The Mojave County Oversight Board will go into this year’s budget meeting with a deficit of $4 million. And if inflation continues to trend upward across the state, county finance officials expect an imminent budget crisis for county governments within the next two years.
As Governor Hobbes prepares the state budget in Phoenix this summer, Mojave County officials are trying to determine how much room local authorities have to navigate what could be a tenuous economic zone in western Arizona.
Mojave County Commissioner Travis Lingenfelter said this week, “Ramped inflation and supply chain shortages are creating a difficult situation nationwide.” “Without new recurring revenue in fiscal 2025, the Mojave County Treasurer expects an additional $8 million to be added to the current $4 million deficit, which inflationary pressures will further increase spending. It’s unlikely, but it’s unlikely.”
Lingenfelter said county officials haven’t had much discussion about possible job cuts in the county to deal with the imminent crisis.
“If cuts are necessary to balance the adopted budget for next fiscal year, the county’s current Capital Improvement Projects program will need to be cut, starting with the postponement of the Mojave County Morgue Plan.”
Lingenfelter said the county will work with Elters and his staff to streamline the development process by taking steps to facilitate future development in Mojave County as it expands its commercial, industrial and residential base. said I need to.
But as far as possible solutions to the looming financial crisis go, Lingenfelter doesn’t think tax increases are an effective solution.
“The board should seriously consider working with county administrators and professional staff to diversify the county’s revenue streams and reduce its overreliance on property taxes,” Lingenfelter said. Stated. “Overreliance on property taxes can be a serious burden for seniors, low-income homeowners, and full-time residents.”
Raising property taxes isn’t the solution – but maybe a sales tax?
Lingenfelter said the tax hike could potentially create a barrier to increased employee home ownership and impede certain capital-intensive business development into Mojave County. Lower property tax rates, on the other hand, could attract new businesses to Mojave County, reduce the tax burden on those already living in Mojave County, and expand the county’s tax base. .
“A quarter-cent sales tax would allow the Board of Supervisors to reduce Mojave County’s major property tax by 36 cents per $100 of assessed value, giving residents an estimated $12 million a year, according to county officials. That $12 million could be invested by Mojave County residents and spent elsewhere.”
But the quarter-cent sales tax could only go into effect if approved by a unanimous vote of the Mojave County Board of Supervisors.
“Without the quarter-cent sales tax, the county would be missing out on an estimated $500,000 in construction sales tax revenue on just three projects in the Kingman area alone,” Lingenfelter said. “That amount is even higher when you factor in the construction sales tax the county can collect on projects in the Bullhead City and Lake Havasu City areas and elsewhere in the county.”
reality of the situation
County officials said this year’s state budget could provide assistance to some departments of Mojave County. While the funding may soften the blow from Mojave County’s budget deficit, officials may need to proceed cautiously as the county braces for continued budget constraints.
Mojave County Supervisor Buster Johnson has served as the elected representative director of the City of Lake Havasu for nearly 30 years. This year’s deficit is not the first.
When Johnson took office in 1997, the county was in dire financial straits.
“During my first term, I cut the budget by 10% each year for three years,” Johnson said on Friday. “At the time, we had a sheriff’s void order that was expiring … we needed money, but we had voter approval, so we decided to void it. and enacted a 1/4 cent sales tax for the sole purpose of rebuilding those buildings.Our vehicles had 200,000 miles on them, so we started a vehicle replacement system. Many of them were sheriff’s vehicles, and this was a serious liability and safety issue.”
Overcoming budget deficits requires planning and foresight, Johnson said.
“First we have to accept the reality of the situation,” Johnson said. “We need to identify the legally mandated services and base our budget on that. Then look to the future and maintain a balanced budget that incorporates growth for stability. Fourth, explain to taxpayers what you do and how it improves county services.”
County officials await governor’s budget
Next year’s state budget includes about $9 million, Lingenfelter said, adding much-needed additional funding for the construction of a new substation for the Mojave County Sheriff’s Office. The state will also provide an additional $500,000 for the Sheriff’s Office Command Center and an additional $3.4 million for the County Charging Projects program.
Mojave County Superintendent Gene Bishop added this week that while the state’s budget has not been finalized, state funding may be due for projects such as transportation, broadband and water infrastructure.
But Bishop said until the state budget is finalized, county officials will continue to discuss the economic situation and possible options for Mojave County to generate additional revenue.
“The interim budget will be adopted in early June, followed by final budget hearings and adoption in mid-July,” Bishop said. “Until then, a lot can happen. All I can say at this early stage of the budgeting process is that I don’t have a crystal ball.”
