Tucson's RTA revenue hopes dashed, Council must consider Plan B

An offer has been presented. Should the Tucson City Council choose to remain a part of the Regional Transportation Authority’s next 20-year sales tax round (and should voters approve it in the first place), the city will receive 100 percent of the money collected above and beyond anticipated revenues.

But wait. There’s more. The projections are based on the most pessimistic figures provided by the University of Arizona’s Eller College of Management. This offer and more is up for Council discussion during their Tuesday study session. 

The city of Tucson has been fretting since the start of the RTA redux process because of fears that it would not get its fair share. The planned projects so far would send to the city a little more than 50 percent of revenues from a county-wide half-cent sales tax. Problem: More than 60 percent of those dollars would be generated inside Tucson city limits.

So if the leaders of the big city decided to go it alone with their own half-cent sales tax, it could keep about $600 million more. Magically, the Council has scheduled a ballot question this summer on a sales tax for undeclared reasons. Could be transit. Could be public safety. 

Call it a subtle threat to the other eight jurisdictions that make up the RTA. Give Tucson what it wants or maybe they’ll hold their own election and then pull out of the regional program.

What’s the city’s bottom line? No one knows. I don’t even think the city knows other than “more.”

New Eller estimates were supposed to provide them that option but those figures didn’t pan out like the Council had hoped. Every now and then hopes for numbers fall apart (shameless Bonnie Tyler eclipse reference). 

Revised projected revenues increased from $2.9 billion in revenues to $3.1 billion in actual dollars. But wait. There’s more, still.

Those are “nominal dollars.” So the actual increase is from $2.3 billion to close to $2.4 billion in “inflation-adjusted” dollars.

City Manager Mike Ortega and yours truly had been operating under the assumption that the projected revenues worked like every other sales tax plan or bond plan. They are always managed in actual dollars collected, without shifting things about in adjusted dollars. 

Think about federal spending. Washington lays it out in 10-year projections and none of them are inflation-adjusted. So people in Washington get to say “we’ve increased spending for Program X” when in fact the money buys less.

For a moment, the projections looked like they jumped $800 million, from $2.3 billion to $3.1 billion. Nope. That would have been inflation-adjusted numbers to actual dollars collected. It’s an apples-to-velociraptors thing. The increase was actually $150 million. City administrators didn’t realize the original estimates were pre-adjusted for inflation because dollars for massive projects are never crunched down for inflation. 

The whole affair reminds me of how a Mars rover crashed into the red planet because engineers forgot to convert feet into meters. 

RTA’s administrative leadership and the folks at the city suffered a massive communication breakdown. Hell, just two weeks ago I talked to Farhad Moghimi, the Pima Association of Governments executive director and dude who runs the RTA and told him I was confused about the numbers. How could RTA Next raise $2.3 billion from 2026 to 2046, when RTA “first” was expected to raise $2.2 billion from 2006 to 2026?

Moghimi never mentioned inflation adjustments.

Don’t get me wrong. Working in inflation-adjusted dollars makes sense when asking “how much is this really gonna buy us?” In fact, I can argue it’s the smarter way to go.  Moghimi wasn’t trying to pull a fast one (even if in my confused state I thought he may have been). It was the Eller College who converted the nominal dollars to real dollars to reflect the final estimate because they are economists and that’s how economists work.

So, sorry, Farhad. My bad.

Now, I must point out that economists made the conversion for economic purposes. Politically, a bit of a problem presents itself. RTA opponents can say the real number is not what is being sold to the public. “They’re lips are saying the tax will raise $2.5 billion when the actual number is more like $3.6 billion. What else do they not want us to know?”

So the RTA is back to the origins. How does Tucson get more money without taking from someone else?

Give them all the money that comes in above and beyond the pessimistic projections. That’s how. 

The baseline projection – Eller’s more likely assumptions for something like $450 million more than the pessimistic guesstimate during the 20-year time frame. 

During a meeting of the Technical Management Committee, traffic and transit staffers scattered among the jurisdictions, City Transportation Director Sam Credio said he couldn’t support an offer of magical money. 

Credio has a point. However, RTA planners feel snakebit from estimates for the current round of funding failing to deliver 2006 projections. The Great Recession hit the year after the current RTA started collecting funds and revenues cratered from the jump.

Moving ahead, something closer to the baseline is much more likely and that could give Tucson a big windfall at the end of RTA Next. 

So the City Council is stuck with a gamble or two: They can shoot some dice and hope city voters in July approve a Tucson-only transportation plan, but if it fails, the city has a weaker bargaining position. Or they can go long on the region’s economy and hope the sales tax generates a whole lot more money than pessimists project and all that money ends up in Tucson.

Find out on the next episode…

Making it all add up

The City Council will also get a look at the upcoming budget and things look … meh.

Ortega’s proposed budget is kind of a disappointing non-event because there’s not much in the way of changes. The city manager would probably say “exactly, that’s the point.” Rough waters are ahead but Tucson is sorta kinda in a place to weather the storm.

Local tax revenues are projected to come in $5 million above projections. Expenses are coming in higher too. Tucson police are spending $9 million more than expected on overtime, for instance.

The biggest blow looks like it will arrive from, of course, Phoenix.

State-shared sales tax revenues are expected to drop by $27 million in fiscal year 2025. The state went to a flat income tax and provided universal vouchers to any family that wants to send their kid to a private or charter school. Yeah, there are budget problems in the state because handing money to the well-off costs just as much as giving it to the poor. Actually, it’s more expensive because the poor don’t have much to begin with.

So the city has to figure out how to sustain the raises it handed out after the pandemic and if it wants to maintain free transit. All of this comes with a cost.

Now, none of this is a problem immediately but by 2026, the Council is going to have to make some decisions.

Meanwhile, they will continue to discuss how to keep Sun Tran and other transit services free to the public.

The Council suspended fares during the pandemic and had temporary federal funding to pay for it. Those funds are gone now and the city has to figure out whether to keep subsidizing transit at a cost of $60 million a year. The city budget is a story I’ll get to in a second but keeping transit free will require a new funding source. 

The city already subsidized transit to the tune of $45 million (ish) a year. 

Tucson, being (sort of) under the control of the Arizona Legislature, has limited options.

Hotel bed taxes bring in $2 million for every dollar imposed. Finding $10-15 million could require an increase of $7.50 a night. 

Then there’s the lottery. In 2011, the Legislature stopped sending lottery funding to cities for transportation services. They fixed the budget crunch in part by sticking it to local governments. Maricopa County managed to sue to get funding restored and won. The money was only returned to Maricopa County. That’s an option.

The city could pursue access agreements with businesses and other governments to keep transit free. They tried this already and Pima County, the Tucson Unified School District Governing Board and the University of Arizona all said no. 

Special taxing districts, utility fee increases and impact fees can’t be used for mass transit because state law prohibits it. Those are not options because the majority party in the Legislature for going on 60 years hates helping poor people. Argument being, helping the poor makes the poor dependent, as if the absence of money isn’t what drives dependency. 

Honestly, one of the best options might be to hold off for a year and see if the minority party can at least break even in the next election, as they just need to gain one seat in both the state Senate and House of Representatives. If that happens, local communities may have more options. It’s doable on paper. 

Climate and fee change

The Tucson Council will also get a look at a new climate plan update.

They do this every couple months and it’s not the biggest of deals but the city did get $3.8 million grant in new grant funding to provide an east-west bicycle corridor between North Oracle Road and North Columbus Road. The money will also provide low-use water fixtures in city-run housing developments.

Tucson, Pima County and the Primavera Foundation are going for a pair of U.S. Environmental Protection Agency grants that would, if received, “significantly reduce greenhouse gas emissions regionally and advance climate action at both city operations and community-wide levels.”

These grants were part of the Inflation Reduction Act, providing $5 billion to states and local governments with funds to fight climate change.

The Inflation Reduction Act was a smart bit of political branding for 2022 but had little to do with reducing inflation. It was a climate plan – the largest in the history of the world. They called it that because inflation was the number-one concern on the minds of voters. 

Now, people don’t know President Joe Biden did anything about climate change because it’s not called the Climate Change Act of 2022.

Park and recreation fees are also up for an increase and the Council will hold a public hearing Tuesday and vote on setting the new rates during its regular meeting following the study session.

The Council started the process late last year and in January approved a notice of intent to raise fees.

These are basically ramada fees. Some are going up but a few charges will be reduced. 

Currently, the prices are the same regardless of ramada size. The new plan is to charge according to how big the ramadas are.

Increases in tennis fees are on the table, as well.

The rate increases will take effect July 1.

Oh, Gaza …

The City Council will also vote on a call for a ceasefire in Gaza. 

That oughta settle it.

Israeli troops were set to invade Rafa, the last Hamas stronghold, but now that Tucson is weighing in, all the Netanyahu government’s calculus has changed.

Do it. Don’t do it. It’s fine. Whatever. Bibi Netanyahu is a prick and deserves whatever he gets. With ya, there. 

Here’s what I marvel about. One of my greatest journalistic achievements was when I recapped all the nuances of the TCE settlement in the span of 10 column inches. It was a 25-year backstory that involved all sorts of twists, turns and curves. The history of the Israeli-Palestinian crisis goes back to the Book of Exodus. The average American (who can’t be bothered to know the causes of inflation or the difference between the Espionage Act and the Presidential Records Act) can not possibly fathom the depth, detail and nuance of this conflict or downstream effects of any action.

Nobody in the government of Israel, Hamas leadership, the Palestinian Authority, the princes of Saudi Arabia nor Egypt’s military is going to keep a hotline open awaiting word of the outcome of the Tucson City Council’s action.

Deseg rolls on, new school for Vail

The Tucson Unified School District Governing Board will review – and possibly approve – plans to shift $3.5 million in desegregation funds into other parts of the budget to make way for the cost of holding onto academic intervention specialists.

Those specialists had been paid for out of coronavirus relief funds, which run out later this year.

So TUSD Superintendent Gabe Trujillo wants to move that program under the umbrella of desegregation. 

This is an option now that the district is out from under a four-decades-old U.S. District Court judge’s order mandating desegregation efforts monitored by the courts. 

The district can still collect taxes and still spend deseg tax money without that money counting toward constitutional spending limits. They just have to spend the money on populations the court order focused on and in this case, it was Latino and African American students.

Trujillo says these students benefit from interventionists. These educators immediately help students having problems. They’ll teach the quadratic equation but won’t go back to algebra’s first principals. 

Activists who have long been on the district to make the administrators follow court orders are not happy with this development and made their feelings known during public hearings about Trujillo’s proposal.

The Governing Board heard those complaints two weeks ago and kept their opinions largely to themselves as they digested the plans and oppositions.

We’ll see where it ends up.

The Vail Unified School District may be on the verge of starting construction on Rocking K Middle School.

The Arizona School Facilities Board approved $19 million for the project but the local district board must kick in $14 million to get the process rolling.

Vail voters approved the project as part of a 2018 school bond that will cover $9 million of the cost. 

Arizona’s Department of Education requires that school districts update their parent-involvement plans. The U.S. Department of Education’s Title I program also requires these plans to get federal money to help low-income students.

Vail’s plan is more of a concept to ask for strategies, guidelines and actions to get parents involved at the district level. The board is under zero obligation to change this but has to re-approve it. 

Vaya con dios, Thomas Jacobs

The Flowing Wells Unified School District Governing Board will discuss how to proceed now that 20-year incumbent Thomas Jacobs has retired from the board.

The board will not be picking a replacement. That job falls to Pima County Schools Superintendent Dustin Williams. 

The school board will also vote on changes to the district’s retention policies. District leaders met with teachers, specialists and parents to come up with ways to keep employees on board given the reality of limited resources.

Employees at Amphitheater Unified School District will no longer have to reimburse their pay for jury duty but will be precluded from taking hourly increments of sick leave. Going home ill now requires a four-hour hit to sick time.

These are part of two new policies that the Amphi board will update during Tuesday’s meeting.

Board members will also consider changes to the code of conduct. It’s done every year after getting stakeholder group suggestions. 

The district staff has yet to provide a copy of the draft the board would approve.

How do you tell a trout from a lawyer?

The Nogales City Council will vote on whether to hire Mesa law firm Pierce Coleman as its “city attorney.”

The contract is for a base rate of $15,000 month. This will be a retainer and the firm will charge $295 per hour for partners’ work, $225 per hour for associates and $125 for 60 minutes of paralegal work. 

Pierce Coleman is either a really lousy firm or they are giving the city a really good rate.

Elsewhere this week, it’s kind of quiet.

The Sahuarita Town Council will vote Monday on whether to enter into a fishing program with the Arizona Game and Fish Department.

The urban fishing deal with the state would require the town to do the public outreach and take care of Sahuarita Lake. It will also pay $20,000 a year to the state to keep the program funded.

Game and Fish will provide the rainbow trout and maintain the population.

Awesomely, McAwesome. The rainbow trout to be stocked are, of course, several notches below large mouth bass for real anglers. Still, they can be fun. Rainbow trout are tastier than bass with an egg wash and a flour dredge.