A town can have money in the bank and still face limits on spending it.
That is the question behind Proposition 456, the “Home Rule” measure Pinetop-Lakeside voters approved in the November 3 election. Home Rule lets the town set its spending limit through its annual budget process instead of using the state’s formula.
It does not create money, raise a tax, or approve every future expense.
Navajo County’s November 9 unofficial tally showed 1,153 votes for the measure and 710 against—about 62 percent approval. In a November 12 email to Upland Folio, Town Clerk Lisa Mears said the Town Council is scheduled to canvass the election at its November 19 meeting.
So what did voters authorize?
One proposition, two names
The familiar name was missing from the proposition’s text in the county election insert. Instead of “Home Rule,” it referred to an “alternative expenditure limitation.”
One resident who agreed to speak anonymously said they voted yes “because the town is climbing out of a hole and needs some leeway.” During the conversation, the resident needed an explanation connecting Proposition 456 with Home Rule.
That exchange illustrates how the proposition number and its familiar name can become disconnected. It does not tell us how other voters understood the measure or establish the town’s financial condition.
What voters were given
Mears supplied Navajo County’s election insert in response to a request for the wording voters received. The document labels itself a sample ballot. Its Proposition 456 text reads:
Proposition 456 ballot language, including the official and descriptive titles and the effects of YES and NO votes. Source: Navajo County election insert, supplied by Town Clerk Lisa Mears.
Read the Proposition 456 ballot wording (accessible text)
PROPOSITION 456
Proposal submitted by the Town Council of Pinetop-Lakeside, AZ
Official Title:
A Resolution proposing an extension of the alternative expenditure limitation for the Town of Pinetop-Lakeside, Arizona.
Descriptive Title:
Pursuant to the Arizona State Constitution, this proposal establishes an alternative expenditure limitation for the Town of Pinetop-Lakeside for the next four years. Annually, the Town Council will determine the amount of the alternative expenditure limitation for the fiscal year after at least one public hearing. This alternative expenditure limitation replaces the state-imposed expenditure limitation.
A “YES” vote shall have the effect of establishing an alternative expenditure limitation for the Town of Pinetop-Lakeside.
A “NO” vote shall have the effect of not allowing the Town of Pinetop-Lakeside to establish an alternative expenditure limitation and to require expenditures of the Town to be limited by the State-imposed expenditure limit.
YES
NO
In plain language: a yes vote lets the council set the town’s annual spending limit through its public budget process. A no vote would require the town to operate under the state-calculated limit, with the exclusions allowed by law.
What Home Rule does
Arizona’s Constitution limits how much local governments can spend. The state formula generally uses spending in the 1979–80 fiscal year as its base and adjusts for population and inflation. Special provisions address communities incorporated later and changes in governmental responsibilities.
The same constitutional section allows voters to approve an alternative expenditure limit. Commonly called Home Rule, it gives a community another way to establish its spending authority.
According to the town’s Home Rule publicity pamphlet, Pinetop-Lakeside’s renewed authorization covers fiscal years 2027–28 through 2030–31. Each year, the council must determine the spending limit after at least one public hearing.
Mayor Taber Heisler, who supported the measure, described it as allowing the community, through its elected council, to decide how much available revenue can be spent through that process.
“It does not increase taxes, generate additional revenue, or give the Town unlimited spending authority,” Heisler wrote in response to Upland Folio’s questions.
The council still must adopt a budget. Available resources, the adopted budget, and other legal restrictions still govern spending.
The vote settles how the spending limit will be set. Whether a particular purchase, project, or staffing decision is worthwhile remains a question for the budget process.
Does a yes vote raise taxes?
The town’s published explanation of Proposition 456 says the measure does not increase taxes. The proposition authorizes a different spending limit; it contains no tax increase.
Revenue is a separate question. Taxes, fees, grants, and other sources bring money in. Home Rule does not make those sources produce more money simply because voters approved it. Any future tax or fee proposal must follow the procedures that apply to that proposal.
A town needs both money available for an expense and legal authority to spend it.
If Home Rule had failed, where would the money go?
Money already held by the town would not automatically disappear, go back to the state, or become a refund to taxpayers.
The town’s publicity pamphlet identifies fiscal year 2027–28 as the first year covered by this renewal. Rejection would have required the town to fit spending covered by the state limit within that calculation beginning that year.
The Constitution allows exclusions for certain expenditures, so the state limit is not a simple cap on every dollar leaving town accounts.
Heisler cautioned against treating the difference between the town’s two projected spending limits as money it would lose—or save—each year.
Heisler said the town projected roughly $23.5 million in available revenue for fiscal year 2027–28, including grant and capital-project funding. Estimated spending authority under the state limit, including applicable exclusions, was about $10.2 million.
“It represents a difference in legal spending authority,” he wrote.
Based on historical revenues, excluding much of the grant and project-related funding, Heisler estimated that approximately $1.8 million to $2 million annually could have been collected but unavailable to spend under the state limit. He said the amount would vary with revenue collections and applicable exclusions.
“Revenue that exceeds the expenditure limitation does not disappear; it remains with the Town,” he wrote.
Whether and when that money could be used later would depend on the spending limit, the revenue source, and any restrictions attached to it. Grants can also carry deadlines or repayment requirements.
The Arizona Auditor General’s expenditure-reporting guidance, which Mears referred Upland Folio to, explains how particular revenues and carryforwards are treated. Carrying money forward does not automatically make it available for any purpose or exempt it from future limits.
Heisler pointed to the recent flooding and infrastructure damage as an illustration of his concern about having money available but potentially lacking authority to use it.
“With the recent flooding and infrastructure damage our community has experienced, I think people can appreciate why having financial resources available and having the legal ability to use them are two very different things,” he wrote.
Money in the bank is not all interchangeable
Two questions matter: How much can the town spend? And what can each source of money pay for?
Consider HURF, the Highway User Revenue Fund.
Arizona’s Constitution restricts highway-user revenues to specified highway and street purposes. Those dollars cannot simply be moved into an unrelated program because that program needs money. State law also prohibits cities and towns from using HURF distributions for traffic enforcement.
That does not mean HURF can never pay employees. Eligible road work includes labor. The distinction is what the employee is doing: qualifying street work can be an eligible cost; unrelated duties cannot be charged to the fund simply because the employee works for the town. An employee who divides time between eligible and unrelated duties cannot have all that time treated as road work.
The same principle applies to other restricted money. A grant for a particular project is not necessarily available to cover a different service or a general budget shortfall.
Home Rule does not remove those restrictions. A restriction on a fund’s purpose and an exclusion from the state spending limit are separate rules.
What would residents have noticed?
Heisler said rejection would have required the council to put essential services ahead of other spending.
“I believe we could have continued providing many of our essential services, at least initially,” he wrote.
Capital improvements, infrastructure projects, discretionary programs, and projects requiring local matching funds could have been delayed, reduced, or eliminated, he said. These are possible consequences he identified, rather than a list of adopted cuts.
Grant funding would not necessarily have solved the problem. Heisler noted that some grant-funded expenditures are exempt from the state limit, but a project may also require local money. The town would still need both the funds and the spending authority for its share.
Explaining it—and questioning it
Questions about understanding Home Rule predated the election.
In a June 13 report on the June 4 council meeting, White Mountain Independent reporter Toni Gibbons described Town Manager Kristi Salskov’s concern about misunderstanding the measure. Gibbons also reported that former council member Lynn Krigbaum planned to knock on doors to discuss it. Upland Folio has not established whether that outreach took place or what residents said.
The town published explanatory materials, and local real-estate agent Shawn Wirtz published an explainer of his own. Wirtz and this article’s author work in the same real-estate office.
Those efforts are part of the record of outreach. Their existence does not tell us how many voters they reached or what voters took from them.
Understanding Home Rule also does not require supporting it.
Another resident, who permitted anonymous use of their written comments, offered a different emphasis: “live within your means.”
That concern belongs alongside the explanation of Home Rule. Voters decided how the town’s spending limit would be set. Whether each expense is affordable and worthwhile remains a question for the annual budget process.
What happens next?
The next place to watch is the town budget—and the financial reports presented throughout the year.
Heisler said the town’s new finance director has introduced a monthly financial report at council meetings. He described a traffic-light system intended to help residents and council members see whether revenue and spending are on track for that point in the fiscal year.
Those reports offer a place to ask questions: What is ahead of budget? What is falling behind? Does a difference reflect timing, an unexpected expense, or a longer-term problem?
Heisler encouraged residents to follow the reports and watch how the council prioritizes projects, uses reserves, and considers future costs.
“Just because we have the authority to spend money does not mean we should spend it,” he wrote.
Mears said budget work sessions will appear in the town’s Agenda Center once scheduled. The council generally meets on the first and third Thursdays of each month, and meetings are livestreamed.
Residents can ask how a proposed expense will be paid for, whether the money has restrictions, what alternatives were considered, and how much the commitment will cost in later years.
Home Rule gives the council flexibility. The public budget process—and the decisions residents can follow throughout the year—will show how it uses that authority.
Disclosure: The author previously served on Pinetop-Lakeside’s Planning and Zoning Commission.