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Mon, April 22

Board OKs $131 million budget; will reduce taxes

PRESCOTT – The Yavapai County Board of Supervisors approved Monday what may be the county's biggest property tax reduction in history.

Strong economic growth throughout the county and a shift to more reliance on sales tax revenues helped make the reduction possible. Supervisors also credited County Administrator Jim Holst and Finance Director Mike Danowski and their employees with producing a well-balanced budget.

A new two-tenths-cent sales tax for a jail district took a $4 million burden off the general fund to pay for expenses related to a burgeoning jail population – a population which has come hand- in-hand with overall population increases in the county.

Ironically, that increase in population also is fueling the county's revenues from sales taxes. The county's revenue from the half-cent sales tax for major road improvements jumped 11 percent last year (ending June 30), and its state-shared sales tax revenues increased 13 percent. The 13 percent figure also factors in population or property valuation, whichever is greater, making it a greater number than the other sales tax figure.

"We are relying less on property tax and more on sales tax," Holst observed Monday during the supervisors' 2000-2001 budget hearing. The county's property tax rate of $1.62 is about 60 cents lower than the maximum that state law allows, he said.

The sales tax revenues swing more with the economy than other types of taxes, but Holst said the county easily could cut back on its building program with an economic downturn and still keep operations going, "so I think we're pretty well protected."

The $131 million budget is about $100,000 less than the tentative budget the supervisors approved a month ago. The drop occurred because of a change in the state-estimated employee retirement costs, Holst said.

Board of Supervisors Chairman Chip Davis asked Holst to explain briefly why some departments' budgets increased:

• Medical Assistance rose 42 percent because the county transferred $2 million from that department last year to supplement its general fund, then replaced it.

• Elections rose 31 percent because it's a general election year.

• Assessor's budget increased 14 percent because the state doubled its contract charge to 12 counties to pay for its updated computer system.

• Human Resources rose 23 percent because Holst cut out a position for 1.5 years while he was Human Resources director, deciding to let a future director restructure the department. Now the department is getting more employees for a stronger emphasis on recruitment, training and market compensation.

• Management Information Systems increased 21 percent because of new technology purchases, more systems support employees and the transfer of computer capital costs from other departments into MIS.

The supervisors will adopt tax rates for the county officially at their next meeting in two weeks, Holst said.

Davis took that comment as an opportunity to point out that only 14 percent to 20 percent of property owners' tax bills go to the county government. But the county sends the bills, which leads people to think the county is doing all the taxing, he said.

"While we've strived to lower the tax rates, there are other entities that raise rates out of necessity that are not as visible, and we tend to take the blame for that," Davis said.

The county budget is an increase of 10 percent or $12 million over last year's budget, but much of that increase is not the result of new spending. It includes the $4 million from the new jail district sales tax, $3.4 million for two special districts improvements that only residents of those two special districts will pay for, a $2 million carryover from last year's regional roads improvement budget, and $1.3 million for health care for indigent people; the federal government will foot most of that latter bill.

The capital improvements budget includes $3 million to start construction on a new administration building on Fair Street in Prescott; $700,000 to finish additions to the Cottonwood administration building; about $500,000 to move the Facilities Department to the Public Works complex; and $325,000 to buy land in the Prescott Valley area for future administrative offices.

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