Board of Supervisors - Regular Meeting

Good

morning. I'd like to welcome you to the Monday, 05/04/2026 board of supervisors informal meeting, and welcome all of you here, for a very special event to start out with, which is the American essay America two fifty essay contest. So when I became board chair at the beginning of this year, I had a special surprise in my chair speech for my predecessor, supervisor Thomas Galvin, I appointed him to head up Maricopa County's efforts to celebrate America America's two hundred and fiftieth anniversary, and man, he took this job and ran with it. I haven't been able to keep up with him. But we are here today to celebrate the winners of our America two fifty youth essay contest.

And supervisor Galvin, I'm going to turn this over to you to bring up our winners and explain a bit more.

Yes. Good morning, everyone. Absolutely. Will our three distinguished guests please come up forward? Good morning and congratulations. And also, I wanna acknowledge their families who are here today as well. Also, our distinguished guests. Okay. You're in the hot seat now. Good morning, everyone, and thank you, madam chair.

It's a tremendous privilege to have been entrusted with this role of celebrating our nation's milestone and our nation's history. I was a history major in college. I've always interested in history, and I know not everyone is. But I do know that people do share a collective love for our country, The United States Of America, and for all the privileges we have been afforded, and all the blessings that have been bestowed upon us. I'm also the son of an immigrant, and I'm incredibly proud to be an American just as my mother is.

But I know all of us, no matter what our background is, we're all proud to be Americans. And I do think it is important time in our nation's history to focus on being proud of what we have accomplished as a country, and to reflect how far we've come as a country, and also to acknowledge that future generations need to hear from us, their elders, about what is beautiful about America. County staff divided this contest into three age groups, third through fifth grade, sixth through eighth grade, and high school. For the elementary school contest, students were asked to write a one paragraph response. The middle school contest requested a three paragraph response, and the high school contest called for five paragraphs.

County staff graciously offered their time to read, and I'm proud to say, 320 submissions from Maricopa County and to pick our ultimate winners. That being said, let's introduce the winners from our elementary school contest, fourth grader, Liberty Sharp. Liberty in her essay wrote America is a cookbook. Liberty is a fourth grader from district three, madam chair, and attends Desert Cove Elementary School. Liberty's essay prompt was, what makes you proud to be an American and why? Liberty, please begin.

I am proud to be an American because we have so many different types of people and cultures all living together in one place. America is like a giant cookbook full of different recipes from all over the world. Every person is like a special ingredient who brings their own traditions and special flavors to make America even better. For example, some families celebrate Ramad an with a very early breakfast and lots of prayers, and others celebrate the Lunar New Year with dragon dances and dumplings. My family celebrates Thanksgiving with turkey and cranberry sauce.

All of these traditions add different flavors and ingredients to America's cookbook, but freedom is the most important ingredient. Freedom keeps us strong and gives every American the chance to learn and grow and follow their dreams. All in all, I am very proud to be an American.

Thank you. As a fourth grader, I am just so impressed by that wonderful essay. And the line that really struck me is when you said freedom is our most important ingredient. And frankly, don't think many adults could really touch upon that. But to say that America is like a cookbook, I've never heard that before. And I think that's just a really beautiful rendition of our of our country. And, thank you so much for sharing your essay with us and thank you for reading it out loud and congratulations on winning first place.

Thank you.

Our next winner is also a district three residence, which been is not too surprising because she's Liberty's sister. So it runs in the family, which is amazing. The winner of our middle school contest is seventh grader Lyric Sharp. Lyric attends Shea Middle School and her winning essay is entitled More Than Just a Piece of Fabric. The essay prompt, what is your favorite symbol of America and why? Lyric, please go ahead.

More than just a piece of fabric by Lyric Sharp. My favorite symbol of America is definitely the American flag. When I see it waving in the breeze at my school or during a parade, it makes me feel proud to be The flag is so much more than just a piece of fabric with a design on it. To me, the flag represents the unity of our nation and how all the different states come together to make one big strong country. Each star and stripe stand as a reminder that even though we are different, we are all united under one flag.

The design of the flag is very important because it tells the story of our history. There are 13 stripes that represent the original colonies and started our country, and 50 stars for all the states we have today. I also learned that the colors have special meaning, like like red for being brave and blue for justice. It is cool to think that even though the flag has been changed 27 times as we added more states, it always shows that we are working together like a giant team. The current design has been around for more than sixty years.

I noticed the American flag almost everywhere. From the front page from the front of my school to the uniforms of athletes at the Olympics. Every time I say the pledge of allegiance in the morning, it reminds me of the freedoms we have that people have fought hard to protect. It also reminds me that being an American means showing kindness, courage, and respect for one another. It makes me feel like I'm part of something much bigger than just my own city or even state. I choose the flag as my favorite symbol of America because it stands for hope and reminds me that our country is a land of endless opportunities for all of us.

Thank you so much. That was wonderful. And I think it's just a testament to your family and to your parents that two siblings out of this contest of three categories ended up in first place, which is really terrific for both of you young ladies. But also, the way you delivered your essays, you did such a good job of reading and presenting. And I love the idea that you talked about the flag.

You know, during the Olympics, I was telling my son who's in second grade and he loved watching all of the hockey games, the men's and women's, that our national anthem is about a flag. And I believe we're the only country in the world that the national anthem is about our flag. The song is about what happened to our flag at Fort McHenry in Baltimore during the war of eighteen twelve. And so you choosing that fabric, it's something that Americans see every day. And I know if you ever travel around the world and you see that American flag, it reminds you of home. And so, that was a great great idea to pick on that. So, you so much and congratulations.

Thank you.

And our other winner from the high school division is Veronica Rodriguez. Veronica is a junior at Valley Vista High School in supervisor Lesko's District 4, and I know you had an opportunity with your parents to visit supervisor Lesko, and I know she's very proud of you in your accomplishment. Veronica's story has struck a chord with me. Obviously, she has herself and her family have an immigrant story as well. Veronica's essay is titled More Than a Dream. In response to the prompt, what is the American dream and what does it mean you? Veronica, please go ahead.

For my essay, More Than a Dream, when searching for the definition of the American dream, it is commonly understood to be the belief that through hard work, determination, and initiative, any individual can achieve upward mobility, financial prosperity, and a better life regardless of their social class or birthplace. However, for me, the American dream means much more than this. As an immigrant, it represents the opportunity that The United States has given me to succeed. This opportunity may seem small and insignificant to some, but for me, it is the only way to reach my goals. Unfortunately, many people back in my home country, Venezuela, wish they had the same chance.

It may be difficult to understand why I feel this way, but it is because of the journey that brought me here. My family and I moved to Surprise, Arizona in 2017 because my father became a coach for the Texas Rangers, Or at least, that's what my seven year old self believed. It was a new place, a new school, new friends, a new house, and a new language. Everything felt unplaced and unwanted. I begged my mother to move back, and it was was too difficult for me.

I didn't understand why we had to go through this change when my dad was the only one working a few months. However, as time passed, things got easier. I learned English, made new friends, found a welcoming school, and finally started to feel like I belonged. After half a decade, I still hadn't hadn't visited my birth country. I had lost touch with my grandparents, cousins, friends.

As I grew older, I began to understand the true meaning behind our move. I asked my mom why we had left, even though we had the opportunity to go back. She explained that the sacrifices we made for my siblings and I was to give us a life full of opportunities. That was the moment I realized the true meaning behind the American dream. It was the sacrifices my parents made to leave their beloved country and give us a chance to live to reach for the stars.

In Venezuela, there are limited opportunities for education, sports, resources. I feel blessed to have this chance to pursue my dream in a place where through hard work, dedication, and determination, I can achieve anything I want in life. It is unfortunate that for many, the American dream will remain just a dream, but for me, it is the opportunity to wake up every day and fight for my goals. It is the sacrifice of not following the crowd, but standing out instead. I dream of being a journalist one day.

I dream of being seen and heard. I dream of not being judged, I appreciate it for my hard work and determination. I had the opportunity to be recognized by the mayor of Surprise, Arizona, Kevin Sarton, with a challenge coin after interviewing him at an event. This means much more than a recognition. It is the vivid proof that my hard work is paying off.

Thinking back seven years ago, I never thought I'd be able to speak in a room full of people without stumbling my words, let alone the city mayor. Today, I'm here chasing my dreams to be a journalist because this beautiful country decided to give me the opportunity to shine where I only saw darkness. The truth is The United States will never truly feel like my home. I will never be able to go to my grandmother's house and have her wait for me with a warm dinner. I will never be able to wake up on a weekend at my cousin's house while my aunt cooks breakfast.

I will never see where my grand where my parents grew up at. I will never forget where I come from. However, I am grateful for this opportunity called the American dream. It has allowed me to live in this magnificent community that has welcomed me, mentored me, and given the given me the chance to create a life worth remembering. Thank you.

Beautiful. Congratulations. That was an excellent essay. And we saw a lot of excellent essays, but I remember reading yours and I was just overcome with emotion reading what you wrote about because you're sharing your personal story. And every single family here in America has a personal story, and you may feel like yours is unique and yours is unique in its own way, but we all have that same story where either we or our parents or our grandparents had to move here for different circumstances, and it was very tough for them.

But one thing I remember my mother telling me as an immigrant is that, yes, she misses her home country, but now she has the benefit of having two beautiful countries that she can call home. And one thing I know is that Venezuela is a beautiful country with beautiful people. And I know that the Venezuelan people have been through a lot, and I'm sure your parents have been through a lot, especially this year. But you nailed it. You talked about your parents' sacrifices, which means that you recognize what your parents are doing for you and your sister. But now, the opportunities for you are boundless. You talked about hard work and determination. And one thing I know in The United States Of America, Veronica, nothing can hold you back. You are the master of your destiny. And if you wanna be a journalist, as long as you work hard, you will be a journalist.

And I'm really grateful that you didn't ask us any gotcha questions today. Okay. Thank you. Congratulations to all of you. Congratulations.

I'm going to ask them to stay seated for just a minute. And supervisor vice chair.

Thank you. I just wanna say congratulations to all of you. And your future is so bright. I mean, my goodness. What a great job you did, and what a great job not only of writing, but your your presentation. You know, I myself didn't know quite what I was gonna do when I graduated from high school and from college, and and god led me on a path where all of a sudden, I was flying in air force one with the president of The United States and was serving in congress, and I sure didn't think that that was going to be my future when I was

in

school. But it just goes to show that anything anything is possible in The United States Of America. If you work hard, you're honest, and you live by core values. So congratulations to all of you. You have all have a bright future, and I wish you only the best.

Thank you. Thank you. Supervisor Stewart.

Thank you, madam chair. And wow, that was amazing, ladies. And I I can't tell you how impressed I am. You're embodying the spirit of what the American dream is all about. And, you know, I I I'm a bit of a empathetic crier, and I think I looked out and saw your parents breaking down, and it got me. So to see this type of patriotism, this type of drive for American exceptionalism coming from our our younger generation is is empowering and it's inspiring. So thank you so much for sharing. Great job.

During my entire time, I would say decades in politics, I have really worked to mentor young people. And I always used to say, and I still do, you're going to inherit this mess when we are gone from this planet. Can I just tell you, you give me so much hope for the future of our country? And nothing is going to get in your way, and we are so honored to have had you come today and read your beautiful essays. Thank you.

Thank you. And congratulations.

Thank you, doc.

And madam chair, if I may.

Supervisor Galvin.

I just wanna say thank you so much for this opportunity. It's just been a tremendous honor.

I'm trying to keep up, but thank you for taking this task so much to heart. We would like to say thank you to the parents and family of our contestants and proceed on to another the second part of our public agenda, which is the County Supervisors Association of Arizona Budget Outlook. And I would like to welcome mister Craig Sullivan whom I've known for many years to the pit or whatever you all call it, to that's what sheriff Sheridan said. No, I'll I'll stay in the pit. Okay.

Whatever. But I have been a member of CSA since I took office in my first county office since January 2025. And Galvin put me on the LPC and said, please go. I said, okay. I'll go.

And the more I work with the supervisors from Arizona's 14 other counties, the more I work with the CSA, I cannot begin to tell you how much I've learned, how impressed I am, and how consistent their efforts are to educate new county supervisors, legislators, and all forms of government here in the state of Arizona and even nationally about what the CSA is, what the CSA does. The most interesting thing I found running for the county is nobody knows what the county does. If you spend a few hours with mister Sullivan and his staff, you learn a lot. We are looking at some tremendous budget challenges this year. And I am hopeful.

I I think it is well worth our board members' time to take a walk through at what we and 14 other counties are facing. Keep in mind that there are very small counties and there are couple of really big ones and some medium sized. We're all going to be suffering some real challenges and limited resources to meet those challenges. Thank you. Welcome, mister Sullivan. Please proceed.

Madam chairman, members of the board, thank you very much for this opportunity to be before you. I have to tell you that that is a tough act to follow. Those ladies were truly inspiring and I was proud to sit in and listen to them as well. As the chairwoman mentioned, we did wanna spend a little bit of time briefing you today. But first off, I wanna thank all of you for your involvement in our association.

Your colleagues across the state deeply appreciate your collaboration with the other 14 counties. It creates a strong partnership where we all work together to promote good government. And I just wanna thank you all for your involvement in that regard and yours as well, miss Pikorsky. And I wanna extend my appreciation, madam chair, for you stepping up to serve on our executive committee and our legislative policy committee. Deeply appreciate the extra time.

And I wanna commend Michelle Heinemann and Danny DeHoe. Your intergovernmental team is fantastic, and we are grateful to work with them to support your interest as well. So we're proud to be part of the Maricopa County team and I'm grateful for this opportunity to brief you. The slide deck that I provided for you walks through a couple of things. These are items that we've been talking about at our board meetings, our LPC meetings, and our managers roundtable where we're looking at state and county and municipal revenue performance, key expenditure items that are on the table, and then trying to forecast issues that counties are gonna have to pay attention to going forward into the next fiscal year and beyond.

And so that's the intent of this slide deck and I'll just briefly walk you through it and I'd of course welcome any questions. The first slide just really highlights county major revenue growth. And the fact is that counties as a local government lag the revenue performance of the state and the municipalities. A big part of that is because counties do not receive income tax sharing. The state relies heavily on income taxes and sees the dynamics associated with that.

Municipalities receive some of the income tax sharing as well. And on this chart, what you see in the state general fund portion is you can see the significant increase at which point the state reduced to a flat tax, the income taxes, and you can see the rebound. And since the municipalities lag in their distributions from the state income tax, you can see when that rolled on to the municipalities. The municipalities of course are now looking at the reduction in the residential rental tax and so they're managing to that. But nonetheless, the performance of the state and the municipalities is much more robust than the counties.

Some of the county revenue performance is due to policy choices. This board and other boards have worked diligently to keep property taxes below the levy limit. But it's also reflective of the various restrictions that are on your revenues generally. And you can see that a little bit more in the next chart. The counties have the fewest revenues available to them.

They are property tax reliant. They do not receive urban revenue sharing, which is income tax sharing. And you know better than anybody that to access the sales tax, you have to go to the legislature, ask for authorization, and then go to the voters and ask for approval. And so revenue toggles are not readily flexed at this the county level the way they may be in some other jurisdictions. And that makes us very susceptible to various cost drivers that may come into county operations.

The next chart shows you that current and next year growth are moderating. And you can see two things about the income tax here. One is the projected individual income tax growth including tax conformity, which is the adjusting to the federal tax reductions and then without it. And you can see that the legislature will be adjusting its income tax revenues going forward. We will be seeing moderation on the sales tax side.

The property tax piece here is the growth of the base. It's not the growth of property tax collections. This is a 10% increase in the growth of the base over time. I compiled some quotes from the recent finance advisory committee. This is where the legislature asked economists about what their forecast of the economy is.

And the bottom line is that there's a lot of uncertainty going forward. Job growth and job hiring has been slowing. There's forecast risk associated with the conflict in The Middle East. Consumer sentiment is decreasing. And the JLBC staff was starting to present the possibility of a stagflation environment.

Now, you probably remember as I do from my youth, a stagflation environment in the late seventies. And that's a moment when economic activity is damped down, but you're seeing inflation go up. And so people are squeezed in that kind of environment. So the forecasters were really indicating to the legislature that they need to be very cautious as they go forward in terms of revenues and expected collections. Now, I wanted to talk a little bit about cost drivers.

We often talk about how counties are payers, not policymakers into two major functions of government. One is the state's court system. In many other states, there are more contributions from the state government to fund the judiciary. Here in Arizona, they rely heavily on state contributions to fund the state's court system. The second key component is the healthcare system.

Counties pay large amounts into the long term care system. If we sum up the courts and the long term care system, that consumes about 80% of a county's property tax rate. It's significant. It's 18% of your budget And pressures associated with those cost drivers are things that all counties have to try to deal with in any given fiscal year. I did highlight just for relative terms a few things here.

Over the last ten years, long term care costs have grown by 92% here in Maricopa County. That's significant. That if we if we were to do things in relative terms, the impact of the long term care system on your budget is like the state having a financial burden of $3,200,000,000. The actual burden of the long term of the health care system on the state budget is $2,900,000,000. So the burden you're feeling is more than what the state would feel.

It's significant and we watch this a lot. We are concerned about the trajectory here because just with the changing demographics society, it's logical to think that there will be upward pressure on the long term care system. So we are anticipating that we will see demographic pressures there. What we have been seeing are costs increase associated with serving the population. A lot of the growth of late has been related to those costs increase.

When we think about the system adjusting to HR one and the reduction of Medicaid resources coming into the state's hospital system, it's logical to think that there will be some pressures that could affect the state and how they toggle payments to providers for health care, long term care, and things like that. So we'll be watching that going forward as well. I tried to sum up for you here some policy instability, financial exposure, things that we're looking at. I mentioned earlier about the judicial branch. The legislature is able to make policy choices related to the judicial branch that that fall on the counties.

Largely, that's due to revenues that may be in the system, fines, fees, things like that, or salaries for the judiciary. We have no position on those salary increases per se, but the fact is is that when the legislature makes a policy choice to to increase judicial salaries by a dollar, they're actually increasing it by 3 and a half dollars because two and a half dollars is borne by the county taxpayer. And so one of the things we've been advocating for is for the state to take over more of the growth in the judicial salary space because it would promote transparency and also be more akin to what we're seeing in other states where they're paying for that function of government. We're also paying a lot of attention to policy instability in the pension area. And supervisor Lesko, you lived this at the capital in the reform era.

Counties paid massively to stabilize the system after it was reformed, and those investments were investments that could have been used for other investments in public safety, but they had to pay off debt. As the institutional knowledge gets farther and farther in the rearview mirror, more and more we are seeing stakeholders ask lawmakers to make toggles to those pension reforms. And I will tell you, it's always well intended, but the way we got into the last situation was the sum of good intentions over time that had very negative consequences. So we, working with you and other partners, feel it's very important to work with lawmakers on being the institutional knowledge around the pension system. I also put here just how state budget pressures flow downhill.

It's just the nature of the system. Counties are political subdivisions of the state. When the state gets a cough, the counties can get a severe cold. There is the ability of shifting costs down to the local level. We saw it dramatically during the great recession.

We worked diligently to undo a lot of those cost shifts and right size government again. But there are still residual cost shifts that Maricopa County taxpayers are paying in the current state budget that we're working on. As the state tries to figure out both how to onboard the policies associated with HR one, prioritizing tax conformity, looking at how it'll affect the healthcare system, looking at how it'll affect the supplemental nutrition assistance program. They're gonna have to figure out how to make that work within their budget and that can put pressure on shifting cost to local governments. So we're trying to monitor what that might look like.

And then finally, I wanted to just highlight tax policy. The state has historically had a very small property tax rate and they no longer have a property tax rate, a levy. But they do make policy changes related to the property tax and it's very politically salient for them to to dialogue around that. We are property tax reliant and so changes to the assessment ratios, changes personal property tax, other changes going forward can directly affect your property tax base and we need to be at the table as they're looking at that. We've also seen recently, and I think this will continue, legislative efforts to reduce sales taxes in aggregate.

And often that can mean reducing state sales taxes, which means state shared sales taxes. Our position has always been very much, if that's the state's desire, we would acknowledge that. But you have to look at the expenditure side of the equation. We would proudly move expenditures off the county property tax base to another revenue source or the state general fund and relieve the tax payer here at the local level. So what happens politically at the state is they're desirous to reduce taxes that affect revenues here, but there's not a similar conversation about reducing the cost drivers associated with that. And so that's something we'll be monitoring going forward as well.

Madam chair.

Supervisor Gavin.

If I could just stop you there for a brief question. Another thing I've seen in other states, especially in Florida, is this push to end property taxes. I've seen governor Desant to say, well, once you've paid for your home or your house, it's really unfair that the government continues to assess property tax on you as well. And I think there's sort of like this burgeoning movement around the country to discuss that. And I have seen a couple of legislators here in Arizona discuss that as well. So, on the flip side, what would be the implications if that basically took root here? Yeah. Thank you, madam chair.

Excellent question, supervisor, and that is very pronounced. We built a lot of tools in the off season to help educate legislators about what that could look like. Because the simple fact of the matter is there are billions of dollars that are on the property tax. And historically, that was viewed more as a transparent nexus to public value. You paid property taxes for schools in your neighborhood, public safety in your neighborhood, things like that.

But more and more, it's become framed as something that is not about how it's supporting your community and they want to remove that. There is no path on income taxes or sales taxes to make up for what would be lost on the property tax side. Our lawmakers should take a transparent look at the fact that Arizona has the forty eighth lowest property tax burden in the country. And that's because of a history of consumer protections, taxpayer protections that work. Those don't exist in other states and so you'll see some significant increases there, but I think our lawmakers should be proud of that and they should educate the public accordingly.

And just finally, I wanted to flag just where we are in the process. As you know, the state is still in session. And so, we are working with your intergovernmental team to identify what may occur in the state's final budget package as well as bills. Very interestingly, there were more than 2,000 bills introduced this session, which is more than we've ever seen. But thankfully, it doesn't mean that a similar amount of bills are making it through the process.

There's about two forty seven that are still alive. Some of those affect your operations, some of those affect your resources. Most of the very significant resource items have been eliminated and that's because of the good work of your intergovernmental team and our partnership together. But we are still very vigilant because every year, there are little shocks that work their way into the final budget or into the final bills that can have a direct effect on your resources. When they do their budget late into June, it can be pretty significant and a and a shock when those become uncovered.

So our pledge is to be vigilant and to continue to work in your interest as the legislature winds itself down. And with that, madam chairman and members, that's my presentation, but I'd be happy to answer any questions.

Thank you. Are there other questions from board members? Supervisor Musko.

Madam chair, I don't have a question, but good job. I too have known you for years. You're always very calm. By the way, I don't know you look exactly the same. I don't know how you don't age. But you don't age. It is. When you look the same, you do a good job. Thank you.

Thank you, supervisor.

Supervisor Galvin.

Madam chair, thank you. I guess I have an open ended question here, and I'm not looking for you to throw a bouquet of roses toward us or to to look for kudos. But can you kinda give us your assessment of how Maricopa County handles its own budget? You and I had a brief conversation here beforehand where I was just talking to you how I don't think many people realize that from my perspective, Maricopa County does a terrific job in terms of budgeting. That comes from the five supervisors sitting here before you, our predecessors who are sitting at this dais before we got here, but also our staff.

As you pointed out, we have limitations in our budget. I mean, is money that is baked into the cake, so to speak, on what we have to spend. And yet at the same time, we are very careful in terms of making sure that we don't spend more than what we bring in. We do not have any general obligation debt. We boast a triple a credit rating. But can you kinda give your perspective from CSA on how you see Maricopa County handles its budget responsibilities?

Madam Chair and Supervisor, I'm happy to, and I'll come more from a constituent lens. I live here too, and I'm very proud of how this county operates. We look at similarly sized counties across the country. We look at their expenditures per capita, their tax burden, and this county, I believe, has really leveraged the economies of scale and the efficiency of serving in a large metropolitan region. And part of the conversation we were having earlier was that doesn't get cheaper if it's balkanized, it gets more expensive.

And so this county has diligently kept its property tax rates in a very favorable way. It's very efficient in how it delivers services and partnering with municipalities, and I don't think there's a similarly sized county that rates as efficient and as low a tax burden as Maricopa County does when we've looked at it out there. And we did a lot of analysis on this when there were conversations about splitting the county into additional counties or what have you, and we definitely concluded that economies of scale are a real thing here, as is efficiency and service deployment.

Thank you. Thank you, madam chair.

Supervisor Stewart?

Thank you. And thank you so much for this presentation. It's, you know, you go through it and try to capture all of in in one fifteen, twenty minute presentation. It's challenging. I am curious about inflation as it relates to the revenue growth. Is that the direct result of the revenue growth? And then I'm seeing some lowering pressure on home prices, rents, things like starting to come down. Are you guys factoring that into the overall revenue model and what you see in a projection? And and I think a follow-up to that is, in 2008 and 2007 when property taxes crashed, I'm just kinda curious and maybe somebody might be able to help. What did the county do in that situation?

I mean, revenues were probably down 30% with much of these programs statutorily required. And I tell people all the time, this is a we're poor. Like, we are we are a lean organization almost to a fault. And it just concerns me some of these statutorily required items may be may struggle with property tax and properties lowering in value.

Madam chair and supervisor, very good questions and more detailed than I'm able to do justice to, but a couple of things that I'll share. When we go back to the great recession, I remember going into that, one of the comments made to me was the counties will find a way to manage through this. This is before we knew the depths of it. It really depends what the state chooses to do the counties. And what we saw were policy choices that the state really had very little very little avenues to go to.

They had to raise taxes, they had to cut budgets, they had to do all the things. And that meant shifting about $500,000,000 of state expenses to the county level. That created a severe multi year drag on the counties that took years to come out of. It affected hiring decisions, Capital was something that I saw suspended significantly for a long period of time. And then when the state started feeling wealthy again, when we were watching them start to talk about, you know, more robust budgets, we were still stuck in a in a period trying to recover.

It took the counties a longer period to come out of that. So that's one of the concerns I have with how these things work. In terms of the revenue projections, your questions are very good. We're leaning on the revenue projections coming out of JLBC and the economists that they're utilizing. And I'd have to peel that back a little bit more to look at the housing component for you. I'd be happy to do that, but I don't have an answer and I don't wanna speculate.

Well, I appreciate that, sir. And and and thank you. We'll we'll circle up with one another and know, I think it's gonna be important for at least I'll speak for me to speak with my legislators to keep their fingers out of our our piggyback a little bit more. I know supervisor Lesko was very clear at a meeting we had Capitol recently about, hey, could you just leave us alone for a second? But I think there's some truth to that. And so we understand we're we're a ward of the state, but we can certainly lobby internally for protecting our revenues so we provide the best service. Yes, sir. Thank you.

You. You're here.

And you don't get to go because I have some questions.

Yes, ma'am.

A lot of times my really smart colleagues ask them, but the ones they didn't ask, I'm gonna ask. So in terms of the 500,000,000 in cost shifts you referenced, how much if you can be Maricopa County specific, that'd be great. But how much has been mitigated or taken back by the state? We're still working under some of those cost shifts.

Yeah. Excellent question. So it took us several years to work back the agency toggles which were payments to state agencies. There remains one agency that this county alone is continuing to pay for the State Department of Juvenile Corrections. The best we were able to do was to get a sunset of that fee and I believe beginning in fiscal year twenty nine.

That's ten years that this county has been paying for state obligation and that's pretty pretty dramatic. What we never got back and and you can't credibly ask for it, is repayment for the lost Herf revenues or the lost resources or what have you. They're just gone. And so it was really about getting policies readjusted. Now there are lots of things in the court system, smaller items that I can't quantify either where we were getting support on post conviction capital relief or other things like that that have moved off the table as well. But the big picture agency shifts with the exception of the Department of Juvenile Corrections, we were able to get undone. But it took years to do that. It took years to

do it.

Yeah. And again, the lost revenues, I being on the board of CSA and also LPC I hear particularly the small counties grieving the loss of her funds because there's so many road improvements that are building up that it's been very difficult. So in terms of I I was in the legislature when we passed Wayfair. And that resulted in a big bump of sales tax. And I guess what I'm asking is, has that evened out and where where we are?

Has it dropped? What I'm concerned about is we may in the past have relied too much on the growth in sales tax in determining our property tax rates and cuts. And that kind of puts me in a position of saying, I like cutting property taxes. We need to do that. We don't want to assess more than is needed.

And our fiscal our fiscal position is use it up, wear it out, make it do, do without, we're lean. But do you have any information about that? Because if you look at this page, the revenue performance, the second slide, the state took a huge bump. And I believe state shared TPT is a big part of our revenues.

Yes, ma'am.

You can summarize and generalize all to your heart's content.

So there there's two points that I'd make to that. One is that we saw uncharacteristic sales tax performance over the last several years. You're starting to go back to a more normal trajectory that will be in the three ish to 4% range. What you were pointing to was unique where we saw almost double digit state shared sales taxes. When it comes to Wayfair, that was enacted exactly the right time because it was before COVID.

But when we calculate that our alt tax growth exceeds the amount of revenues that counties have collected due to the Wayfair policy. And so had that not got in, it would have been a significant challenge. But the Wayfair collections are being readily consumed simply due to alt text growth each year. And that seems to be a consistent trend that we're seeing.

So then my question is regarding alt x. Have you all gotten to the bottom of that formula and how those costs are allocated?

So madam chair, we are we're working on that and we're doing it in two steps. The first was one of our team members identified that there was a miscalculation in the JLBC model. They have rectified that in the state budget and that will save this county more than a million dollars. And so we've worked with them on clarifying how their models put together and we are reaching out to the governor's office and to access to lift the hood a little bit more to get greater clarity on how this all looks. So it's an ongoing discovery process that's a priority for us. Many other counties are feeling it similarly.

It's kind of below the line calculations. It's not exactly transparent. And I understand our population has increased, but the costs have increased enormously. Do you have anything to add, Madam County Manager?

No, chair. I think you hit it on the head and and what what Craig said is accurate. And that's a real concern for us moving forward. Okay. And then

I we've been talking about a lot of pension reform ideas that are going on and we are in a fortunate position in terms of our pensions. But there are at least two counties that I've heard speak up who have bonded to pay off their pension indebtedness. I your ears probably burn on Friday morning because I talk about vice chair Lesko and her work in that arena and I thank you for going back down to continue that work. But as you said, so diplomatically, there's no shortage of good ideas, but the ramifications are stunning. And that concludes my questions.

Do you have any closing comments mister Sullivan or fellow board members?

Madam chair and members I just wanna thank you again for your partnership in the association. And if there's anything we can ever do for any of you, please don't hesitate to call. Thank you.

And thank you very much. And board members, I appreciate your taking this presentation to heart. Thank you, mister Sullivan.

Thank you.

We will now recess the informal meeting and I will ask for a motion to go into executive session, madam vice chair.

Madam chair, I move that we go into executive session.

Thank you. Is there a second?

Second.

It's been moved and seconded. All those in favor will say aye. Aye. Aye. Any opposed? K. This informal meeting is recessed and we will we will then go to the Sullivan Room for exact session.