Rim Towns Gain From Winning State Lawsuit

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Payson and Star Valley came into small windfalls recently thanks to a Arizona Supreme Court ruling — but don’t expect any spending sprees.

Payson’s bottom line for the current fiscal year brightened by $75,000 and Star Valley’s by nearly $10,000 after the Arizona League of Cities and Towns last week won its $30-million lawsuit against the state legislature.

Both towns intend to bolster reserves with the money — which are all but non-existent in Payson but still sizeable in Star Valley.

“We’re going to hold onto it,” said Mayor Kenny Evans of the money, which the town had included as an expense in the current budget. “We’re already preparing for next year’s budget and our concern is that we have no rainy day fund. Prudence suggests we not go on a spending spree.”

The towns had banded together and filed suit after the state legislature took back $30 million in promised shared revenue at the tail end of the last fiscal year, which ended last June. The legislature jerked back the money late in the fiscal year after many cities had already spent it.

The League of Arizona Cities and Towns argued that the mid-year requirement the local jurisdictions “contribute” the legally promised money was unconstitutional.

The Supreme Court agreed, saying that the legislature violated article 4, part 2, section 20 of the Arizona Constitution. The court said the towns therefore didn’t have to pay the $30 million. However, the justices did not award the cities attorney’s fees — since another provision of the law prohibits towns from collecting such fees.

The legislature could pass new laws giving it the right to take much of the money in dispute and more, noted Evans.

Evans noted that the law at present requires the state to share 15 percent of the revenue from local taxes like sales tax with the cities and towns. In the last fiscal year, the state actually shared 17 percent. The $30 million came from the attempt by the legislature to cut back to the 15 percent minimum, said Evans. Current projections suggest that Payson could lose $100,000 if the legislature cuts back to the bare minimum.

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