Tucson city manager: Being part of RTA Next could be 'fiscally irresponsible; can't in good conscience recommend'

Tucson City Manager Mike Ortega has a message for the rest of the Regional Transportation Authority partners in what he’s now telling the City Council:

“RTA, we gotta talk. We’ve been working at this relationship ahead of a 20-year-extension of the half-cent sales tax to pay for regional transportation projects. We’ve been telling you, we’re not happy. But if things don’t change in a hurry, we’re taking the kids and moving in with our parents.”

Ortega sent a memo to the mayor and City Council at close of business Friday, strongly suggesting abandoning the second round of RTA funding if the city doesn’t get the sense that it’s getting as much as it is giving to the relationship. At the same time, Tucson needs to figure out what it’s willing to give to get.

 The key parts, leaving aside the nitty-gritty of the financial projections for a moment:

I may not be able to in good conscience recommend the city of Tucson continue to participate in RTA Next. In essence, by participating in RTA Next, the city would basically give up approximately $640 (million) of revenue over the next 20 years or approximately $32 (million) annually.

***

In the past, the city of Tucson has been challenged to demonstrate the regional value of improvements and programs important to city residents such as capital maintenance, modernization of corridors, and transit to name a few. Based on these new numbers, I suspect it will be important for the other regional partners to demonstrate and convince the city of Tucson of how exactly their projects benefit the region, but more specifically the city of Tucson residents.

I have been a proponent of a regional approach to solving the challenges
we all face including transportation and I still believe in a broad
regional approach as I continue to see value in it; however, when you
simply look at the numbers, it would be fiscally irresponsible for us to
leave $32 (million) on the table every year in the name of a regional
approach.

Nine Tucson-area jurisdictions – including the big city itself – make up the RTA’s board and a preliminary estimate of who gets what in a new plan leaves the city with just over $1 billion in projects. The total revenue of a 20-year, half-cent sales tax stands now at $2.3 billion.

Ortega stated in his memo that the city should  be doing better than that. Part of the problem is that the revenue expectations are too low. The city has been working with the University of Arizona’s Eller College of Management to divine sales tax revenues on its own voter-approved sales tax initiatives. The new estimates project 20 years of city revenue on a half-penny per dollar tax at $1.65 billion. Simple math says 62 percent should come back at $2.6 billion in total anticipated revenues.

Document: ‘Fiscally irresponsible’: Ortega memo on RTA

Two big takeaways there: 1) the size of the total pie will be larger than what the RTA board is projecting and 2) the city would be leaving $30-something million on the table every year based on what’s on the table now. That’s a sacrifice Ortega says the city may not want to make.

I’m going to get to the downside of leaving the RTA in a second but first, $32 million a year is a lot of money to relinquish.

So now Ortega wants a sit-down with the RTA, the kind I’ve been advocating since last summer. The crisis stirring between the RTA and the city has much of the feel of a marriage on the brink. The city is the spouse saying “my needs aren’t being met” and the rest of the RTA just thinks the city is being silly and here are the 24 reasons everything is just fine if the city would just take a chill pill and if there is a problem, it’s totally you.

Some counseling is in order.

A cry for attention

The original sin here is that the city has the same number of votes on the board as Sahuarita, even though Tucson has more than 10 times the population and generates two-thirds of the transportation plan’s revenue. The Council wasn’t happy but couldn’t do much because the state Legislature would have had to approve a weighted voting system and the Republican Legislature wasn’t going to help the city step on ruby-red Marana.

The RTA kinda tried to mitigate this asymmetry by giving Tucson more power at the staff level, increasing their level during the input phase if the city only got one of nine votes during the final approval or output phase.

That kept Tucson playing along through 2023. However, the city still feels like it’s getting hosed. Under the two-thirds-of-revenue model, the city should be getting just under $1.6 billion of the $2.3 billion total pie. 

My argument is that if an RTA election were held without the city government’s support, prospects for passage would be dicey at best. The RTA needs Tucson’s more (matter of scale) tax-friendly voters to approve the plan. It’s no overhead slam with the city.

That’s why I’ve been saying that a scheduled sales tax election is a warning shot against the RTA. Ortega’s memo is a blazing broadside.

Do they have your attention now?

“What we’ve been talking about for years now is a plan that would resonates with Tucson voters,” Ortega told me.  “The mayor and Council are focusing on residents making sure investment is coming back to them.”

Estimates and death angels

Pima County Supervisor Rex Scott sits on the RTA board and sounded somewhat shocked to hear Ortega was talking seriously about urging the Council to bolt. Scott said that Mayor Regina Romero has been adamant about remaining with the RTA.

“I take Mayor Romero at her word,” Scott said. The board has a three-year streak of unanimous votes and the last time there was a split, the vote came down 6-2 in favor of including funding road work along North First Avenue in Tucson.

“It looks to me like nine people are trying to come together,” Scott said.

Scott is saying (without being a jerk about it) that Ortega advises the Council, but he doesn’t speak for it.

It’s worth pointing out here that Scott has been acting like a facilitator for the city – not an agitator against it. And he’s greeting the Ortega’s threats with what amounts to “what the hell are you talking about?” 

Part of Scott’s job on the board is to make decisions while calculating “will this have a majority of support on the Board of Supervisors?” Romero has to do that too, regarding the Council, and it’s a bit harder for her.

Optimism guides Scott’s thinking because jealously eyeing money not spent in a given jurisdiction is what he called “a parochial approach” at the expense of the greater regional good. Romero has been acting toward that noble end.

Other Council members define the greater good differently. What’s best for the city they serve? Yes. the council is acting more parochial. They want to know “what’s in it for us?”

Each councilmember emphasizes projects being left out of the plan or that are still waiting for work to be finished from the first round of RTA spending, which is due to expire in 2026.

The 2006 RTA plan is running out of money. Back then, estimates came back assuring the RTA would have $2.1 billion to spend. The Great Recession put a thumping on the revenue side and the money came in $400 million short, leaving a bunch of city projects unfunded.

So this time around, the RTA planners and the Eller College cranked out safe, miserly assumptions that $2.3 billion would be generated. That’s almost exactly what was projected to be generated from 2006 to 2026. The recession hit in 2007 and sales tax revenues fell into a different dimension. They didn’t recover until 2017.

A once-in-a-lifetime financial crash landed squarely on Arizona. Our state proved to be one of the five or six impact craters of the global financial planet killers that destroyed the world economy. So this time the RTA Board is projecting Armageddon into its plans.

Let’s say that doesn’t happen. Eller’s new estimates suggest it won’t. The countywide tax could generate a billion more than projected. Playing it s safe comes at a cost, too, by creating an artificial scarcity and leaving the different jurisdiction to fight over the paltry scraps when abundance could follow.

Ortega has a pretty interesting plan for this: Make the project list scalable up from the worst-case scenario. “Here’s what we can do with $2.3 billion, here’s what we can do with $100 million, $200 million or $500 million more.”

I can hear the pearl clutching “That’s too complicated! You gotta keep it simple because voters can’t read that fast without their lips moving to understand moving numbers.”

Please. If made to focus for 30 seconds, voters aren’t stupid. They can comprehend that the sales tax over 20 years might generate a range of revenues and the RTA would spend accordingly. If the people are stupid, it’s because we’ve dumbed down expectations. Treating people like they can’t be trusted to understand the intricacies of a knife and a fork, does make the jobs of governing and, frankly reporting, easier.  

If the Seventh Seal is opened and the economic Angel of Death ravages the land, the current projections will work. If the next Great Recession doesn’t strike until 2075, then the RTA would have extra scratch to keep Tucson on board.

Costs of a solo career

There are problems with Tucson going it alone.

There’s Sun Tran funding and the prospect of losing cash from surrounding communities. Regionalism is the best way to plan how to move people around because daily commutes can cross multiple jurisdictions. 

If we care about climate change, keeping traffic from idling on overcrowded streets in Marana and Oro Valley would be important, too.

Also, Tucson doesn’t do better if Marana does worse. The whole community is in it together.

Then there’s the bad blood that would be created by Tucson seeming to take its ball and stay home.

Other regional planning efforts could suffer if inter-jurisdictional war erupts between Tucson and surrounding communities.

“The RTA Board has already unanimously voted on the revenue projections for the new 20-year plan,” Farhad Moghimi, the RTA’s executive director, told the Sentinel as he reacted to Ortega’s memo. 

“The draft plan recommended by the Citizens Advisory Committee appears to be a fair distribution of projects across the region,” said Moghimi. “The board is fully committed to ensure a balanced regional distribution of benefits. Otherwise, in my opinion, the voters won’t support any proposal that is not a fair distribution of benefits.”

I harken back to days of yore to remind people why the RTA came about in the first place. Tucson’s luck with voters had gone cold. No transportation plan could pass ballot muster. First there was a staff-driven city version that bombed at the polls. Then the citizens who lead the opposition came up with their own plan and put that to the public, who said no again.

The Council then did what all the key players did facing a no-win situation in Tucson. They flashed “The Chuck Signal.” 

Former County Administrator Chuck Huckelberry put together the regional planning initiative with the help of Marana, Oro Valley, Sahuarita, South Tucson, the Pascua Yaqui Tribe, Tohono O’odham Nation and the county. With a little bit of lift from the Legislature, the RTA was born. Voters approved. Rejoicing ensued.

Now the city is on a roll, passing a series of public initiatives while the county’s fortunes have reversed. It’s hard not to ascribe some of that to Ortega’s leadership. Some things are just working right in municipal government; it’s got a good process.

However, all glory is fleeting. Fortunes at the polls could reverse. Maybe people want a regional approach and going it alone will be seen as the hubris that pops the city’s bubble. Who knows?

Tucson provides the bulk of the sales tax revenues. Fine. It also has the most at stake and should assume the mantle of leadership.

Ortega and even Council members know that a regional approach is a better approach. What is the price they are willing to pay for that community-wide effort? Is “losing” $30 million per year worth strengthening the whole system? Is it $10 million? Leadership isn’t the science of accumulation. It’s sometimes the art of sacrifice.  

Yes, the city and other RTA governments must sit down and talk turkey. What do you have to have? What can’t you do? Get a deal done. And that’s basically what Ortega says needs to be done right now.

Not a bad idea. Wish I’d thought of it.