By Christina Fuoco-Karasinski
Foothills Focus Executive Editor
Proposition 433 will be on the August 9 ballot for Cave Creek voters to decide whether or not to adopt an alternative expenditure limitation (home rule option).
This is an alternative to having the state-imposed expenditure limitation for the town’s budget over the next four years.
To put it simply, Cave Creek, like all cities and towns in Arizona, is required to have a balanced budget where spending cannot exceed available revenues.
In 1980, Arizona voters approved a constitutional amendment designed to limit the annual expenditures of all Arizona cities and towns. The law requires that each municipality adopt a limit on its annual expenditures based on a formula that is set by the state. This is known as the state-imposed expenditure limitation.
The expenditure limitation is adopted each year in conjunction with the adoption of the budget, which includes public notice and public hearings as required by law. Expenditures cannot exceed the revenue, thereby creating a balanced budget. This option is effective for four years.
The town of Cave Creek incorporated in 1986, however the state limitation is based on actual payments of local revenues for fiscal year 1980, before the town was incorporated and before it provided many services to the residents.
Cave Creek’s limit is based upon the average amount of actual fiscal year 1980 per capita payments of local revenues made to all cities and towns within Maricopa County. The limitation is adjusted each year based on population increases and inflation. The state-imposed expenditure limitation is $11.6 million. The state expenditure limitation is not calculated based on the revenue received by the town.
The upcoming fiscal year budget revenue estimates are $37.7 million. If the voters do not approve Proposition 433, the excess revenue will be deposited in the bank instead of providing general government services, public safety, public road repair and maintenance and operation of water and wastewater utilities.