Arizona requires school districts to hold elections for issuing new bonds or to override a school district budget. School districts are given up to five percent to override on a school district budget. Any override over five percent needs voter approval. Override is similar to exceeding a levy limit which is commonly called in other states. Arizona laws require school districts to have a substitute budget on hand in the event a budget override measure gets defeated. Arizona also has a debt limit protected by the Arizona Constitution with regular school districts having a six percent debt limit while unified school districts have a thirty percent limit based on the district's total value of taxable property.
A controversy arose in the city of Prescott in late 2009 when residents tried to have an initiative placed on the November 3, 2009 ballot. The issue stemmed from the necessary signatures needed to put the initiative up for a public vote. City Clerk Elizabeth Burke told petition gatherers that they needed to get 2,058 signatures. This number represented 15 percent of the voters in the previous election. However, Gary Kidd, the City Attorney, disputed that the effort required at least 25 percent of voters' signatures.
The dispute began when officials pointed out that there was conflicting initiative procedures between the Arizona Constitution and the state statute. The initiative could appear on the November ballot, but legal action could be taken afterwards.
A letter from Councilwoman Lora Lopas can be read here, along with other case-related document. In her letter, Lopas described her discontent with the way the situation on this issue was handled.