Pinal County Transportation Excise Tax

This report addresses the extent to which the transportation excise tax has helped solve Pinal County’s transportation problems. Approved by Pinal County voters in 1986, this tax was intended to provide "additional funding for the construction, reconstruction, maintenance, repair and roadside development of County and town roads, streets and bridges." In the first 10 years of its 20-year existence, the excise tax has generated nearly $40 million in revenues for roads and highways in Pinal County. However, actual revenues have fallen short of projected revenue by at least $1 million each year since 1988 and over $2 million each year since 1993. Consequently, excise tax revenue, which was projected to yield a total of $61 million from fiscal year 1987 to fiscal year 1997 to assist the County, cities, and towns with their road needs, has reached only $40 million, or about 65 percent of projections.

Despite the shortfall in revenues, the Pinal County Department of Civil Works has expended 90 percent of its share of excise tax revenues on new road construction and reconstruction projects. On the other hand, an analysis of road fund revenues and expenditures for the eight cities and towns within Pinal County reveals that many are not using all the "additional monies" the excise tax was intended to provide, with most spending 60 percent or less of their excise tax revenue. Moreover, three municipalities have inappropriately borrowed transportation excise tax and other road money from their road funds primarily to pay for general and enterprise fund expenditures and expenses. While one entity has since repaid the monies borrowed, as of June 30, 1997, the second municipality had an outstanding balance of $419,150 and the third municipality had an outstanding balance of $24,429.