Today: Jun 04 , 2020

Prop 443 is Working!

18 April 2018   Mayor Pro Tem Billie Orr
Folks of all ages rallied together to find a solution to the PSPRS dilemma. Lynne LaMaster

Tackling Prop 443 created a thorny debate in the City of Prescott. But the voters had the last word.

One of the primary Strategic Plan goals for the Prescott City Council has been to stabilize our General Fund, despite what I have called a “dark cloud” of a $78M Unfunded Liability debt created by the Public Safety Personnel Retirement System (PSPRS). Previous City leadership had struggled with how to pay the Annual Required Contribution (ARC) while maintaining much needed services that create our special quality of life in Prescott. City staff was reduced, library hours were cut, fire stations were browned out and our police department was understaffed. City staff turnover was very high. There was a feeling that our community was crippled by this burden.

Some were even calling for bankruptcy.

Early spring 2017, the City Council decided to refer a ballot question to the voters of Prescott, asking them to consider a 3/4 of a cent sales tax increase to be dedicated solely to paying down the PSPRS Unfunded Lability. The sales tax question was placed on the August 29 ballot. An important next step was the creation of Stand For Prescott, a group of diverse, highly motivated, and committed citizens. Their goal was to raise money and educate the voters about the need to pass Proposition 443.

After much debate and many, many informative community meetings, Prescott voters approved Proposition 443, raising our city sales tax by 3/4 of a penny beginning in January 2018. Once Prop 443 passed, the City Council felt confident in using some of the General Fund reserves to make a large payment of $11 Million to PSPRS in September 2017. The city also sold assets totaling over $600,000 in order to pay more toward the Unfunded Liability debt. The city has continued to make the ARC, and as of March 25, 2018, $5,319,758 has been paid from the General Fund. The budgeted ARC payment for Fiscal Year 2018 is $7,757,329, and of this amount, $7.2 million will come from the General Fund.

Photo by Deb Gallegos, Making a Scene Productions.

The city was recently notified that the January revenue generated by the 3/4 cent dedicated PSPRS tax from passing Prop 443 was $910,298. Those monies were immediately used to pay toward our unfunded liability. The total contribution to PSPRS in FY18 as of March 25, 2018 is $17,834,681. 

On a monthly basis, we will send the revenue generated by the 3/4 cent dedicated sales tax, and will do everything we possibly can to continue paying the ARC out of the General Fund. This dedicated sales tax will sunset in 2028 or when the unfunded liability reaches $1.5M, whichever occurs first.

We encourage our state legislators to live up to their side of the bargain and to seek further reforms to the PSPRS system, making it more sustainable for our public safety personnel for generations to come. Those reforms can only be made through laws passed by the Arizona State Legislature.

Photo by Deb Gallegos, Making a Scene Productions.