Families cut back on spending, forcing businesses and organizations to slash staff. Unemployment soared, the housing and construction markets faltered and skyrocketing fuel costs caused motorists to drive less and some vehicles went unregistered.
That proved detrimental to the state’s Highway User Revenue Fund (HURF), which relies on fuel taxes at the pump, motor carrier fees, vehicle license taxes and other miscellaneous fees as a source of revenue. HURF revenue is distributed to cities, towns, counties and the State Highway Fund. It serves as a critical funding source relied upon by counties to maintain and repair our highway infrastructure.
As the second largest county in the nation at more than 18,000 square miles, the county uses these funds for road maintenance and snow plowing to ensure roads are safe and passable.
In Fiscal Year 2012, which ended June 30, HURF generated more than $1.2 billion, which was nearly a 13 percent decline from the $1.38 billion placed into the fund in FY 2007. The downturn in the economy and state reallocation of county HURF revenue caused an even sharper decline for the County, which saw more than a 25 percent decrease in HURF dollars to about $8 million in 2012. At the peak in FY 2007, the County received $10.7 million.
The economic recession of 2008 forced the County and other local governments to make difficult decisions. In Coconino, positions were left vacant, wages were frozen, and projects focused on the County’s aging infrastructure were postponed or have gone unfulfilled.
Routine maintenance of the County’s infrastructure is instrumental to avoiding long-term issues and even costlier projects in the future. The impact of our local recession was compounded by actions taken at the state level.
Since FY 2008, the state has redirected some county HURF money to fund other state agencies to close its budget gap. The loss of these funds has had a significant impact on our capital investment projects aimed at maintaining and improving our current infrastructure. It’s estimated that HURF reallocations by the state have cost Coconino County more than $2.5 million.
The County is working with the state’s 14 other counties and the Arizona County Supervisors Association to educate the governor and the legislature on the significance of these funds and show that passing additional financial burdens onto the counties affects our rural communities.
The County is limited in its ability to generate revenue. Local sales and property taxes are capped by state law and revenue capacity is either insufficient to provide a long-term funding solution or is restricted for a specific use.
Additionally, the County faces cuts on the federal level as well.
The County has traditionally received $2 million in critical funding through the Secure Rural Schools and Community Self Determination Act, known as SRS, to be used for road maintenance. In July, Congress approved a one-year reauthorization of SRS, which expired Sept. 30, 2011. The reauthorization extended federal funding until Sept. 30.
Knowing that the reliance on federal and state funding can no longer be looked to as a sufficient source, the County will be looking at its funding options and our levels of service to meet our needs. However, as state and federal leaders continue to allocate funding elsewhere, providing these services is proving increasingly difficult.
We know our state and national leaders must act to close budget shortfalls, but they must also provide a lasting solution to ensure there will be reliable funding to sustain the critical infrastructure our county residents need. FBN
Interim County Manager Mike Townsend is a lifelong resident of Flagstaff.