Miner Editorial | Vote for Kingman Proposition 416 on Aug. 4

If you vote to approve the Permanent Base Adjustment – aka Proposition 416 – in the Aug. 4 primary election, you won’t be raising your taxes. And you won’t be allowing Kingman city leaders to spend more than they collect.

You’ll simply be voting to allow the city to continue to spend the tax dollars you already pay, and continue to provide vital services like police and fire protection, without the city having to come back every four years and beg you to do it again.

Arizona has a convoluted way of curtailing not what a city can collect, but what a city can spend.

These state-imposed spending limits were enacted four decades ago. Spending is based off each city’s 1980 budget adjusted for inflation and population by the state’s Economic Estimates Commission.

Over the years, 79 of Arizona’s 91 cities and towns have voted to override that edict by exercising one of two options at their disposal – the Home Rule Option, or the Permanent Base Adjustment. Kingman voters approved the Home Rule Option in 1988, and every four years since.

Home Rule allows cities to exempt certain services from the spending limit, in Kingman’s case water, sewer, sanitation and airport. These departments generate their own revenue and operate out of separate funds, not the city’s general fund. And their exemption from the state spending limitation allows the city to spend more to provide police and fire protection, parks and other vital services, while still coming in under the spending limit.

That arrangement has worked fine for 32 years from the city’s perspective, but apparently not from the perspective of the voters, who have approved Home Rule by smaller and smaller margins since 2000. In 2018 it was approved by just 55%.

And failure to approve some sort of exemption from the state spending limit – either Home Rule or a Permanent Base Adjustment – would be fiscally disastrous. It would force the city to operate on its 1979-80 budget, without exemptions or adjustments for population and inflation.

And the city has grown substantially during those four decades, from 9,257 residents in 1980 to an estimated 31,000 in 2019. City services and departments have expanded to keep pace with that growing population.

To reduce spending to the level of the city in 1980 – a city a third of the current size – would mean drastically curtailing services, laying off essential employees and taking other draconian steps to cut $50 million in spending from a budget of about $222 million.

“I want everybody to understand that (Kingman with a $50 million budget reduction) is not a functioning city anymore,” Council Member Jamie Scott Stehly told the city council before they voted to place the Permanent Base Adjustment on the election ballot. “It is not proper police (protection), it is not proper fire (protection).”

And keep in mind that all of this chaos would happen even as tax receipts, fees and other revenue piled up. The money would be available; it just couldn’t be spent.

Failure to approve the Permanent Base Adjustment measure on Aug. 4 would move the city one step closer to that fiscal cliff.

While Kingman could continue under Home Rule for two more years due to the four-year approval in 2018, it would make it absolutely necessary that either Home Rule or a Permanent Base Adjustment be approved in 2022, or the walls will come tumbling down.

The question as it appears on the ballot might seem a bit confusing. The proposition will read: “Shall the expenditure base of the City of Kingman be permanently adjusted by $5 million.” What that means is the state spending limit would be calculated as if the city had a $9 million budget in 1980, not a $4 million budget. And that would effectively raise the spending limit, when adjusted for population and inflation, to allow the city to continue to spend what it collects and continue to provide the services it provides.

Again, Proposition 416 is not a tax hike. And again, its approval will not take spending out of the voters’ hands. The city will still be prohibited from spending more than it collects in revenues, and adjusting the permanent base again to allow additional spending would also require the approval of voters.

Think of Proposition 416 this way. It’s a bookkeeping measure. It costs you nothing to approve it. But you’ll pay a steep price in lost services if you don’t.

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