On Tuesday, the Board of Supervisors discussed the county’s budget for the upcoming fiscal year, including how they will address an estimated $57.5 million budget deficit.
A deficit arises when expenditures exceed revenue. The forecasted fund imbalance in the 2027-28 fiscal year exceeds last year’s deficit — which has now been balanced — by about $8 million.
One concern for board members in Tuesday’s meeting was the county’s “cost shift” policy, which takes excess costs that the state distributes to individual counties and adds them directly to property tax rates. Pima County defines cost shifts as “costs that would normally be paid for by the state but get transferred to counties by the Legislature and Governor.”
Unlike other Arizona counties, Pima County directly adds those costs to property tax rates. They claim that helps residents understand exactly where the extra costs come from.
Cost shift rates are expected to roughly double in the next fiscal year, up to $.06 per $100 of assessed property value. That increase, combined with expected increases in other factors that contribute to property tax rates, means the county may need to request an increase to its property tax levy limit.
Supervisor Rex Scott said that such a request would be asking much of Pima County residents after the passage of Proposition 425 last week, which increased the county’s expenditure limit by $610 million, and an anticipated bond request in 2027.
“I’m very concerned, with the fact that we have gone to voters in 2026 with a request for an increase in the county expenditure limit. Thank goodness they approved it,” Scott said.
According to Scott and County Administrator Jan Lesher, cost shifts make up for about 25% of primary property tax rates, and have been connected to all overall increases to property tax rates in recent years.
Despite the amount of attention they received at Tuesday’s meeting, cost shifts account for a small percentage of property tax rates. Other contributors within the Board of Supervisors’ control include taxes for road upgrades and affordable housing.
Other ideas pitched at the meeting included lowering the county’s reserve rate from 17% to 15%. The reserve rate is the minimum amount the county must keep in its savings.
