News & Opinion » Currents Feature

Historic Parallels

How does Tucson's current budget crisis compare to that of the Great Depression?

by

comment

The current economic crisis has led to declining city revenues, forcing widespread public-employee furloughs and layoffs.

But things were even worse 80 years ago during the Great Depression.

The 1930s started innocently enough, with the Tucson City Council quickly adopting a $744,000 operating budget in July.

Much of the budget was spent by three departments—water, fire and police—providing services to a population of 32,500. Tucson even had $250 to help fund a Fourth of July celebration. (City funding for a firework display was eliminated in 2009.)

By April 1931, difficult economic realities were setting in, and a deficit of up to $50,000 was projected for the fiscal year ending in June. (Following previous cost-cutting measures, the city is now addressing a potential $32 million shortfall in a $420 million general-fund budget which no longer includes Tucson Water.)

To balance the 1931 budget, City Manager George Wade proposed unpaid one-week furloughs for all city workers. (Similar furloughs were imposed by the city this fiscal year and may be continued.)

Newspaper accounts indicate that Wade also wanted to dismiss more than 20 city employees. Among them were three police officers, from a total force of about 35. (This time, 89 layoffs have been approved—but the inclusion of cops has been taboo.)

Wade presented his suggestions to the council in a closed-door session. (Today, the problems are discussed publicly.) The Tucson Daily Citizen noted that "criticisms and internal dissention" among the elected officials resulted from the secret meeting, but the furloughs were implemented.

According to the Arizona Daily Star, the city manager also informed the 1931 council: "The budget difficulties of this present fiscal year will not end the trouble." (Because of falling revenues and increased expenses in some areas, next year's projected city budget is expected to be slashed even further.)

The 1931 budget-cutting measures worked somewhat, and the deficit was only $11,200 at the end of May. Despite that, the council fired Wade and hired R.E. Butler.

The new city manager optimistically proposed a budget of $743,500 for the coming fiscal year. A citizens group calling itself the Pima County Taxpayers' Association, however, suggested substantial changes, including a layoff of six city employees. The council went along with most of these ideas, but preserved three positions in the garbage department. At the same time, they also funded a $1,200 request by the Tucson Symphony Orchestra. (Final cuts for the arts are still to be determined this year.)

Revenues, though, again fell below projections, and in the summer of 1932, the council was forced to consider a budget of $646,000—a 13 percent reduction from the previous year. To reach the target, city leaders discussed firing a dozen employees, including five from the engineer's office and two police officers.

Other cost-cutting measures were also contemplated. The primary proposal: reducing wages, ranging from a 16 percent cut for the city manager to 5 percent for those earning at least $115 a month. (City Manager Mike Letcher proposed an "across-the-board" 3 percent pay cut earlier this month, an idea rejected by the City Council.)

According to the Arizona Daily Star of June 28, 1932, "the council met, wrangled and 'blew off the lid'" over these proposals. A few weeks later, they met again in front of what was characterized as "the largest crowd ever assembled at the City Hall." (Large groups have also been attending the current council budget sessions.)

The issue of the city's bonded indebtedness arose at this July 11 meeting. With $220,000 being paid in required bond-redemption and interest payments, one speaker declared, "We have sold ourselves out to the future."

Despite the fiscal problems, the Sunshine Climate Club and Chamber of Commerce, the community's two promotional organizations, were slated to receive a total of $10,000. (Present outside agencies not being cut as much as others include Tucson Regional Economic Opportunities and the Metropolitan Tucson Convention and Visitors Bureau.)

After a contentious public hearing, the 1932 budget was approved—but it also proved to be overly optimistic. Revenues continued to fall, and by June 1933, among other positions, three police officers' jobs were eliminated.

One of those let go was Nora Nugent, the first woman hired by the Tucson Police Department. Several people vehemently criticized this termination, and a petition bearing 1,600 signatures demanding her reinstatement was presented to the council—but they didn't budge.

More painful decisions had to be made in developing the fiscal-year spending plan that began in July 1933, with a budget of $534,400.

Many city workers saw their wages reduced again. City Manager Butler's salary was cut to $400 a month, while $2.50 was taken from the pay of an employee making $145 a month.

Butler insisted these wage cuts weren't necessary, but the City Council wanted to keep the property tax—one of the city's primary revenue sources—as low as possible in order to satisfy prominent businessmen.

By July 1934, the financial bleeding had finally slowed. The budget adopted that month was $556,500, a slight increase over the previous spending plan. The drop, though, had been dramatic. Between 1930 and 1934, the budget had decreased by 25 percent.

Eight decades later, the City Council is wrestling with a general-fund budget reduction in the last two years of just less than 18 percent.

Add a comment