Prop 401: What you need to know

UPDATE:

Initial election results indicate that the measure will pass.

ORIGINAL STORY:

Proposition 401 will be put to the voters in a small, special election in La Paz County on Tuesday. It’s purpose is to raise the County’s ‘expenditure limitation’ for the next fiscal year, with a second special election needed in November to make the change permanent.

Below, Parker Live attempts to answer some frequently asked questions on the ballot measure.

What is an expenditure limitation?

It’s a limit placed on Arizona counties that caps how much they can spend annually, whether they have the money to cover it or not. In recent years, La Paz County has gone over its expenditure limitation and could be expected to suffer financial penalty by the State of Arizona if it is not corrected.

What is causing La Paz County to go over its limitation?

The County has grown since the limitation was set in the 1980s. All economic development, all expenditures made to bring in revenue including enterprises like Emerald Canyon Golf Course and the park system counts against the expenditure limitation, which has not been changed or updated in 38 years. Additionally, the state has shifted costs to counties that they did not previously have. The current administration sees increasing the expenditure limitation as part of fixing the County’s financial status.

Is this a tax increase?

No, it’s completely unrelated to taxes or taxation.

How much do they want to change it by?

The base rate since the County’s formation has been $2.24 million. Proposition 401 would increase it by $3 million for the 2018/2019 fiscal year. A second measure will be needed to make the increase permanent and is anticipated to be on the November general election ballot.

In what way do non-tax revenues contribute to the need for a limitation increase?

Because La Paz County has a low tax base (not enough private land generating property tax), it relies on other revenues, including from enterprises like the Emerald Canyon Golf Course, the County Landfill and the park system. But even though these enterprises are profitable and generate money for the County, they also cost money to run, which counts against the County’s expenditure limitation. See this example.

More in-depth information can be found HERE, HERE and HERE. Parker Live‘s first story on this can be found HERE.

14 comments

  1. John Stephen Lane Sr.

    I voted against this Prop. If you read the text, it’s basically a green light for a slush fund to spend $3 million on anything the country wants without any checks and balances. They claim there won’t be a tax increase, yet it clearly says where the money will come from, taxes. Now if the there is no tax increase, that would mean that the county is sitting on $3 million it cannot by law spend. If this is the case, then why not tax relief? I could support a proposition which clearly states exactly what the money would go for. A gross generalization is not acceptable to me and should not be for anyone. Imagine someone giving you a check for $3 million without any accountability. This is a very bad idea.

  2. Robin Schilling

    The money is not sitting In a slush fund. The money is being used now as part of the county budget. it has been used since 2014 as part of the county budget which provides services to residents. This is not a tax increase, this is not allowing the county to borrow money. A yes vote just allows the county to spend the revenues, they already have in their budgets.

  3. Why not just tighten spending and close non esetial sections like golf course increase charges for out side garbage at land fill (extravel tax for out of state loads).cut supervisor wages.

  4. John Stephen Lane Sr.

    Then the proper venue would be for the legislature to raise the limit. It is a slush fund for the county to spend it on all the different things, not anything specific. This be definition is a slush fund. As I said, if the county has a specific dire need, then we can decide the issue on its merits. I read the proposition. It says the county can spend it on pretty much anything they want without any prioritization. It also states where the money is coming from, such as property taxes. Again, if there is no tax increase that means the money is already in the bank or expected to be. Paying down the debt would be a start. In the end it’s our money to be spent and we have the right to know exactly what it’s for. If the county created a budget which it’s expenditures exceed the lawful limitations, then that is on the county. Since this appears to be a general fund issue, then the county should have gone to the legislature.

  5. I think this is a misunderstanding of the proposition. The golf course makes money. But its costs (which are less than its revenues) still count against the expenditure limitation. All enterprises work this way, but as the County grows, and invests more in money-making exercises (which it needs to do, because the tax base isn’t large enough), the expenditure limitation will need to grow with it. That’s what Prop 401 does.

  6. Robin Schilling

    The AZ State constitution sets the parameters for determining the
    Limit it is not up to legislators to raise the limit it is up to the voters that is why it is on the ballot. Other counties have done this several times and for the towns like Parker they also go to the voters to raise the spending limit, it is call the Home Rule. The town of Parker reviews this limit every two years.The county is using this money now to support the county budget just as it has since 2014. The budget money comes from taxes, grants and other revenues from parks and the golf course. As the county has grown, revenues have grown and services have grown they have never gone back to the voters to ask to increase their spending limit. If this does not pass even though the county has the revenues to support the budget they will need to cut services to residents.

  7. John Stephen Lane Sr.

    One more thing to consider. What is to prevent the county from using this or part of this money to buy the public land that member Gosar is trying to get Congress to sell to the county over the objections of BLM? The county wants to then make that land available to an entity to build an 8,000 acre solar farm. Now I am all about solar energy, but if BLM says that the site is unsuitable from an environmental standpoint, then I would have to defer to the experts. I don’t like end runs around the law, especially when there is a scheme afoot.

  8. As an accountant I am appalled to see that La Paz County has received more than a dozen findings in their audit.
    This can be found by going to their website: http://www.co.la_paz.az.us/Home/Government/Departments/Finance/Financial Reports.
    Read he single audit report for FY 2016, which is the latest audit completed, and you’ll see many examples of sloppy bookkeeping and complete disregard for what should be standard procedure when handling money. Receiving an audit “finding” is a very negative, very big deal and highlights non-compliance with Arizona statues for governmental entities. I happen to work for a government and if our audits came out this bad I wouldn’t have a job and neither would our finance director or our superiors.
    As a resident of La Paz County I hope that we now have officials in place that will monitor their financial policies and procedures and not continue in the obviously failed and sloppy methods of previous county administrators.
    I will be voting yes on Prop. 401, this time. But the supervisors need to do a much better job when it comes to keeping skilled, responsible accountants.

  9. Lori Leitzke Lusk

    And aren’t these the same people that were in office when the county went broke? I’d like to see some sort of check and balance as to what they spend it on. There are some I don’t trust with the money. I haven’t been impressed so far with what they’ve done.

  10. John Stephen Lane Sr.

    Robin Schilling cut services then. If the county deliberately created a budget like this knowing the Constitution limits then they are at fault. Should they expect the populace to automatically approve a budget which violates the Constitution? Something wrong here then. Home Rule would allow the county to do as they please. I’ve lived here four years and I’ve not seen this before. Did I miss something? If there is a back door then why is there a constitutional issue? This spending limit as you call it only applies through 2019. My point also is that they aren’t spending the money now for services, so there can be no cuts since they don’t exist. It’s simple math. You cannot cut services you aren’t paying for.

    We have a right to know specifically they want to spend the money on. What services are in dire need that costs $3 million? Otherwise, it’s s blank check and I’m against that on principle.

  11. Robin Schilling

    They are not doing as they please, the budget is public and they have several work sessions for the public. You are more then Welcome to attend board meetings and weigh in. The bottom line is previous administrations should have gone to the voters before 2014 when the county revenues grew and county services grew. They did not and shame on them. No matter what, to be able to spend additional revenues the county would’ve had to go back to the voters either in 2014 or now. Just to give you an example of how this is affecting the county. Back in 1980’s when the limitation was set we did not have a golf course. The county has emerald canyon which requires spending to maintain and also brings in revenue. That additional spending and revenue was not part of the original spending limitation so to spend the money to maintain the golf course and to spend the revenues the golf course takes in puts us over the spending limit. This is money generated by the golf course not borrowed money, not new tax money. If this fails then the county must reduce budgets to previous fiscal years before 2014 levels, they obviously cannot cut public safety but other services would be on the chopping block like parks and the golf course and other services and jobs that go with those services. This is not a tax increase, the county wants to spend the money they already have in the revenue stream.

  12. Lyndora Miller

    John Stephen Lane Sr. Well said

  13. Parker Live Updates

    Initial results indicate the measure will pass.

  14. simplest of terms

    1. County may have same services today as 10 years ago. 10 years ago gas, cars, food etc. cost way less then today. Cost to provide same services as 10 years ago obviously has gone up = spending to provide same services goes up. To spend more, you must increase expenditure limit. Sorta like throwing your kids a birthday party. When they were 1, it was fairly inexpensive. By 10, cost goes way up and you ask your wife if we can afford it before those invites go out. Bottom line, this was needed years ago, but management then did not do it. Management today is trying to do things correctly.

    2. Lets not break even, lets make money to enhance services to county at no additional cost to county tax payers! Let’s keep quality people that provide those services. Well, these new ventures are great, but to spend more of the profit to benefit tax payer, you need to raise expenditure limit. This is a normal process, just La Paz has not done it in the past. Again, management today is trying to do things correctly. If you want to live in stone age, please relocate…….

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