Navajo County administrators are warning of a significant hit to county revenues with the loss of jobs, property and sales tax revenues, and are asking citizens of the county to become educated and reach out to state legislators to bring relief.
Assistant County Manager Bryan Layton outlined the concerns, stating that while the rest of the state is recovering from the 2008 recession, that isn’t happening in Navajo County. “We’re actually experiencing a decline with the closure of the Navajo Generating Station near Page, the Kayenta mine and the potential closure of Cholla,” he said, referring to the Peabody Coal Mine in Kayenta and the Cholla Power Plant in Joseph City.
While there has been no definitive decision by officials regarding the Cholla plant, the replacing of coal-fired plants with less costly natural gas operations, as well the high maintenance costs associated with aging infrastructure, make it appear likely that the plant will either close or reduce infrastructure considerably by 2025, meaning less property tax revenues and fewer jobs.
Although Navajo Generating Station is located in Coconino County, the coal provided for the facility comes from the Peabody Mine, with a majority of those employees living in Navajo County. According to Layton, the county will experience a total decrease in property tax of $1.2 million from Cholla and the Kayenta mine. “As the remaining generators and plant property close at Cholla, we will see a total negative impact on property tax of $1 million. We will also see a negative impact from the closure of property at the Kayenta Mine, which is calculated to be just under $200,000,” he explained.
Added to the impact is the loss of payroll and sales tax revenues, although the direct impact is hard to measure as not all of those incomes are spent in Navajo County. Further added is the trickle-down effect that occurs when smaller local businesses no longer have these large industries providing contracts and purchasing items for production.
Layton also said that another issue faced by the county is that the state is increasing the county contribution to the state retirement fund by 129 percent, creating an additional $558,000 that must be paid by the county.
“Nine percent of our budget goes to pay for state programs. We just can’t absorb all this without making cuts,” said Layton. The county is also concerned about maintaining facilities and an aging vehicle fleet that Layton called “older than prudent.”
The county is mandated to provide specific services to the public, but Layton said that how those services are delivered might have to change. When asked if it could mean layoffs at the county, he had little comment, saying, “We will be going before the Board of Supervisors and providing some options for them to consider.”
Layton, along with County Manager James Jayne, Finance Director Paige Peterson and other county officials, has been addressing these concerns with district representatives, as well as State Senator Sylvia Allen. They encourage citizens to add their voices to this effort by contacting legislators to let them know that Navajo County can no longer afford these losses and needs relief from providing funds to the state.
“People don’t realize that this impact will be devastating. Things are going to look different moving forward,” stated Jayne, who added that the county is large and diverse, but, “we are all going to be affected by this loss and must pull together to make our voices heard.”
The county supervisors reviewed the options during their March 27 meeting in preparation for upcoming budget talks.
