Request that the Legislature refer a change to the Arizona Constitution to the voters to modify Article 9, Section 20, expenditure limitation; adjustments; reporting that would exclude capital expenditures from determining the applicable expenditure limitation for counties, cities and towns.

The expenditure limitation requirement of the Constitution prevents local governmental entities from overspending their budgets and protects taxpayers from dramatic increases in budget (and corresponding property tax increases).  Unfortunately, as currently written, it prevents Counties from expending funds wisely for major capital expenditures.  Specifically stated, in order to fund a major capital project such as a building, which will surely result in exceeding the County’s expenditure limitation using current revenues, the only way that counties can accomplish it is to borrow money using devices such as certificates of participation and paying interest on it.  Counties that watch their revenues and expenditures wisely instead may be able to accumulate cash reserves (a necessity due to the delay in receiving new property tax revenue each year) and pay cash for the capital expenditure.  Ultimately the taxpayers will pay less money for the expenditure, which will occur anyway, and funds will be expended more wisely.  Simply stated, it is better government to budget wisely, pay cash for significant expenditures, rather than getting into an endless cycle of borrowing money and having to pay it back with interest.
 

Forward to the County Supervisors Association

Nor known at this time.

Not known at this time.