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On June 3, 1980, Arizona voters approved Arizona Constitution, Article IX, Section 20, prescribing an expenditure limitation for each county, city and town. The expenditure limitation's purpose is to control expenditures of local revenues and limit future increases in spending to adjustments for inflation and population growth. Arizona Revised Statute 41-563 provides additional details on the administrative process for expenditure limitations.
The expenditure limitation does not provide adjustments for expenditures that were not anticipated in the 1980 initiative. These include state cost shifts to counties, increases in retirement contributions far in excess of inflation, and enterprises such as the La Paz County Landfill and Emerald Canyon Golf Course.
The Constitution does enable a county to increase its expenditure limitation by a temporary increase for the following fiscal year or by a permanent increase in the base limit established in 1980 (or 1983 for La Paz County). This increase must be approved by the Board of Supervisors and by a majority of the voters at an election.
If the Auditor General determines after a public hearing that in any fiscal year a county has exceeded its expenditure limitation, the allowable levy of primary property taxes of the county shall be reduced in the fiscal year following the Auditor General's hearing by the amount of the expenditures that exceeded the County's expenditure limitation.
The La Paz County Board of Supervisors has called a special election on May 15, 2018 to submit to the voters Proposition 401 to temporarily increase the fiscal year 2018/2019 expenditure limitation. It is anticipated that a permanent increase in the expenditure limitation base amount will be submitted to the voters at the November 2018 general election which would be effective beginning in fiscal year 2019/2020.