YOU CAN'T JUDGE A BUDGET BY ITS COVER
Maricopa County's finances may be in shambles, but the county's budget apparently still looks great on paper.
Even though it is more than $100 million in debt, has laid off hundreds of employees and is scrambling to dig its way out of the hole, the county won a national award last week for "Distinguished Budget Presentation."
The award, the highest presented by the Chicago-based Government Finance Officers Association, was given to Maricopa County for its fiscal 1993-94 budget--the actual book detailing the budget adopted by the Board of Supervisors last summer.
(Maricopa County operates in fiscal years that begin on July 1 and end on June 30.)
According to Jeffrey Esser, executive director of the association, the award is given to governments whose budget documents meet the association's standards for such things as clarity and organization.
The nonprofit association tries to help governments draw up budget documents that can be easily understood by taxpayers and elected officials.
Maricopa County's inch-thick budget book for this fiscal year does look good.
The problem, of course, is that rather than enlightening taxpayers, the budget deceived them, laying the groundwork for the county's current financial crisis.
The budget was salted with inflated predictions of how much tax money the county could expect, and written to hide the fact that the county was using short-term credit to hide tens of millions of dollars in rolling debt (Dangerous Games, Your Money," April 27).
Just how bad was the award-winning budget?
Since the budget was passed, the county has sunk into a morass of deficits and finger-pointing. Just last month, more than 300 county employees lost their jobs and services were cut as the supervisors grappled with a $22 million gap between actual tax revenues and the amount the budget had predicted.
Even more drastic layoffs and service cuts are expected.
The county's former finance director, Ray Smith, and former county manager Roy Pederson--who presided over the drafting of the award-winning budget--were both compelled to resign as the county's finances collapsed.
Once already, the county's bond rating has been downgraded, and it is likely to be downgraded again as supervisors try to line up more credit to cover their recurring cash shortages.
Even the name of the office responsible for the budget has been changed. The former Central Budget Office is now the Corporate Business Strategies Office.
Board members are blaming the county staff for lying to them about the county's true financial picture, but the county's own books--including this year's award-winning budget document--show that the finances have been in a tailspin for almost four years.
"I must emphasize that we do not check the numbers," says Esser. "In general, the purpose of this program is to look at the budget document and to help governments improve . . . the document so that it can be readable and understandable and communicate to the citizens and the press what the priorities of the government are and where the money is being spent."
As many as 800 governments per year send in their budgets to be reviewed by the association, Esser says. Each budget is sent to three outside expert volunteers, who weigh it against the association's standards.
Maricopa County's budget book met all of those standards, Esser says. Assuming that the numbers it contained were true.
"We do not make any judgments about any government's wealth or lack thereof," he says. "There's no way we can stay abreast of what each government is doing."
Brian Hushek, spokesman for the newly reconfigured county Corporate Business Strategies Office, says the office is aware of the irony of the award, given the ongoing scramble to salvage the county's financial health.
"We're proud of receiving the award for the budget as a document," he says. "It's unfortunate that there were numbers in it that were not as precise as predicted."
The county will submit its next budget to the association, as well, Hushek says, and see if it can two-peat for the national honor. This time, budget drafters will try to use numbers that bear a closer resemblance to reality, he says.
"We are paying very close attention to making sure that if we have to assume something, if we don't have an exact figure, we are footnoting them," he says.
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