When Prescott residents voted to pass Prop. 443 in August 2017, there’s a good chance they had no way of knowing that positive vote would significantly cut down the City’s unfunded liability. At the time, the Public Safety Personnel Retirement System (PSPRS) debt amounted to $86.4 million. Today, it is barely over $69 million, a decrease of $17 million due to funds generated through the 0.75 sales tax, which went into effect a year ago January.
Prescott Mayor Greg Mengarelli is pleased with the pay down.
“Without the life-giving stream of funding from Proposition 443, we would still be wandering around in a very dry desert,” he says. “But now, because of the strong support of our Prescott citizenry in passing Prop. 443, our City can continue to move forward in a strong financial position. Prop. 443 provided the funds. Without those funds, it would be no fun.”
City of Prescott Budget and Finance Director Mark Woodfill told the council that the drop could be attributed to two reasons: a $6 million payment that was generated through the first six months of the new sales tax; and an $11 million lump sum made in September 2017.
Prescott Mayor Pro Tem Billie Orr says passing Proposition 443 was clearly the catalyst for removing the dark cloud of the $86 million unfunded pension liability hovering over the City. “Our commitment to paying down this debt and retiring the three-fourths tax is solid,” she notes. “We’ll pay every dime of the revenue from Prop. 443, and we’ll continue to pay the annual required contribution from the general fund. We are forever grateful to citizens of Prescott who voted to pass Prop. 443.”
Councilman Steve Sischka is equally as enthusiastic about the diminishing debt. Further, he attributes the positive result of Prop. 443 with stimulating other economic development. “Without 443, the airport would have been an afterthought, with no way to pay for our share of the improvements,” he says. “I also don’t think Skywest/United Express would have come to a financially strapped city. Prop. 443 opened up a world of options for Prescott.”
The City Council’s goal is to pay down the liability by June 30, 2028. The 0.75 sales tax is scheduled to cease when the PSPRS unfunded liability is at $1.5 million, or in 10 years, whichever comes first.