Pensions Siphoning Yuma County Budget
Posted: Monday, Mon Mar 16, 2015
Ruling drains $652,000 from Yuma County
Yuma County will take the entire $652,000 bite a state Supreme Court decision on pension reform will siphon from its budget in the coming year, one of a series of storm clouds developing over its near-term budgetary future.
The county Board of Supervisors could have gone with a three-year payment plan during its Monday meeting, but decided the finance costs involved wouldn’t be worth it, especially since the same issue is expected to come up again in the future.
“That’s probably all the more reason we should take care of this now, because it could add up to much more later,” District 4 Supervisor Tony Reyes said.
The court overturned part of the reforms passed by the state Legislature in 2011, in which benefits for public safety retirees already in the system were rolled back. The change left cities and counties which have created pension funds within the statewide system owing back payments to current retirees.
But District 5 Supervisor Greg Ferguson, who sits on the board of trustees for the Arizona Public Safety Personnel Retirement System, said a separate court decision on the rollback for current public safety employees paying into the system is still pending.
“So there’s another shoe hanging out there,” he said.
County Administrator Robert Pickels said Yuma County does have the money now to handle the back payments to sheriff’s, probation and correctional officers, but it might have to consider other options if that second ruling falls as expected.
“We may have a completely different situation when addressing the results of that decision, which we suspect is going to be consistent with the earlier decision,” Pickels said.
Monday’s was the first board meeting since Gov. Doug Ducey signed a $9.1 billion budget with deep cuts to higher education, and which required counties to help fund operations of the state Departments of Revenue and Juvenile Corrections. A multimillion K-12 school funding lawsuit against the state is still unresolved.
All told, these new state mandates are projected to cost Yuma County about $700,000 next year.
Pickels and the county supervisors “vented” to one another about the state budget and the process that went into creating it, saying that decisions were made by a small group of legislators with little input from the rest of the House and Senate, or from counties, cities or other parties affected.
Pickels noted the ramifications of the state budget issues were already beginning to take root in some of Monday’s decisions on employee benefits, as the board voted to shift 35 percent of health insurance premium increases to its workers, versus the 20 percent they’ve done in the past.
He said, “We’re not going to be able to do anything positive for our employees, and this is also going to cause us to accelerate our long term stabilization needs” in terms of finding new county revenue.
He said it was too soon for him to talk about what his recommendation to the supervisors on budget action might be, but his suggested course of action will be presented to the board at the May 4 meeting, with additional budget sessions May 11 and 12 and adoption of a tentative budget expected May 18.
Board of Supervisors Chairman Russell McCloud said, “I still have a grave concern, our budget is structurally imbalanced.” Last year he suggested raising the property tax levy during county budget talks, an idea which quickly died.
Later Monday Republican Sen. Don Shooter of Yuma, who chairs the Senate Appropriations Committee, said he supports Ducey’s budget “1,000 percent” in dealing with the current budget climate, but added county and other local government officials were right to feel they were backed into a fiscal corner by the state Legislature’s actions.
“We shoved down the solution on them as far as raising taxes, because there are people over here who are too cowardly to do it themselves,” he said. But he rejected the idea of the budgeting process not being inclusive enough.
“The process is the process, and if 1,000 people come up and tell you ‘we don’t like something,” it doesn’t change the numbers, it doesn’t change the fact we’re upside-down in the budget,” he said.
He also said that after the legislative session ends, he plans to put together a bipartisan group of experts in education and other fields to come up with a solution to funding K-12 and higher education.
“Cutting is not a strategy, and what we have to do is put in the hard work to come up with a long-term, realistic solution to finding education in this state,” he said.