intergovernmental
agreements; procedure
(NOW: expenditure limitation; disproportionate
share funding)
DP |
Committee on Counties & Municipalities |
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DPA S/E |
Committee on Public Institutions & Rural Affairs |
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DPA |
Caucus and COW |
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X |
As Transmitted to the Governor |
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SB 1246 extends the suspension of the penalty prescribed in statute for two more years and provides an alternative limitation and penalty. In addition, SB 1246 transfers funding for disproportionate share health services retroactively to FY 2000-2001.
History
Each year legislation is passed which requires the Economic Estimates Commission [EEC] within the Department of Revenue to adjust the county expenditure limit for disproportionate share state and federal funding. The annual session law requires the EEC to decrease a county’s expenditure base limit by the state and federal disproportionate share payments received in a fiscal year, then recalculate the county’s expenditure limit using the adjusted base limit for that fiscal year. Currently, only Maricopa and Pima counties have an adjustment to their expenditure limitations for disproportionate share payments.
The Arizona Constitution requires the EEC to determine each year the expenditure limit for the following fiscal year for each county, community college district, city, and town [political subdivisions]. The Constitution requires that the limitation be calculated based upon the actual payments of local revenues of FY 1979-1980, referred to as the base limit. Each year, the base limits for local jurisdictions are adjusted for population and inflation to reach the expenditure limit. The inflation index used by the EEC is the Gross Domestic Product [GDP] price deflator index, which is based on FY 1979-1980 as set forth in the Arizona Constitution.
In statute, if a county exceeds its expenditure limitations without authorization, the auditor general requires the board of supervisors to reduce the allowable levy of primary property taxes. If any other political subdivision exceeds its limit without authorization, the state treasurer is required to withhold a portion of the subdivision’s allocations based on a percentage of the excess expenditures. Last year, HB 2563 was passed which suspended the penalty for exceeding the expenditure limitation for one year, provided expenditures did not exceed an alternative limitation. SB 1246 extends the suspension of the penalty prescribed in statute for two more years and provides an alternative limitation and penalty.