Tucson citizen committee recommends regional approach to fiscal challenges.

The City of Tucson and Pima County must develop cooperative strategies for dealing with regional problems, including the consolidation of duplicative services, if Tucson is to achieve financial stabilization and community revitalization. This is the overarching conclusion of the Citizen Finance

"Without immediate action, followed by fundamental change, we see Tucson heading toward a future as a second-rate city at best and almost certain financial collapse at worst," the report states.

The 10-member committee was appointed in May 2003 by City Manager James Keene to study the city's deteriorating financial situation. Tucson's budget has declined by $79 million since fiscal year 2000, jeopardizing basic government services such as public safety, street maintenance, public libraries, and parks and recreation.

To address the immediate crisis, the committee recommended removing the rental and advertising exemptions from the business privilege tax, transferring services to enterprise operations wherever viable, increasing or implementing user fees for some services, and enacting impact fees for housing. The committee emphasized, however, that it only supports these actions if its recommendations for fundamental changes in the city's financial structure are also undertaken.

Besides evaluating and potentially consolidating some city services with county services, the committee's long-term recommendations include empowering the Pima Association of Governments as the regional transportation authority, removing the rate cap on the secondary portion of the property tax, and pursuing the annexation of some 290,000 residents living in unincorporated areas of metropolitan Tucson.

The city estimates that it loses approximately $60 million in state shared revenue each year from the income taxes paid by residents in unincorporated areas. Among the other issues that have contributed to Tucson's financial crisis are over reliance on the sales tax (43 percent of general fund revenues) and overlapping yet disjointed solutions to regional problems.

"Solutions for Our Community: "A Regional Approach to the City's Fiscal Problems" can be found online at www.ci.tucson.az.us.