1. State County Partnership
Introduce yourself and share a little of your background and experience. Mention time spent lobbying/working at the legislature.
Thank Andy Tobin, legislative leadership and ASU for convening the Academy and providing an opportunity to talk with you about Arizona’s county governments.
Purpose: Fundamentally, counties implement state and federal laws at the local level. The Arizona Constitution establishes county elected officials to be responsible for implementing these mandates– a construct intended to promote local responsiveness and local accountability.
Every year, legislators review hundreds of bills that impact county operations. So, having a strong partnership between state leaders and locally elected officials is absolutely necessary to promote good public policy. Two main things we would like to share with you today:
One: We want you to know that the staff members at the County Supervisors Association and the Arizona Association of Counties are based near the Capitol to be resources for you.
Two: We would like to provide a brief introduction to what counties do, how they are organized and funded, and why they matter to your constituents.
State County Partnership
Arizona Legislative Academy
Brad Carlyon, County Attorney, Navajo County
James Jayne, Manager, Navajo County
January 5, 2017

2. Arizona’s Territorial Days
4 Territorial era counties in 1864
Mohave
Pima
Yavapai
Yuma
The now defunct Pah-Ute County split from Mohave County in 1865, but merged back in 1871.
14 Counties at Statehood in 1912
In Arizona’s territorial days, there were just four counties, Mohave, Pima, Yavapai and Yuma. The 4 counties were created in 1864 following the organization of the Arizona Territory in 1862.
The now defunct Pah-Ute County split from Mohave County in 1865, but merged back in When Arizona achieved statehood on February 14, 1912, Arizona had 14 of it’s current 15 counties.

3. Arizona Counties 15 counties in Arizona
All counties have a 3 or 5 member board
There are more than 300 County Elected Officials in Arizona, including 61 County Supervisors
The fifteenth county, La Paz County, was created in 1983, splitting off from Yuma County.
So La Paz County has the distinction of being Arizona’s youngest and oldest county…because the median age in La Paz County is 54 years old (Maricopa is 34 years old)
Population and Land Mass
County population ranges from Greenlee County with 10,433 residents to Maricopa County with 4,137,076 residents (July Poptac)---4th most populous county in the US.
The smallest county by landmass is Santa Cruz with 1,238 square miles and the largest by landmass is Coconino with 18,661 square miles—2nd largest in the continental US (not counting Alaska).

4. U.S. County Map
Contrast Arizona’s very large counties with the relatively smaller counties to the east.
Early counties in the U.S. were designed so that citizens could reach the county seat by horseback within one day. Texas has the most counties in the U.S. with 254.
Arizona’s larger counties provide some regional efficiencies but also some service delivery challenges due to the expansive service areas.
3,033 counties in the U.S.
Louisiana - Parishes
Alaska - Boroughs
Texas has the most counties with 254
Delaware has the fewest
with 3
Source:

5. What is the role of counties?
Counties are political subdivisions of the state, charged with implementing state law and policy on a regional level - overseen by locally elected officials
Unlike cities, counties do not have “home rule” (authority to act independently of the state), therefore, counties only have powers and authorities delegated to them by the Arizona Legislature and State Constitution
County Government Authority
(Cover the bullets in the slide.)
Additional background: Every state handles legislative authority of local governments differently.
In Arizona, only limited authority has been granted to local governments by passage of statutes at the state legislature. In Arizona, a county MUST obtain permission from the state legislature if it wishes to pass a law or ordinance which is not specifically permitted under existing state statute.
This principle is known as Dillon's theory, which stipulates state preeminence over local governments (known as Dillon's Rule from an 1868 case: "Municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so may it destroy. If it may destroy, it may abridge and control“).

6. How is a county organized?
VOTERS ELECT
(State Law Mandates Activities of Elected Officials)
Sheriff
Treasurer
Assessor
County Attorney
School Superintendent
Recorder
Clerk of Superior Court
Board of Supervisors
County Administrator
Clerk of the BOS
County Engineer
Medical Examiner
Public Defender
Public Fiduciary
Other departments, boards, and commissions
How is a county organized?
This is how county government looks in an organizational chart.
Basically, the Arizona constitution and state law determine what a county does and the voters decide who does it.
The Arizona Constitution establishes the Board of Supervisors and seven specific county officers. Additionally, there are locally elected justices of the peace and constables.
This construction has been in place since territorial days. By design, it prioritizes electoral politics and accountability over management principles. What this means is that there is no single elected office leading the county—power is diffuse among several elected officials. So, it is critical that within a county separately elected officials partner with each other to operate the county as a cohesive unit.

7. How are Counties Governed?
Power is derived by Arizona Constitution and state law and is divided between elected governing body (board of supervisors) and separately elected officials
Constitutional Offices
Statutory Duties
State law endows county supervisors with budgetary authority over the county
The structure of county government requires close collaboration among the elected officials to promote an efficient, effective organization.
How are counties governed? (refer to slide)

8. Regionally Efficient Services
What does a county do?
Counties implement state law that is best delivered regionally: critical functions like the criminal justice system, conducting elections, public health programs and inspections, as well as the basics of government, such as the assessment of property, tax collection, and recordation of legal documents.
Public Safety is the single biggest expense and function of a county government.
Counties provide law enforcement on the streets, operate jails and juvenile detention centers for everyone awaiting trial and for some people serving their sentences.
Counties must prosecute state crimes, hire defense attorneys, fund the Superior and justice courts, and provide for probation oversight when it is ordered by the court.
Counties prepare for and respond to man-made and natural disasters. (Rodeo Chediski ‘02, Wallow Fire ‘11, Cedar Creek ’16)
Counties implement the public health programs of the state Department of Health Services and the Department of Environmental Quality.
For example, counties are responsible for monitoring and controlling outbreaks of infectious disease (88 reportable infectious diseases, TB, measles, ZIKA).
Counties provide vaccinations, spray for mosquitos, address green pools and inspect septic systems.
Also, on behalf of the state, counties must implement federal mandates (Clean Air; Clean Water). For example, the state must comply with federal clean air mandates. To do that, ADEQ crafts an implementation plan and the county does the work: regulating and enforcing federal air quality standards (dust production). And, it’s funded by county sales and property taxes, along with fees on the regulated businesses (construction permits). These activities are mandated by federal law and include the cost of installing and maintaining air quality monitors, conducting studies and regulating businesses that produce pollutants and dust. (Applies in Maricopa, Pinal and Pima).
It is a similar situation with complying with the Clean Water Act: the federal government writes the rules; ADEQ drafts the state implementation plan, and the counties implement the storm water monitoring program.
And, finally, on behalf of the state, counties provide certain services that are basic necessities in society. Services like providing a medical examiner, burying the indigent, and providing a public fiduciary to assist with a decedents’ estate when there is no one else to do so, or to arrange for placement for the mentally ill and severely disabled persons.

9. Counties by the Numbers
Arizona’s County Governments provide essential services that millions of your constituents count on every day.
This handout that is in your packet gives a quick snapshot of some of the regional services provided by counties in your communities.

10. What else do counties do?
Perform city-type functions in unincorporated areas
Local law enforcement (sheriff) and justice courts (misdemeanors)
Build and maintain roads, manage transportation system, enforce building safety codes
Set and implement zoning, subdivision and other land use regulations
Beyond the regional services, counties are also expected to provide city-type functions to residents living in unincorporated areas.
Ask participants if anyone has lived or lives outside of Maricopa County in Arizona? As you know, the world is very different outside of this region.
Maricopa County is highly urbanized. Most residents in this county look to their municipalities for service. But, in the other fourteen counties, residents look to the county to provide law enforcement, basic planning and zoning, and road maintenance.

11. County Population Distribution
2015 Population Estimate
2015 Incorporated Population
2015 Unincorporated Population
% of Unincorporated Population 2015
Apache
72,215
10,404
61,811
85.60%
Cochise
129,112
78,198
50,914
39.40%
Coconino
141,602
86,366
55,236
39.00%
Gila
54,406
28,363
26,043
47.90%
Graham
38,475
17,337
21,138
54.90%
Greenlee
10,555
5,312
5,243
49.70%
La Paz
21,183
6,985
14,198
67.00%
Maricopa
4,076,438
3,782,560
293,878
7.20%
Mohave
205,716
127,447
78,269
38.00%
Navajo
109,671
40,176
69,495
63.40%
Pima
1,009,371
648,348
361,023
35.80%
Pinal
406,468
201,543
204,925
50.40%
Santa Cruz
50,270
22,873
27,397
54.50%
Yavapai
217,778
131,637
86,141
39.60%
Yuma
214,991
150,811
64,180
29.90%
Arizona
6,758,251
5,338,360
1,419,891
21.00%
This slide illustrates the point that outside of Maricopa County significant numbers of county residents live in unincorporated areas---which places greater demand on the county government to provide city-type services.
Maricopa County only has 7.25% of its population outside of a city. In Pima, 35.8% of residents live in unincorporated areas. In fact, Pima County serves a larger unincorporated population than Maricopa County (361,023 vs 293,878).
In Navajo County, 63% of our residents live outside of municipalities.
*All data obtained via July 1, 2015 population estimates for Arizona’s Counties via Arizona’s Office of Employment and Population Statistics.

12. How are counties funded?
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Counties are funded through a combination of local and state-shared revenue (sources in blue are statutorily capped):
Local tax revenue
Half-cent sales tax
Primary property tax
Secondary property tax (for dedicated purposes)
State-shared revenue
Sales tax (cities receive a portion of state income tax)
Vehicle license tax
Highway User Revenue Fund (HURF)
Over $140.6 Million diverted from counties since 2009
How are counties funded?
Counties have very few revenue options. Cities have the authority to raise revenues in a variety of ways that are not available to counties.
County revenue authorities are capped or limited by state law and the Arizona Constitution.
Describe “local tax revenue” authorities
Describe “state shared” revenues.
Counties do not receive “Urban Revenue Sharing”, which is income tax sharing that goes to the cities.
Counties receive sales tax revenue sharing, also know as TPT revenue sharing. This is in part how the state helps support the implementation of state mandates at the county level.
Counties also receive vehicle license taxes. This is because vehicles used to be part of the property tax base. When the state changed to a VLT system, revenues were shared to hold the counties harmless from the policy change.

13. Do counties have financial flexibility?
County Costs
Expenditure Limitation
Sales Tax Capped
Property Tax Capped
State shifts cost and
responsibilities to counties
Higher pension and
healthcare costs
Population growth increases
demand for more services
(This illustrates the basic county operating environment)
Revenues and expenditures are limited
Sales tax authority is capped at ½ cent. (Not approved in Pima; ¼ cent in Mohave; not authorized in Maricopa but they have a jail district)
Property tax levies are capped at 2% plus new construction added to the tax roles (Navajo contraction)
And, expenditure grow is capped by the Az Constitution (1980 base year may only grow by population growth and inflation).
Cost drivers, however, are not limited.
State cost shifts, pensions, health insurance, mandatory AHCCCS payments, criminal justice costs (in response to the state criminal code), road building and maintenance costs.
Is this revenue and expenditure model sustainable? In some counties, the short answer is no.
Two counties are already operating on a credit line just to make payroll during certain months of the year.
In Navajo County, our checking account gets as low as XX during the course of the year.

14. 5 Forces Impacting County Operations
State Legislature
U.S. Executive, Congressional & Federal Agencies
The Executive & State Agencies
Arizona’s 15 County Governments
This slide illustrates why counties believe so strongly in the partnership with state and federal leaders and why regular communication is so important.
Since counties are administrative arms of the state, there are five major forces that have the power to impact local operations: the legislature, the executive, the federal government, the courts and the ballot box. Each of these “forces” has the ability to set policy and drive costs in a county. Just to give you some recent examples:
Federal rules like Waters of the US, new overtime requirements, and ADA requirements for government websites will increase costs to county taxpayers, if finalized.
The Arizona Office of the Courts is in the process of mandating new court security measures.
ADEQ recently passed new guidelines for how counties must monitor storm water runoff.
The Auditor General has been including substantial findings related to cyber-security in the annual county audit. Complying with these findings will be very expensive.
Prop. 206, passed at the ballot in 2016, increases county costs by raising the minimum wage. Had the marijuana initiative passed I would be telling you how counties now have to implement its provisions in planning and zoning and in criminal justice.
And, finally, state action. When the legislature chooses to deal with its financial problems by shifting portions of the costs of state agencies to the counties, it necessarily diverts scarce resources from existing priorities and, in some counties, pushes up property tax rates.
Please know, I don’t say this to complain. I simply want you to be aware that all of these entities, using their powers to create well-intentioned public policy, have real consequences on county operations and resources. This just simply underscores why it is so important that county and state leaders to work together, communicate and forge a strong partnership.
Ballot & Voter Initiatives
The Courts

15. Takeaways
Since counties provide constitutional and state mandated services (public safety, transportation and criminal justice), your policy choices affect local costs and county responsiveness to constituents.
Federal, state and judicial action drive costs in county operations. 
Unlike cities, counties have limited financial flexibility and fixed, limited revenue streams. 
Counties need relief; state action diverting local resources for state obligations is bad public policy and damaging local services. 
County impacts since 2009: $504.4 million
Counties currently pay a portion of 4 state agencies, historically funded by the state GF
Absent relief counties will lose $52.42 million in this year’s budget
County officials are your partners in serving your constituents.
Review what counties do, how they are governed and what the financial realities are in today’s current climate.

16. CSA -AACo Partners in County Advocacy
Jennifer Marson, Executive Director - AACo
Craig Sullivan, Executive Director - CSA
Our Address
West Washington St.
Phoenix, AZ 85009