The current expenditure limit prevents the county from being able to use these funds now. 
The county provides essential services to residents, including law enforcement, road maintenance and road improvement projects, disaster response, elections, health and many other services that impact residents every day – all while having the lowest primary property tax rate in Arizona. Adjusting the expenditure base does not allow Coconino County to spend more revenues than it receives, nor does it add new taxes or raise property or other taxes. It allows the county to expend the revenues that voters have already authorized the state and county to collect, like the Road Maintenance Sales Tax (RMST), which was approved by about 65% of county voters in 2014.
Since 2014, the county has invested $92 million from RMST into road maintenance and improvement projects, bringing the percentage of county-maintained paved roads in poor or very poor condition from 36% in 2014 to 3% in 2023. With these funds, the County Public Works Department maintains 494 miles of county-owned roads, 202 miles of Forest Service roads and 286 miles of school bus routes on the Navajo Nation.
The current expenditure limit prevents the county from being able to use these funds now. To keep projects on schedule, the county needed to take out a loan in 2023 and 2024. Unfortunately, a loan comes with interest payments and fees, which is a cost to taxpayers, but it also creates an allowable exclusion to the expenditure limit.For example, over three years, there is approximately $45 million collected in RMST revenue for road maintenance and improvement projects. Because loans are needed to expend funds outside of the expenditure limit, up to $7,425,000 could be paid in fees and interest, leaving $37,575,000 available for road project investments. With the proposed increase in the expenditure base, that $7,425,000 could be used to complete 1,223 lane miles of crack fill, 85 lane miles of chip seal, 36 lane miles of mill and fill road improvements, and 17 lane miles of road reconstruction.
The expenditure base was set by Arizona voters in 1980 and reflects the amount Coconino County spent in fiscal year 1980 (from July 1, 1979 – June 30, 1980), which was $10,268,127. Each year, that number is multiplied by population growth and the national inflation rate to get the annual expenditure limit. This process happens in all Arizona counties, cities, towns, community college districts and school districts.
What this equation doesn’t reflect is that over the past decade, state-collected sales taxes shared with the county have increased an average of 6.7% each year, while the expenditure limit has increased an average of only 2.7% per year. In addition, overall costs in Northern Arizona have often increased above the national inflation rate.
If Proposition 482 does not pass, the expenditure base will remain the same and, as required by state law, Coconino County will continue to balance revenues and expenditures as it has always done. But it is correct to say that balancing will be difficult and meeting service delivery needs will be a significant challenge, particularly related to road maintenance and road improvement projects.
Coconino County is not alone. Four Arizona counties and 84 cities and towns have permanently adjusted their expenditure base, including Navajo and Apache Counties and the City of Flagstaff. FBN
For more information, visit coconino.az.gov/Prop482 or if you have questions, email prop482@coconino.az.gov.
By Andy Bertelsen
Andy Bertelsen is the manager of Coconino County.
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