Tucson prepared for fiscal cliff deadline - Tucson News Now

Tucson prepared for fiscal cliff deadline

Posted: Updated:

While city officials will not be happy about falling off the fiscal cliff, they will be prepared if it happens.

For the past several months, city leaders have been talking about how they will be impacted if Washington's leaders fail to break the budget impasse.

"We've said for the past six months around here, we're going forward with our planning and process for our budget next year," Tucson's Mayor Jonathan Rothschild says. "But if something dramatic comes out of Washington, we're going to plan B."

That means budgets would be reconfigured and services likely adjusted to make room for cuts.

Government subsidized housing, which is getting very little attention in the Washington talks, has been a topic here.

If those cuts go into effect, it will have a ripple effect throughout the city budget.

The city is concerned about the number of people who will lose their housing and what effect that might have on other services.

"If sequestration goes into effect as proposed, we're looking at 400 people out on the streets," he says. People "who are now demanding social services they didn't need before."

If the proposed cuts, called sequester, go into effect, it will also cut the defense budget by 10%.

Tucson is considered a defense industry town. With Fort Huachuca just to the South east, Davis Monthan in the middle of the city and with Raytheon one of the country's biggest defense contractors, a cut that large will be felt.

"So if we see a scalpel approach to reductions in spending from Washington, it's going to have a disproportionate effect here in Tucson," Rothschild says.

Tucson also has a high poverty rate, the sixth highest in the nation.

If Congress doesn't reach an agreement, payroll taxes go up automatically by 2%.

While that's not a lot of money, although it will hurt some more than others, it's the fear it causes that could do some harm.

Numbers which will be released in January, will show Tucson is recovering from the Great Recession a bit better than much of the nation.

It will show a 1 1/2% drop in unemployment last year and a nearly 6% increase in sales tax revenues.

For a city where the recovery has been going in the right direction but still tenuous, it causes concern in the Mayor's office.

He believes the perception that things are not going well would be enough to make Tucsonans think twice before making some purchases.

The mayor says he has confidence that "common sense will prevail" but that's not assured.

And with Tucson sitting on the verge of a good economic recovery, anything that threatens that is cause for concern.  

One of the things that will likely not be touched is public safety, which remains the top priority for city leaders.

But with jobs increasing and revenues moving in the right direction, cuts of any kind will hurt.

"We have additional concerns because of the fact we've been reliant on government funds so long," he says.

Copyright 2012 Tucson News Now. All rights reserved.

Powered by WorldNow