or a little worse in the next couple of weeks," he said.
The supervisors' next budget-related meeting may be on July 1, when they give department heads an opportunity to seek restoration of their capital requests.