Source: https://www.azag.gov/opinions/i19-004-r18-021r18-019
Timestamp: 2019-10-17 12:57:48
Document Index: 141178573

Matched Legal Cases: ['§ 20', '§ 20', '§ 20', 'art. 9', '§ 20', '§ 20', '§ 20', '§ 20', '§ 20', '§ 20', '§ 20']

Whether payments for public retirement plan unfunded liabilities are excluded by Article 9, Section 20(3)(d)(i) from a political subdivision’s constitutional expenditure limits | Arizona Attorney General
Whether payments for public retirement plan unfunded liabilities are excluded by Article 9, Section 20(3)(d)(i) from a political subdivision’s constitutional expenditure limits
I19-004 (R18-021/R18-019)
I19-004.pdf76.8 KB
Lindsey A. Perry, CPA, CFE
Article 9, § 20(1) of the Arizona Constitution limits “expenditures” by counties, cities, and towns. Expenditures are defined as “any authorization for the payment of local revenues.” Id. § 20(3)(c). If something is excluded from “local revenues,” it is thus outside the scope of the expenditure limit. There are several such exclusions, including “[a]ny amounts or property received from the issuance or incurrence of bonds or other lawful long-term obligations issued or incurred for a specific purpose, or collected or segregated to make payments or deposits required by a contract concerning such bonds or obligations.” Id. § 20(3)(d)(i).
The Arizona Auditor General and the Maricopa County Attorney both requested legal opinions on the following question, which we restate for purposes of this opinion:
“Expenditure[s]” are defined as “any authorization[s] for the payment of local revenues.” Ariz. Const. art. 9, § 20(3)(c). “Local revenues” are defined as “all monies, revenues, funds, fees, fines, penalties, tuitions, property, and receipts of any kind whatsoever received by or for the account of a political subdivision or any of its agencies, departments, offices, boards, commissions, authorities, councils and institutions.” Id. § 20(3)(d). If something is excluded from the definition of “local revenues,” then the authorization for expending that amount is excluded from the definition of “expenditure,” see id. § 20(3)(c), and does not count toward the overall spending limit in § 20(1), which applies only to “expenditures.” See Mountain States Legal Found. v. Apache Cty., 146 Ariz. 479, 483 n.7 (App. 1985) (concluding “the revenues are not local revenues and therefore … not an expenditure within the constitutional definition”).
The Amortization Amounts are not excluded from the definition of “local revenues” by article 9, § 20(3)(d)(i). Instead, such amounts must be included in “expenditures” for purposes of the county, city, and town spending limits in § 20(1).
The Auditor General’s request posed the additional question whether the County is in violation of Article 9, §§ 20 and 21 of the Arizona Constitution. We decline to answer that question.
The Attorney General previously referred to this subsection as “bond related expenditures.” 1986 Ariz. Op. Att’y Gen. 72 (1986). And the Auditor General has long interpreted this subsection as only covering bonds, certificates of participation, and sale-leasebacks.