municipal expenditure
limitations; penalty waiver
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Committee on Commerce and Economic Development |
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Committee on Ways and Means |
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W/D |
Committee on Appropriations |
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Caucus and COW |
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As Passed the House |
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*****REVISED*****
HB 2508 waives the penalty assessed against the City of El Mirage for exceeding their expenditure limitation without authorization for FY 1998-99.
The voters amended the Arizona Constitution (Article IX '20 & 21) in 1980, thereby establishing a limit for the annual expenditures of each county, city, town and community college district. The Constitution establishes the process for determining the expenditure limit. The limitation is based on the amount of monies spent by the municipality for FY 1979-1980, adjusted for inflation and population growth on an annual basis. Statute outlines the penalties for exceeding expenditure limits:
|
Amount in
Excess of Expenditure
Limit |
Penalty |
|
<5% of the limitation. |
Equal
to the amount of the excess expenditure. |
|
<5%
but a consecutive instance. |
Three
times the amount of the excess expenditure. |
|
> 5% but < 10% of the
limitation. |
Three
times the amount of the excess expenditure. |
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> 10% of the limitation. |
Five
times the amount of the excess expenditure or 1/3 of the municipality=s Urban Revenue Share* for the coming fiscal year,
whichever is less. |
* State income tax collections are shared with Arizona municipalities in an Urban Revenue Sharing program. The distribution is based on population and is given only to incorporated cities and towns. The remainder is deposited in the state general fund after amounts sufficient to pay refunds are allocated.
The City of Tombstone exceeded its expenditure limitation for FY 1994-95; Laws 1998, Chapter 95, waived the penalty. Additionally, the Legislature waived the penalty for excess expenditures for Santa Cruz County for FY 1982-83.
HB 2508 waives the penalty for excess expenditures for the City of El Mirage for FY 1998-99.
The City of El Mirage exceeded its expenditure limit for FY 1998-99. The total limitation was $2,449,934, but the actual expenditure was $4,087,771 [exceeding the limitation by $1,637,837]. In 1999, El Mirage voters passed the "Home Rule," which allows the city to set its own expenditure limits.
The current statutory penalty for El Mirage is five times the excess expenditure amount or 1/3 of the city's Urban Revenue Share for the coming fiscal year [1/3 of their estimated $600,000 Urban Revenue Share], whichever is less. Based on the statutory requirement, the City of El Mirage would experience a penalty of approximately $200,000.
· Provides a waiver to the City of El Mirage for the penalty that was imposed because the city exceeded their expenditure limit for FY 1998-99.
· Applies the bill's provisions retroactively from and after June 30, 2001.