Coconino County opens two‑week FY2027 budget review, managers urge caution amid revenue uncertainty

Coconino County’s Board of Supervisors opened a special two‑week session on April 20 to review the county manager’s recommended fiscal 2027 budget and long‑term financial plan.

Chair Patrice Horseman opened the meeting by thanking staff and reminding the board that “through the budget process is our quite frankly number one responsibility as a board of supervisors,” a point county staff echoed as they walked supervisors through revenue forecasts, department requests and trade‑offs.

County Manager Andy (last name not specified in transcript) and finance staff framed the discussion around two realities: the county’s heavy reliance on point‑of‑sale sales taxes—about two‑thirds of general‑fund revenue—and statutory limits on primary property‑tax growth under Arizona’s truth‑in‑taxation rules (a 2% inflationary allowance plus new construction). Finance director Siri told the board the county uses a long‑term “baseline” approach to forecast sales‑tax revenue and has set aside a $15 million stability fund, saying the goal is to preserve service continuity “in an uncertain world.”

Staff recommended a balanced FY2027 operating outlook that holds service levels steady while using one‑time resources for capital and short‑term needs. The county manager’s proposal packages about $4.4 million in one‑time general‑fund investments, $1.0 million in recurring general‑fund items, six limited‑term FTEs and three regular FTEs across general and other funds. The recommendation also includes a 5% department CPI and a staff compensation proposal of roughly 2.5% for most staff and step increases (about 4%) for law enforcement. Erica from HR presented 10‑year compensation history and showed the recommended increases would still leave most employees modestly ahead after estimated medical‑premium changes.

Pension‑management strategies were also discussed. Staff described earlier prepayment and refinancing moves that invested county funds with the Arizona State Retirement System and PSPRS; those actions reduced long‑term pension liabilities, but they also create ongoing debt‑service obligations that staff said should be paid from investment proceeds while preserving principal to maximize returns.

Supervisors asked detailed questions about vacancy savings, which finance said the county captured in FY26 by temporarily delaying hires, and about department backlogs. Staff said many department increment requests were pared back in follow‑up meetings; departments submitted roughly 30 recurring FTE requests during the request phase but the county manager recommended only five regular recurring FTEs because of long‑term revenue constraints.

The meeting closed with a multi‑hour discussion of capital and revenue strategies to address long‑term facility needs. Staff presented four broad options: (1) save‑first pay‑as‑you‑go, (2) borrow against existing revenues, (3) voter‑approved dedicated capital tax that would fund debt for specified projects, and (4) pursue new general revenue authority via legislative change and a voter ballot. Officials noted each option’s tradeoffs—speed, flexibility, legal constraints and whether additional revenue authority would be dedicated to capital only or could fund operating needs and new recurring services.

Next steps: supervisors will continue department‑level hearings through April 30 and are scheduled to consider a tentative FY2027 budget adoption on June 2 and Truth‑in‑Taxation hearings on June 23. County staff said they will return with more detailed options and impact analysis for any revenue or debt proposals supervisors want to pursue.

Why it matters: Coconino County’s combination of a low primary property‑tax base and a heavy reliance on sales taxes makes revenue more volatile than in some neighboring counties; staff and supervisors emphasized that while short‑term service continuity is achievable, recurring program expansions will be constrained without new or redirected revenue.