ARIZONA

MONTHLY FISCAL HIGHLIGHTS
April 2004
General Fund revenue collections were very strong in April. The state collected $759.2 million, which was 21.9% above April
2003. The growth in revenues was broad based: sales tax was up 13.4%; corporate income collections increased 15.9%; and
individual income estimated and final tax payments rose by 19.8%. After making adjustments for one-time monies, year-to-date
collections are 8.9% higher than last year.
April collections result in a year-to-date surplus of $150.7 million above the JLBC’s January forecast estimates. The recently
approved budget, as transmitted to the Governor, assumed a FY 2004 forecast level equivalent to the Governor’s budget, which was
$78.0 million above the January estimates. The budget also includes “triggers,” which dedicate revenue for certain purposes above
the $78 million level.
The actual enactment of the FY 2004 triggers will depend on revenues through the end of June. If the current revenue surplus holds
for the remaining two months of the year, we would end $72.7 million above the “transmitted” budget forecast (the difference
between the current $150.7 million surplus and the budgeted $78.0 million surplus). This level of surplus would result in the
enactment of the first set of triggers, which would add a total of $50.0 million in funding for School Facilities Board Building
Renewal, Child Care and State Employer Health Insurance charges. Additional triggers would also be enacted if revenues further
exceed the forecast during the rest of FY 2004 and the first 6 months of FY 2005.

April
Year-to-Date
1/
2/
3/
4/
5/

General Fund Revenues
Compared to Original and Revised FY 2004 Forecasts and FY 2003 Collections
($ in Millions)
FY 2004
Difference From
Difference From
Difference From
Difference
Collections
6/03 Forecast 1/
1/04 Forecast 2/
5/04 Forecast 3/
From FY 2003 4/
$ 759.2
$ 111.6
$ 94.4
N/A
$ 130.8
$ 5,327.7

$ 325.3 5/

$ 150.7

$ 72.7

$ 451.0

Original FY 2004 forecast (June 2003).
Revised FY 2004 forecast (January 2004).
Revised FY 2004 forecast (May budget transmitted to Governor).
Excludes federal cash assistance grant, URS, judicial enhancement and amnesty deposit.
By the end of the fiscal year, amnesty may generate an additional $22 million above the original budget forecast.

Sales Tax revenue in April increased by 13.4% (based on
preliminary numbers), bringing the year-to-date growth rate
up to 8.5%. Due to its new computer system, the Department
of Revenue does not have final April receipts.
Individual Income Tax collections in April were significantly
above last year. Withholding tax collections were slightly
lower than last year, decreasing by $1.4 million or (0.7)%.
However, estimated payments were up $9.2 million over last
April, and final payments were up $44.1 million. In addition,
refunds were $36.3 million less than last year, a 14.8%
decline.
Some growth in estimated and final payments was expected
due to underwithholding in the first half of the fiscal year, but
the 19.8% increase in estimated and final payments clearly
exceeds that level. The size of the increase may be due to the

growth in taxation on capital gains as the economic recovery
continues.
Corporate Income Tax revenue increased by $13.4 million in
April compared to last year. Year-to-date corporate income
tax revenue was almost 25% above last year’s results.
Recent Economic Indicators: The statistics on the economy
showed steady improvement. U.S. Gross Domestic Product
(GDP) continued to expand at a rapid clip in 2004’s first
quarter. Inflation-adjusted GDP increased 4.9% from the prior
year, with defense expenditures and equipment and software
investment among the leading categories. Additional evidence
surfaced in the high-technology manufacturing sector. U.S.
Semiconductor Billings (three-month moving average)
surged almost 5% from the prior period and stood more than
25% higher than a year ago.

JLBC
This report has been prepared for the Arizona Legislature by the Joint Legislative Budget Committee Staff on May 26, 2004. This report can also be
found on our Website at http://www.azleg.state.az.us/jlbc.htm
Page 1

Joint Legislative Budget Committee

Monthly Fiscal Highlights – April 2004

Rising consumer confidence reflected the economy’s growing
strength. The Conference Board’s Consumer Confidence
Index increased to 92.9 in April, a 5 percent jump from
March. The improvement was fueled by a better assessment
of current conditions and by rising expectations for future
growth.
The nation’s Index of Leading Economic Indicators edged
up 0.1% in April. Building permits and stock prices were
among the positive contributors.
Meanwhile, the U.S.
Consumer Price Index (CPI) was pushed higher by rising
fuel costs. The energy component soared at a 28.3% annual
rate through the first four months of 2004. Overall, the CPI
(three-month moving average) advanced just 1.9% from a year
ago.
The state economy continued to post steady gains. The
Arizona Business Conditions Index (BCI) jumped 5.1% in
April, with delivery times, employment, and inventories
pushing the index higher. The Arizona Tourism Barometer
reached its highest level since September 2001. February’s
99.6 reading reflected a 5.1% improvement over the previous
twelve months.
Arizona personal income totaled $153.7 billion (seasonally
adjusted annual rate) during fourth quarter 2003, which
yielded an annual increase of 5.8%. The state’s 2.0%
quarterly gain ranked fourth in the nation.
The Arizona unemployment rate increased from 4.9% to
5.4% in April due to an unusually large influx of job seekers

into the labor force. At the same time, the state’s employers
were adding workers to their payrolls. Overall, non-farm
employment increased 2.5% on a year-over-year basis, with
construction and health care contributing much of the increase.
The Arizona Index of Leading Economic Indicators dipped
(0.2)% in March. Hours worked in manufacturing and
sensitive materials prices were among the factors that pushed
the index lower.
The most recent statistics from AHCCCS and DES continue to
show declining enrollments. The number of acute-care
AHCCCS clients declined (2.2)% during the last three
months and stood (7.8)% below the budgeted level. The
Proposition 204 caseload decreased (2.2)% during the latest
three-month period, but the number of clients remained 9.4%
higher than a year ago.
The number of TANF recipients (three-month average)
declined to 121,131 in March, a (4.9)% drop from the previous
three months. The caseload was (1.1)% below last year’s
level and (4.7)% below the forecast, but average payments per
client were 6.1% above the forecast for the year to date.
The Department of Corrections’ inmate population (threemonth average) expanded by an average of 173 inmates per
month from February through April, which was well ahead of
the budgeted rate of 118 new inmates (net) per month. The
head count was bolstered by an unusually large number of
inmates entering the system in March.

RECENT ECONOMIC INDICATORS
Indicator
Arizona
-Unemployment Rate
-Jobs
-Contracting Tax Receipts (3 month average)
-Retail Sales Tax Receipts (3 month average)
-Arizona Tourism Barometer
-Leading Indicators Index
-Business Conditions Index
(>50 signifies expansion)
-Arizona Personal Income
-AHCCCS Recipients (3 month average)
Regular
Proposition 204
-TANF Recipients (3 month average)
-DOC Inmate Growth (3 month average)
U.S.
-Gross Domestic Product
-Consumer Confidence Index
-Leading Indicators Index
-U.S. Semiconductor Billings
(3 month moving average)
-Consumer Price Index
(3 month moving average)

Current Value

Change From
Prior Period

Change From
Prior Year

April
April
January-March
January-March
February
March
April

5.4%
2.348 million
$46.0 million
$138.0 million
99.6
124.2
66.0

0.5%
0.4%
(2.6)%
12.4%
2.6%
(0.2)%
5.1%

(0.5)%
2.5%
13.2%
8.6%
5.1%
4.1%
32.6%

4th Quarter 2003

$153.7 billion

2.0%

5.8%

February-April
January-March
February-April

563,560
169,590
121,131
31,661

1st Quarter 2004
April
April
January-March

$10.709 trillion
92.9
115.9
$3.076 billion

Time Period

February-April

186.3

(1.4)%
(2.2)%
(4.9)%
173 inmates

2.0%
9.4%
(1.1)%
1,275 inmates

1.0%
5.0%
0.1%
4.9%

4.9%
14.7%
4.9%
25.1%

0.5%

1.9%

Page 2

State of Arizona
General Fund Revenue: Change from Previous Year and Revised Forecast
April, 2004
Current Month

FY 2004 YTD (Ten Months)

Change From
Actual

April 2003

April 2004

Amount

Change from
Actual

Revised Forecast
Percent

Amount

Percent

April 2004

April 2003
Amount

Revised Forecast
Percent

Amount

Percent

Taxes
Sales and Use

$299,149,200

$35,386,764

$2,729,792,710

$213,095,287

Income - Individual

302,321,741

88,286,736

13.4 %
41.2

$21,805,353
58,668,450

24.1

7.9 %

1,931,414,261

161,875,379

8.5 %
9.1

$54,994,299

- Corporate

97,368,474

13,354,434

15.9

13,354,434

15.9

365,476,044

72,491,990

24.7

(754,477)

(0.2)

96,504,693

2.1 %
5.3

Property

1,923,720

(156,234)

(7.5)

293,795

18.0

23,881,058

3,405,543

16.6

(6,536,155)

(21.5)

Luxury

5,797,490

913,188

18.7

726,915

14.3

50,938,954

(3,195,047)

(5.9)

1,078,405

2.2

64,509,202

28,773,424

80.5

65,875

0.1

222,251,997

52,877,555

31.2

5,202,261

2.4

Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

2,813,280

(515,377)

(15.5)

(414,420)

(12.8)

32,172,933

(49,051,672)

(60.4)

(1,372,934)

(4.1)

89,941

(2,143,868)

(96.0)

(420,959)

(82.4)

2,687,133

(5,918,387)

(68.8)

(1,055,512)

(28.2)

$773,973,048

$163,899,067

26.9 %

$94,079,443

13.8 %

$5,358,615,090

$445,580,648

3,594,400

9.1 %

$148,060,580

2.8 %

Other Revenue
Lottery

1,558,200

(607,100)

(28.0)

0

0.0

31,000,000

License, Fees and Permits

3,672,585

426,219

13.1

832,866

29.3

21,288,428

Interest

1,471,087

767,268

109.0

533,414

56.9

22,054,668

9,302,009

72.9

Sales and Services

3,288,043

700,133

27.1

564,370

20.7

39,716,036

2,131,488

5.7

208,551

0.5

Other Miscellaneous

5,570,280

1,623,736

41.1

1,994,623

55.8

32,496,088

17,224,169

112.8

5,925,700

22.3

Disproportionate Share
Transfers and Reimbursements

0

TOTAL BASE REVENUE

0.0

(35,187,182)

(99.9)

0

(857,984)

(100.0)

15,601,581

(33,134,910)

BSF Transfer for Alt. Fuels
Sub-Total Other Revenue

0

41,386

$789,574,629

$130,764,157

0
(3,636,903)
0

(89,387)

13.1
(0.4)

0.0

5,625,187

5,625,187

0.0

(98.9)

13,274,820

(28,149,516)

(68.0)

171,080

(4,181,390)

(96.1)

0.0

0

0.0

936,444

4.6

(1,505,493)

0
(3,124,027)
171,080

(6.4)

0.0
(19.1)
0.0

(68.0) %

288,370

1.9 %

165,626,307

5,456,960

3.4 %

2,612,255

1.6 %

19.8 %

$94,367,813

13.6 %

$5,524,241,397

$451,037,608

8.9 %

$150,672,835

2.8 %

One-Time Revenue
Urban Revenue Sharing

(15.2)

0

0.0

(304,220,970)

54,578,240

(15.2)

0

0.0

Tax Amnesty

0

0

0.0

0

0.0

15,080,406

15,080,406

0.0

0

0.0

Federal Cash Assistance

0

0

0.0

0

0.0

87,234,214

87,234,214

0.0

0

0.0

Judicial Enhancement

0

0

0.0

0

0.0

5,393,000

5,393,000

0.0

0

0.0

(15.2)

0

0.0

(45.2)

0

0.0

Sub-Total Transfers In
TOTAL REVENUE

(30,422,097)

(30,422,097)
$759,152,532

5,457,824

5,457,824
$136,221,981

21.9 %

$94,367,813

14.2 %

(196,513,350)
$5,327,728,047

VP% = Percent change from comparable period in prior year
VF% = Variance from forecast
F% = Forecast percent change for the fiscal year.
R% = Average percent change from comparable period in prior year which must be attained over remaining months to realize the forecast for year.

162,285,860
$613,323,468

13.0 %

$150,672,835

2.9 %