• Community Presentation
• Proposition 417 Informational Flyer
• Analysis of outfitting a Sheriff Deputy in 1980 vs 2026
• Protecting Your Tax Dollars

Arizona’s Annual Expenditure Limitation (AEL) is a state-established spending limit that affects how much the County can legally spend each year.

Arizona counties are constitutionally required to operate within annual expenditure limits, which cap how much can be spent from local revenues. These limits grow annually only with population and inflation, NOT with increasing service demands.

The limit applies even when:

• Revenues are already legally collected
• Funds are available in reserves
• Federal or State revenues increase

The spending limit dates to 1980, when Arizona voters approved a constitutional formula that limits how much counties can spend each year. The formula is based on what each county spent in fiscal year 1979-80.

Each year, the Economic Estimates Commission (EEC) adjusts each county’s limit based on:

• Population changes
• Inflation (GDP price deflator)

This formula has remained largely unchanged for more than 40 years.

NO. Adjusting the Annual Expenditure Limitation:

• Does not increase property taxes.
• Does not increase sales taxes.
• Does not create new fees.

The AEL formula is still tied to 1979-80 spending levels and is adjusted only for population growth and national inflation. However, over time, the formula has not kept pace with operational realities. For example:

• Over the past years, state-collected sales taxes shared with the County increased an average of 7.2% per year, while the expenditure limit increased an average of 3.5% per year.
• The County’s operating costs have grown faster than the formula’s population-and-inflation growth factor.

Many of the services and responsibilities local governments manage today did not exist in 1980, when the current expenditure limit framework was established.  These include cybersecurity, body camera programs, public records technology, election security, emergency management systems, broadband infrastructure, complex grant compliance requirements, and modern detention and public health standards.

State and federal mandates can require local governments to increase spending, even though the expenditure limit formula does not fully adjust to reflect those added obligations.

This challenge is particularly significant in Rio Rico.  Because Rio Rico is an unincorporated community within Santa Cruz County, it lacks a municipal government to provide city services.  As a result, the County must provide or coordinate many services, including roads, drainage, planning and zoning, code enforcement, law enforcement, parks, animal control, emergency coordination, and other community services.

As the Rio Rico area continues to grow, demand for these services also increases.  However, the expenditure limit formula does not adequately account for these expanding responsibilities and costs.

Santa Cruz County has operated within the existing limit by implementing efficiencies and making operational adjustments, but the limit is being approached, and additional capacity is now necessary to maintain consistent levels of service and investment as new industries establish in the County.

Santa Cruz County is asking voters to consider a Permanent Base Adjustment to the AEL.

A Permanent Base Adjustment would permanently update the County’s expenditure base (the starting point used in the formula).

According to county officials, the current constitutional expenditure formula may not fully reflect:

• Modern service demands
• Increasing public safety needs
• Inflation in labor and materials
• Infrastructure costs
• Border-region operational pressures
• Population and community needs

The County states the adjustment would help provide flexibility to sustain services and responsibly plan for the future.

Santa Cruz County is requesting voters to permanently increase the County’s expenditure base by $1,500,000, beginning in fiscal year 2027-2028.

This would not be a tax increase. It would change the legal spending limit calculation.

Budget oversight would continue. The County would still adopt a balanced budget each year through the public budgeting process and Board of Supervisors’ approval.

On July 8, 2026, the Board of Supervisors voted to place the measure on the November ballot for voters to decide on November 3, 2026.

If approved by voters:

• Santa Cruz County’s constitutional expenditure base would be permanently increased, and the Arizona Economic Estimates Commission would use the new base to calculate future expenditure limits.
• The County would retain local control and flexibility to address community needs and provide essential services based on local priorities and legally available revenues.
• Annual county budgets would still require public approval by the Board of Supervisors.
• Existing audit, transparency, and reporting requirements would remain in place.

If the measure fails:

• The current constitutional expenditure limit would remain unchanged.
• Future county spending would continue to be restricted by the existing formula.
• May result in reduced County services
• Delays or elimination of infrastructure projects
• Potential reduction in County workforce
• Hiring limitations
• Reduced capacity to respond to emergencies or community growth
• Program reductions or eliminations

1. Does this affect my taxes?

No. AEL limits spending, not revenue. A Permanent Base Adjustment does not increase property taxes, sales taxes, create new fees, or generate new revenue.

1. What is the Annual Expenditure Limit (AEL), in one sentence?

It is an Arizona constitutional formula that limits how much the County can spend each year, based on 1979-80 spending levels and adjusted annually for population and inflation.

1. What is Santa Cruz County’s current expenditure limit?

For Fiscal Year 2026, the County’s total budget is $156 million, and the state-set expenditure limitation is $30 million. This means the County’s total budget exceeds the state-imposed spending cap by $126 million. While certain expenditures are exempt, most core services count toward the cap.

1. What is the effect of the expenditure limit on County services?

The County has been able to operate within the existing expenditure limit by implementing efficiencies and adjusting services, like issuing debt to pay for Capital Improvement Projects and leasing equipment & vehicles, but the expenditure limit has been reached, and additional capacity is now necessary to maintain consistent levels of service and investment in the County.

1. Why does the expenditure limit exist?

Voters implemented an expenditure limit in response to high inflation, slow economic growth, and high unemployment in the late 1970s. Voters sought to impose a limit requiring local governments to practice fiscal constraint based on conditions at the time.

1. Why doesn’t the formula keep pace with Santa Cruz County’s actual growth?

The formula does not account for changes in service expectations, modern public safety equipment and technology, local construction and labor costs, infrastructure demands, regulatory requirements that did not exist in 1980, and cross-border population that impacts services.

1. How much would the County’s base change if voters approve?

The County is requesting a permanent increase of $1,500,000 to the 1979-80 expenditure base, beginning in fiscal year 2027-28.

1. What types of spending count toward the limit?

Many core County services and operations count toward the limit, including roads, criminal justice, law enforcement, public safety, emergency response, public works, health services, facilities management, and general government.

1. What spending is exempt?

Certain expenditures do not count toward the AEL, including debt service payments, grant-funded projects, some capital improvements, and investment earnings.

1. Would the County immediately increase spending?

No. Spending within the adjusted limit would increase only as revenues become available. The County will continue to operate with a balanced budget set by the Board of Supervisors each year.

1. Have other counties adjusted their expenditure base?

Yes. Multiple Arizona counties have adjusted their expenditure base, including recent voter-approved changes in Yavapai and Coconino counties. Additionally, 84 of 91 Arizona cities and towns have increased their expenditure limits.   Pima and Yuma counties currently have measures on the November ballot.

1. What measures has Santa Cruz County taken to be fiscally responsible?

Santa Cruz County is committed to strong fiscal stewardship and transparency.  The County has implemented conservative revenue forecasting and disciplined budgeting methods to deliver services effectively and efficiently. These practices include careful analysis of actual financial activity, ongoing cost-allocation planning, and adherence to state and federal financial requirements.   

1. Has the County taken steps following the former Treasurer embezzlement case?

Yes.  After discovering the embezzlement by the former elected Treasurer, the County requested that a new, fully independent external audit firm conduct audits moving forward.  The County also initiated an internal review of existing financial controls and cash-handling procedures across all departments to improve transparency and strengthen interdepartmental oversight.  In addition, the Board of Supervisors hired an independent CPA firm to review the Treasurer’s monthly reconciliations and perform ongoing cash reviews, adding an extra layer of independent verification to ensure accuracy, accountability, and early detection of irregularities.  To read more about the measures taken, visit Protecting Your Tax Dollars.

The Arizona Daily Star reported Sunday, Aug. 23 on federal plans to expand the temporary Border Patrol checkpoint on Interstate 19, near Amado, into a much larger, permanent checkpoint facility adjacent to the highway 

Here’s what you need to know:

• Santa Cruz County officials and local residents told the Star they oppose the U.S. Customs and Border Protection’s planned expansion onto 17 acres east of the highway. Many say the existing checkpoint is unnecessary and already deters tourists from visiting the historic communities of Tubac and Tumacacori, south of the current checkpoint. Residents also worry the expansion plans threaten Tubac’s international “dark skies” designation, and could harm property values and the environment. It also forces fresh produce exporters from Mexico to undergo a second screening, 25 miles north of the one they underwent at the U.S.-Mexico border.
• A listing on a Department of Homeland Security portal that records major contracting projects shows CBP plans to spend between $50 million and $100 million on expanding the I-19 checkpoint. A letter CBP sent to Santa Cruz County manager Jesus Valdez asked for local officials’ input on the project by Aug. 29.
• The proposed expansion is one of several similar projects DHS has listed on its “Acquisition Planning Forecast System” portal, including two Border Patrol checkpoint expansions planned in Texas and one in New Mexico. In March, CBP also reached out to the nonprofit Arizona Land and Water Trust to inquire about buying 14 acres of the trust’s land near an often-unmanned Border Patrol checkpoint, west of I-19, on West Arivaca Road. The nonprofit trust, which purchased the Sopori Farm property in question for conservation purposes, has declined to sell to CBP, the trust’s executive director told the Star.

https://tucson.com/news/local/border/article_522a9569-d127-4396-8b22-85faa9c5e927.html