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County consultant: uneven national slowdown, health-care job growth and water risks complicate Maricopa's outlook
Summary
Consultant Jim Rounds told the Maricopa County Board of Supervisors that while the county's fiscal position remains relatively stable, national data volatility, health-care-driven employment growth, long-term water uncertainty and workforce gaps could strain state and local revenues in the years ahead.
Jim Rounds, an economist with Rounds Consulting Group, told the Maricopa County Board of Supervisors on May 18 that Maricopa remains "more stable than most government entities," but that national data volatility, inflation and sectoral job shifts complicate short-term forecasting.
"We're looking at a different kind of slowdown than you would normally see," Rounds said, citing monthly revisions in national jobs reports and urging caution about single-month data points. He noted April's national employment gain of 115,000 as an example of figures that can be revised up or down when the economy is near an inflection point.
Rounds flagged an anomaly in recent hires: a large share of growth has been in health-care employment. "A lot of our growth has been driven by health care employment," he said, and added that this pattern "doesn't make a lot of sense" to some analysts and raises questions about longer-term Medicaid exposure and reporting changes.
The consultant estimated large-scale fiscal effects from differing growth patterns. "If the state did that, they'd have $2,200,000,000 more in the bank right now," he said when illustrating how federal and state spending shifts can alter baseline revenues. Separately, in response to a question about longer-term workforce risks, Rounds said the fiscal cost of an emerging supply-demand gap could total about $8,000,000,000 in state and local tax collections over the next decade if the county and state do not address workforce imbalances.
Board members pressed Rounds on related local constraints. Vice Chair Lesko asked whether large retrospective adjustments in jobs numbers are normal; Rounds answered that sampling and response rates can generate both upward and downward revisions and that inflection periods are especially noisy. Chair Brophy McGee and Supervisor Galvin asked whether Arizona has been adding higher-wage jobs; Rounds said per-capita personal income has improved over the past 15 years and that the state is adding higher-wage roles, though not yet at the national average.
On housing, Rounds called affordability "an economic development constraint," saying employers now question whether workers can live near new plants and that city-level zoning and financing issues limit immediate fixes. On water, Rounds said he's frustrated by a lack of consistent long-range supply modeling: "If we have a 100-year supply... there's gotta be some math to it. Why can't there be a curve?" He described a draft analysis on the Buckeye region that was resolved before publication and said staff will receive more detail when available.
Rounds recommended continuing conservative forecasting and maintaining contingency reserves. "We have to monitor labor and inflation data," he said, and urged the board to prioritize budget choices that preserve flexibility.
The presentation concluded with no formal action; Rounds said the consulting team will monitor data monthly and notify staff promptly if unusual reports require follow-up.
