VOTE YES ON HOME RULE - PROPOSITION 400 , THE ALTERATIVE BUDGET LIMITATION
Home Rule in Sedona Proposition 400 Alternative Budget Limitation
This is your trusted resource for Sedona's Home Rule election facts.
Home rule: the foundation of sedona
About Sedona Home Rule
If you recently moved to Sedona, you may notice that every four years, residents vote on something called Home Rule.
The July 21 vote is simply about who controls Sedona’s city budget.
What Is Home Rule?
Home Rule allows the City of Sedona to decide how to spend the revenue it already collects to provide city services.
Without Home Rule, Sedona would be forced to follow a state spending formula created in 1979.
Arizona law requires voters to renew Home Rule every four years.
Is Home Rule a Tax Increase? No.
Home Rule does not raise or create new taxes.
It does not:
- Raise sales tax
- Raise the bed tax paid by visitors
- Create a property tax (Sedona has none)
It only determines whether Sedona can use the money it already collects.
Where Does Sedona’s Revenue Come From?
About 70-80% of the city’s revenue comes from visitors, mainly through:
- Sales tax from tourism
- Hotel bed taxes
Residents of the City of Sedona pay a smaller portion of the total budget, mostly through normal sales tax (3.5%) on purchases in town and online, but not on food purchased at a grocery store.
And this is for city residents, not those living outside the limits in the county, like the Village of Oak Creek or Oak Creek Canyon, which have a Sedona postal address but are not in the city limits. They do pay into the city’s treasury if they actually buy a product at a Sedona-based business, like a restaurant. But if they buy online, such as on Amazon, or their utility bills, the city of Sedona does not receive one cent.
And remember, the City of Sedona does not have a property tax as a source of income. The School District and Fire District do, but not the city. That is why sales and bed tax are major sources of income for the city’s operations. What Happens if Home Rule Passes?
Sedona continues to fund normal city services such as:
- Police and public safety
- Road maintenance
- Transit and traffic programs
- Parks and recreation
- City planning and administration
- Support for local non-profits like the Sedona Public Library, Meals on Wheels, the Humane Society, and the Food Bank
What Happens if Home Rule Fails?
If Home Rule does not pass, Sedona must follow a state spending cap based on the 1979 budgets.
That limit would allow the city to spend about $15 million — roughly 80% less than today’s budget. The city would be able to pay some current ongoing legal debts, such as bonds, above and beyond this $15 million limit. But in the end, the current 2026 budget of around $100 million would be cut by about 70 million. Which means many ongoing infrastructure projects could, and would probably be halted.
The city would still collect the same taxes, but much of that money could not legally be spent. It would just sit in the bank, probably earning minimal interest.
To comply with the cap, the city would likely have to reduce:
- Police staffing
- Road maintenance
- Transit services
- Parks and recreation
- City staff and services
- Funding for community non-profits
What the July 21 Vote Means
The vote comes down to one question:
Should Sedona control how it spends its own revenue, or should spending be limited by a state formula from 1979?
Vote YES
- Keeps local control of the city budget
- Allows Sedona to use the revenue it already collects
- Maintains city services and programs
Vote NO
- Major reductions in services are likely
- Tax revenue is collected, but much of it cannot be used
Home Rule is about local budget control — not raising taxes.
Please vote YES on Home Rule in the July 21 election here in Sedona.
And remember, Home Rule is referred to as: “The Alternative Expenditure Limitation” on the ballot.
Frequently Asked Questions regarding Home Rule
In the July 2026 election, you will have the opportunity to vote on the City of Sedona's Home Rule Option, which allows the City to set its own maximum budget spending level each year.
What is the history and background of Home Rule?
In 1980, Arizona voters approved a tax reform package that was added to the Arizona Constitution. This reform limited what cities and towns could spend in their annual budgets and gave the State the authority to impose spending limits. There are three options available to counties and cities for budget limitations: the State-set limit and two alternative spending limit methods discussed below.
What are the Limitations and Alternatives?
Three possible limits are included in the legislation passed in 1980.
These are:
State Expenditure Limitation.
This limit is based on a city or county’s 1979/80 budget adjusted for growth in population and a state-wide inflation factor. This limit does not apply to debt service payments or to grant-funded programs/projects.
Permanent Base Adjustment.
This alternative, which requires a vote only when it needs to be increased, allows a city or county to “permanently” increase the base budget assumption. Instead of using the actual 1979/80 budget amount, voters adopt an adjustment to increase that base. The same population and inflation factors are then applied to establish the expenditure limit.
Home Rule.
This alternative, which requires a vote every four years, allows a city or county to set the expenditure limit annually, based on the adopted budget. No population or inflation factors apply.
As of 2026, 90% of Arizona's cities use either a Permanent Base Adjustment or Home Rule.
If Home Rule doesn’t pass, will my property tax bill go down?
No. First, the expenditure limitation has no impact on taxes; second, the City of Sedona does not levy a property tax. While Sedona property owners pay property taxes, these taxes are County, School District, Fire District, and Community College levies, depending on which county you live in.
If Home Rule doesn’t pass, will other taxes go down?
No. The State Limit does not apply to revenue. Revenue would still be collected; it would not be available to spend.
If Home Rule passes, will taxes and fees increase?
No, Home Rule does not affect taxes or any other source of revenue for the City. The limitation applies only to spending the money, not collecting it.
What changes if Home Rule passes?
If Home Rule passes, the Sedona City Council will continue to set the budget limit locally, as it has for the last 30 years, considering all available financial resources and addressing community needs and priorities.
The limitation on the budget set by the 1980 legislation is often misunderstood as a limit on the levy of taxes, charges for services, and other fees. It is not. The limit allows for the collection of all the same revenue; it only limits how the money is spent.
What happens to Sedona’s budget if Home Rule does not pass?
If Home Rule does not pass, Sedona would operate under the State Limit, which will automatically set the City’s annual budget limit using the formula created in 1980, adjusted to allow for debt service, grant-funded programs, and projects. Based on Fiscal Year 2026 figures, the City’s annual budget would have been a maximum of $15.4 million dollars. The adopted budget for FY26 is $103.5 million, of which $87 million is subject to the limit. The budget would have to decrease by more than 80% overall.
Community Assistance Fund
The calculation is below.
State-estimated 1979/80 Sedona “Base” Budget: $2,960,687
x FY 25/26 Population Growth Factor : $1.3886
x FY 25/26 State-Wide Inflation Factor : $3.7558
= FY 25/26 State-calculated expenditure limit : $15,411,542
Sedona FY26 Adopted Budget - $ 103,291,695
Sedona estimated debt service, pass-through and grant-funding ($16,280,895)
Sedona Budget Subject to Limit : $ 87,010,800
* 2,960,687 x 1.3860 x 3.7558 = $15,440,882; State published limit = $15,411,542
How would the budget be cut if the State Limit were used?
Some municipal functions are required, and others are desirable, but not legally required. Only legally required services would be funded.
Legally required services include the City Clerk, City Council, Police operations, Wastewater services, the Municipal Court, streets, stormwater and facility maintenance, and planning, permitting and code enforcement. For FY26, these required functions cost approximately $25.5 million, $10.1 million over the budget maximum under the State Limit, meaning that 60% of required functions could be funded.
Services like Parks & Recreation, Sustainability, Housing, Arts & Culture, Transit, Boards & Commissions, Communications, Finance, IT and the City Manager, as well as capital improvement projects would not be funded.
If Home Rule doesn’t reduce taxes or fees, what happens to the revenue collected if Home Rule does not pass?
While the State Limit controls the amount of funds that a city may spend, it does not change the amount of revenue that can be collected or received. All City revenue, such as sales tax, would still be collected, and would be deposited into City accounts. The funds would be unavailable for at least two years.
Where can I learn more about Home Rule?
The City of Sedona will hold two open public forums at City Hall in June 2026 to answer questions about Home Rule. The meetings will be live-streamed at sedonaaz.gov/councillive.
City Council will hold two public hearings regarding Home Rule on February 24, 2026 and March 10, 2026. The hearings will be live streamed at sedonaaz.gov/councillive.
Where and when do I vote on Home Rule?
You can vote by mail or in person on July 21, 2026, from 6 AM to 7 PM at your precinct polling place or vote center. Please check with your County to confirm the location of your precinct polling place or the nearest vote center.
If you have any questions, please contact the City Clerk’s office at (928) 282-3113.
This information is being disseminated in order to educate voters about the Alternative Expenditure Limitation. Further information can be obtained from the State of Arizona Office of the Auditor General website.
A yes, vote is a vote to continue Home rule
A no vote is a vote for the state imposed expenditure limit
What is the alternative to Home Rule elections every 4 years
it's called a Permanent Base Adjustment
There is an alternative to Home Rule called the Permanent Base Adjustment, or PBA. This would have to be approved by the voters.
Many cities in Arizona have a PBA instead of Home Rule elections every four years. This would set a maximum city budget substantially higher than current budgets, taking into account inflation and other expected additional expenses.
Some advocate pursuing this as the correct path in an election in 2028 or later for a PBA in Sedona to end the every 4-year election for the Home Rule election. This would require extensive study and analysis to determine the appropriate PBA for Sedona.