ARIZONA MONTHLY FISCAL HIGHLIGHTS January 2004 January General Fund revenues were $612.5 million. Collections were $8.8 million above the original FY 2004 forecast for the month, bringing the total forecast variance after 7 months to $126.9 million. Year-to-date collections of $3.8 billion are a total of 11.3% above last year. As we have noted in previous months, adjusting for tax amnesty revenues, the one-time federal cash assistance grant, judicial enhancement collections and Urban Revenue Sharing funds provides a more accurate picture of economic growth. After making these adjustments, year-to-date collections are up 6.6% for the first 7 months of the fiscal year compared to last year. We will continue to measure revenue collections against the original budget forecast until the Legislature enacts a new budget. The JLBC FY 2005 Budget has already incorporated most of the year-to-date surplus through the first 6 months in the revised FY 2004 estimates. The new January collections are approximately $12.1 million above these revised estimates. The January collections were higher than expected in some of the revenue categories that had been revised downward in the new forecast. This month’s report also includes information on the state’s federal funds. Over the last year, funding for major federal assistance programs to the state has increased by 16.2% to a level of $5.9 billion. General Fund Revenues Compared to Original FY 2004 Forecast and FY 2003 Collections ($ in Millions) FY 2004 Difference Difference Collections From Forecast 1/ from FY 2003 2/ January $ 612.5 $ 8.8 $ 10.4 Year-to-Date $3,820.9 $126.9 3/ $241.5 1/ Original FY 2004 budget forecast. 2/ Excludes federal cash assistance grant, URS, judicial enhancement and amnesty deposit. 3/ By the end of the fiscal year, amnesty may generate an additional $22 million above forecast. Sales Tax revenue in December increased by 4.9% (based on preliminary numbers), lowering the year-to-date growth rate to 7.1%. Sales tax collections are now $79.7 million above the forecast for the year. January 2004 was the first month the Department of Revenue used its new computer system to process Transaction Privilege Tax collections. While the transition to the new system is complete, with more than 98% of the monies properly distributed, final reconciliation of the January receipts has not yet occurred. The figures shown are based on the best information available at print time. Individual Income Tax collections in January were virtually flat compared to last year, increasing by only 0.2%. Year-todate, net collections are up by 0.9%. January’s withholding tax collections were down by (2.0)% compared to last year, partially due to one less collection day this year, and the ongoing withholding rate issue. Estimated and final payments were 9.0% or $5.6 million above last year. Refunds were 6.1% or $1.0 million above last year. Net collections were $(4.5) million below the January forecast. The year-to-date forecast error through 7 months is $(21.5) million. Corporate Income Tax revenue continued to run well ahead of expectations. January collections netted $18.0 million, which was $6.2 million more than the forecast. The $243.3 million total for the year to date now stands 47.7% above the level from a year ago. Tax Amnesty – This report includes no new amnesty deposits to the General Fund. Additional deposits are expected in future months. Judicial Collection Plan – The enacted budget includes a plan that requires 75% of excess court collections over FY 2003 collections be deposited into the General Fund (up to a maximum of $45 million). Deposits through January total $4.6 million. These monies will be distributed to state agencies to defray the employer cost of state employee health insurance and retirement. Recent Economic Indicators: The economic data continued to show improving growth. The Conference Board’s U.S. Consumer Confidence Index jumped to 96.8 in January, its highest level since July 2002. The U.S. Index of Leading JLBC This report has been prepared for the Arizona Legislature by the Joint Legislative Budget Committee Staff on March 3, 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 – January 2004 Economic Indicators advanced again with a solid 0.5% increase in January. The improvement was broad-based, with consumer sentiment, stock prices, manufacturing hours worked, and vendor performance all making contributions. strength. The Arizona Business Conditions Index climbed more than two points to 68.2 in January (readings above 50 signal rising economic growth). The employment component made the strongest contribution. The high-technology sector stalled slightly in December. U.S. Semiconductor Billings (3-month moving average) dipped 0.7% to $3.032 billion. Even so, sales were 16.8% higher than the level from a year ago. Meanwhile, preliminary estimates reported Arizona Personal Income topped $150 billion (seasonally adjusted annual rate) in third quarter 2003. The 1.4% growth from the prior quarter ranked 12th among the fifty states. The U.S. Consumer Price Index rose 0.5% in January, with soaring fuel prices accounting for more than three-fourths of the increase. The “core” CPI, excluding food and fuel costs, increased just 0.2% last month. Among the results from state government programs, the number of TANF recipients declined again in December. However, average payments per client for the year-to-date were 5.1% above the forecast. There were no new statistics on Arizona’s job market last month. The Arizona Department of Economic Security, which is in the process of producing its annual revisions, will release January’s results on March 4th. Similarly, the Arizona Index of Leading Economic Indicators was not updated, since it uses key components from the monthly employment survey. From November through January, the Department of Corrections’ inmate population grew by an average of 56 inmates per month. This growth rate was below the budgeted rate of 118 net new inmates per month. Other data on Arizona’s economy reflected improving conditions. The Arizona Tourism Barometer rebounded to 94.6 in December. All the components showed positive readings, with hotel and motel retail sales showing the most The number of acute-care AHCCCS clients declined 1.0% during the last three months but remained 5.4% above last year’s level. Growth in the Proposition 204 caseload slowed somewhat, with a 0.9% increase reported during the latest three-month period. The caseload level remained 18.0% higher than a year ago. 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 -Leading Indicators Index -U.S. Semiconductor Billings (3 month moving average) -Consumer Price Index (3 month moving average) Change From Prior Period Change From Prior Year Time Period Current Value December December October-December October-December December November January 4.8% 2.346 million $47.2 million $122.8 million 94.6 122.6 68.2 0.0% 0.4% 0.3% (0.6)% 3.8% 0.2% 3.2% (1.1)% 2.0% 13.4% 7.2% 0.6% 4.2% 33.7% 3rd Quarter 2003 $150.5 billion 1.4% 5.1% November-January October-December November-January 571,275 173,434 126,231 31,260 4th Quarter 2003 January January October-December $10.597 trillion 96.8 115.0 $3.032 billion November-January 184.7 (1.0)% 0.9% (1.6)% 10 inmates 5.4% 18.0% 5.8% 1,635 inmates 1.0% 5.6% 0.5% (0.7)% 4.3% 22.8% 3.4% 16.8% 0.0% 1.9% Page 2 State of Arizona General Fund Revenue: Change from Previous Year and Budgeted Forecast January, 2004 Current Month FY 2004 YTD (Seven Months) Change From Actual January 2003 January 2004 Amount Change from Actual Budget Forecast Percent Amount Percent January 2003 January 2004 Amount $1,905,507,735 $126,973,015 1,474,079,338 13,701,805 Budget Forecast Percent Amount Percent Taxes Sales and Use $311,068,000 $14,530,307 Income - Individual 267,054,555 494,229 - Corporate 18,043,444 5,309,994 (6,052,725) (3,097,338) 47.6 Property Luxury Insurance Premium Estate Other Taxes Sub-Total Taxes 5,794,930 1,868,820 20,985,132 21,137,263 2,521,651 (28,184,402) 91,217 10,086 $619,506,204 $12,068,959 4.9 % $9,141,869 0.2 (4,533,679) (1.7) 41.7 6,164,848 51.9 104.8 (6,613,437) N/A (91.8) 12.4 2.0 % 3.0 % 7.1 % $79,747,572 0.9 (21,551,285) 4.4 % (1.4) 243,258,013 78,556,460 47.7 49,776,188 25.7 N/A 21,046,540 3,499,580 19.9 3,586,531 20.5 259,355 4.7 35,374,179 (5,602,912) (13.7) (3,374,846) (8.7) 5,182,180 32.8 91,632,147 30,444,844 49.8 16,600,002 22.1 (3,050,049) (54.7) 23,159,717 (42,481,896) (64.7) (15,842,183) (40.6) (305,683) (77.0) 1,787,263 (486,049) (21.4) (991,037) (35.7) $6,245,404 1.0 % $3,795,844,932 $204,604,847 3,772,000 5.7 % $107,950,942 2.9 % Other Revenue Lottery 6,383,700 (3,299,600) (34.1) 0 0.0 24,292,300 License, Fees and Permits 2,046,203 (31,773) (1.5) 146,644 7.7 14,013,289 (112,771) 18.4 (0.8) 0 0.0 1,314,453 10.4 70.6 Interest 1,483,087 (184,454) (11.1) (394,396) (21.0) 18,780,423 8,931,908 90.7 7,770,361 Sales and Services 6,328,100 (162,665) (2.5) (129,965) (2.0) 29,874,801 1,323,335 4.6 (1,179,238) (3.8) Other Miscellaneous 4,842,234 20,033,778 12,066,965 151.5 4,888,276 32.3 Disproportionate Share Transfers and Reimbursements 0 TOTAL BASE REVENUE 105.6 0 0.0 5,625,187 5,625,187 0.0 5,625,187 0.0 (50.2) 495,088 268.4 12,143,612 8,276,248 214.0 344,989 2.9 0 (108,200) (100.0) 0 0.0 167,053 (2,964,206) (94.7) 167,053 0.0 21,762,866 (1,707,532) $10,361,427 0.0 2,486,631 (686,064) $641,269,070 0 133.1 679,542 BSF Transfer for Alt. Fuels Sub-Total Other Revenue 2,765,224 (7.3) % 2,604,002 13.6 % 124,930,443 36,918,666 41.9 % 18,931,081 17.9 % 1.6 % $8,849,406 1.4 % $3,920,775,375 $241,523,513 6.6 % $126,882,023 3.3 % One-Time Revenue Urban Revenue Sharing (15.2) 0 0.0 (212,954,679) 38,204,768 (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 1,686,768 1,686,768 0.0 0 0.0 4,584,725 4,584,725 0.0 0 0.0 (28,735,329) 7,144,592 (19.9) 0 0.0 (57.8) 0 0.0 Judicial Enhancement Sub-Total Transfers In TOTAL REVENUE (30,422,097) $612,533,741 5,457,824 $17,506,019 2.9 % $8,849,406 1.5 % (106,055,334) $3,814,720,041 145,104,113 $386,627,626 11.3 % $126,882,023 3.4 % 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. Page 3 Joint Legislative Budget Committee Monthly Fiscal Highlights – January 2004 Trends in Spending for Major Federal Programs Congress approved a final Federal FY 2004 budget in January 2004. Total funding for major federal programs in Arizona increased from $5.0 billion to $5.9 billion (16.2%) from FY 2003 to FY 2004. (Please see attached table and program descriptions.) Over the two year period from FY 2002 to FY 2004, total funding in Arizona increased from $4.3 billion to $5.9 billion (35.5%). Arizona’s increase in federal funds over the past few years is due to the overall rising trend in total federal spending and because Arizona’s proportional share of the growing federal budget increased during this time period as well (from 1.6% in FY 2002 to 1.9% in FY 2004). Arizona has also received money through recently enacted federal programs such as the State Fiscal Relief Payments ($87 million in FY 2004), Homeland Security Formula Grants ($41 million in FY 2004), and Election Reform Grants ($26 million in FY 2004). The State Fiscal Relief Payments are not scheduled to continue past FY 2004. The attached table and program descriptions provide more detailed information. The information is compiled from Federal Funds Information for States (FFIS) data. FFIS is a joint effort of the National Governors Association and the National Conference of State Legislatures. They report on the largest federal grant programs, which reflect the overwhelming share of total federal assistance to state governments. The grants shown here represent formula grants to states including recent federal match rate adjustments. However, the amounts do not include discretionary grants, competitive grants or direct cash assistance to individuals (such as Medicare and Social Security). These grants reflect appropriations rather than actual expenditures. In some cases, state agency estimates for these grants may not match the amounts shown in the table. For another perspective on federal funds, the Governor's Office of Strategic Planning and Budget (OSPB) publishes an annual compilation of federal expenditures by state agency. The OSPB Report estimates Federal FY 2004 spending at a higher level due to the inclusion of discretionary grants and pass through funds. The OSPB report can be found at http://www.state.az.us/ospb/pdf/FedFunds.pdf. Arizona received increases in most federal grants from FY 2003 to FY 2004. Arizona’s social grant programs administered through the Departments of Education, and Health and Human Services generally received greater funding. Programs administered through the Departments of Labor and Transportation also generally increased from FY 2003 to FY 2004. As was the case last year, the largest single gain for Arizona came from federal Medicaid Vendor Payments. Arizona received $686 million (23%) more for Medicaid in FY 2004 than in FY 2003, representing 84% of the total Arizona increase for major federal programs over that time period. If Medicaid is excluded, funding for major federal programs in Arizona increased by 6.4% from FY 2003 to FY 2004. Without Medicaid dollars, Arizona’s share of major federal programs increased slightly during the period, representing 1.52% of the total US non-Medicaid budget in FY 2003 and 1.57% of the total US non-Medicaid budget in FY 2004. Other federal programs which have shown continued growth in Arizona include the Basic State Grant for Special Education which grew by $20 million (16% from FY 2003 to FY 2004). Page 4 Joint Legislative Budget Committee Monthly Fiscal Highlights – January 2004 Amount of Federal Grant-in-aid Money Distributed to Arizona for Major Programs ( Dollars in thousands) Federal Agency FY 2002 FY 2003 FY 2004 FY04 $ above FY03 FY04 % above FY03 Department of Agriculture Women, Infants & Children (WIC) Suppl. Feeding Program 75,397 81,671 82,247 576 0.7% Department of Education Title I – Grants to Local Education Agencies Vocational Rehabilitation – State Grants Special Education – Basic State Grant State Grants for Improving Teacher Quality Vocational Education – State Grants 173,247 44,081 111,046 45,061 21,690 187,236 45,401 132,063 45,698 23,368 194,767 48,460 152,491 45,853 23,515 7,531 3,059 20,428 155 147 4.0% 6.7% 15.5% 0.3% 0.6% 18,926 16,422 43,481 48,242 46,231 5,282 22,954 37,175 96,913 6,379 111,315 2,394,863 6,347 30,820 87,166 28,117 226,188 19,773 20,908 15,755 45,571 48,948 42,329 5,247 25,716 43,218 100,061 6,719 110,482 2,979,417 6,107 31,503 87,709 30,549 226,131 25,561 23,092 15,926 47,827 50,364 45,405 5,217 27,643 44,275 101,978 6,720 111,393 3,665,185 6,107 31,987 87,024 30,988 226,131 26,551 2,184 171 2,256 1,416 3,076 (30) 1,927 1,057 1,917 1 911 685,768 0 484 (685) 439 0 990 10.4% 1.1% 5.0% 2.9% 7.3% (0.6%) 7.5% 2.4% 1.9% 0.0% 0.8% 23.0% 0.0% 1.5% (0.8%) 1.4% 0.0% 3.9% 5,770 38,617 40,873 2,256 5.8% Department of Health and Human Services Adoption Assistance CDC: State and Local Capacity Child Care and Development Block Grant Child Care Entitlement – Mandatory and Matching Child Support Enforcement Administration Community Services Block Grant Consolidated Health Centers Foster Care Head Start Low-Income Home Energy Assistance Program (LIHEAP) Medicaid – Administration Medicaid – Vendor Payments Promoting Safe and Stable Families Social Services Block Grant (SSBG) State Children’s Health Insurance Program (SCHIP) Substance Abuse and Prevention Block Grant Temporary Assistance for Needy Families (TANF) Vaccines for Children Department of Homeland Security Homeland Security Formula Grants Page 5 Joint Legislative Budget Committee Monthly Fiscal Highlights – January 2004 Amount of Federal Grant-in-aid Money Distributed to Arizona for Major Programs ( Dollars in thousands) Federal Agency HUD and Independent Agencies Community Development Block Grant (CDBG) – Entitlement CDBG – Non-entitlement FY 2002 FY 2003 FY 2004 FY04 $ above FY03 FY04 % above FY03 42,904 50,395 49,134 (1,261) (2.5%) 11,042 13,637 14,405 768 5.6% 9,095 9,036 9,042 6 0.1% - 14,500 26,050 11,550 79.7% 8,766 24,184 8,849 10,631 8,813 12,706 (36) 2,075 (0.4%) 19.5% 16,168 16,031 16,109 78 0.5% 12,550 11,626 27,485 18,724 19,177 12,708 25,606 17,619 19,644 12,629 26,733 17,629 467 (79) 1,127 10 2.4% (0.6%) 4.4% 0.1% 13,299 101,649 67,794 108,300 121,606 9,858 79,935 67,353 86,527 98,064 12,009 96,937 76,070 105,014 118,720 2,151 17,002 8,717 18,487 20,656 21.8% 21.3% 12.9% 21.4% 21.1% - 87,234 87,234 0 0.0% 4,318,078 5,033,145 5,850,897 817,752 16.2% 266,702,876 292,017,189 307,316,374 15,299,185 5.2% Arizona % Share of US Total 1.62% 1.72% 1.90% Arizona % Share of US Total (without Medicaid) 1.55% 1.52% 1.57% EPA – Clean Water SRF Election Reform Grants Department of Justice Edward Byrne Memorial Grant Program State Criminal Alien Assistance Program Department of Labor Workforce Investment Act – Adult Employment and Training Activities Dislocated Workers Employment Service State Grants Unemployment – State Administration Workforce Investment Act – Youth Activities Department of Transportation Federal Aid Highways – Bridge R & R Federal Aid Highways – Interstate Maintenance Federal Aid Highways – Minimum Guarantee Federal Aid Highways – National Highway System Federal Aid Highways – Surface Transportation Program Department of Treasury State Fiscal Relief Payments Total Arizona Funding Total US Funding Page 6 Joint Legislative Budget Committee Monthly Fiscal Highlights – January 2004 Program Descriptions for Major Federal Grants Department of Agriculture Women, Infants & Children (WIC) Supplemental Feeding Program To provide, low-income pregnant, breastfeeding and postpartum women, infants, and children to age five determined to be at nutritional risk, at no cost, supplemental nutritious foods, nutrition education, and referrals to health care providers. Department of Education Title I – Grants to Local Education Agencies To help local education agencies (LEAs) and schools improve the teaching and learning of children failing, or most at-risk of failing, to meet challenging State academic standards. Vocational Rehabilitation – State Grants To assist States in operating programs of vocational rehabilitation; to provide vocational rehabilitation services for individuals with disabilities so they may prepare for and engage in competitive employment. Special Education – Basic State Grant To provide grants to States to assist them in providing a free appropriate public education to all children with disabilities. State Grants for Improving Teacher Quality To provide grants to State Education Agencies (SEAs) on a formula basis to increase student academic achievement through strategies such as improving teacher and principal quality and increasing the number of highly qualified teachers in the classroom and highly qualified principals and assistant principals in schools and hold local educational agencies and schools accountable for improvements in student academic achievement. Vocational Education – State Grants Basic grants assist States and outlying areas to expand and improve their programs of vocational education and provide equal access in vocational education to special needs populations. The populations assisted by Basic Grants range from secondary students in pre-vocational courses through adults who need retraining to adapt to changing technological and labor market conditions. Department of Health and Human Services Adoption Assistance To provide Federal Financial Participation to States in adoption subsidy costs for the adoption of children with special needs and who meet certain eligibility tests. Centers for Disease Control and Prevention: State and Local Capacity To ensure that state and local health departments, hospitals, and other health care entities are able to mount a collective response featuring seamless interaction of their event-specific capabilities in areas related to bioterrorism. Child Care and Development Block Grant (includes Entitlement – Mandatory and Matching program) To make grants to States and Tribes to assist low- income families with child care and to: (1) Allow each State maximum flexibility in developing child care programs and policies that best suit the needs of children and parents within State; (2) promote parental choice to empower working parents to make their own decisions on the child care that best suits their family's needs; (3) encourage States to provide consumer education information to help parents make informed choices about child care; (4) assist States to provide child care to parents trying to achieve independence from public assistance; and (5) assist States in implementing the health, safety, licensing, and registration standards established in State regulations. Child Support Enforcement Administration To enforce the support obligations owed by absent parents to their children, locate absent parents, establish paternity, and obtain child, spousal and medical support. Community Services Block Grant To provide assistance to States and local communities, working through a network of community action agencies and other neighborhood-based organizations, for the reduction of poverty, the revitalization of low-income communities, and the empowerment of low-income families and individuals in rural and urban areas to become fully self-sufficient. Consolidated Health Centers To support the development and operation of health centers which provide preventive and primary health care services, supplemental health and support services and environmental health services to medically underserved areas/populations. Foster Care To help States provide safe, appropriate, 24-hour, substitute care for children who are under the jurisdiction of the administering State agency and need temporary placement and care outside their homes; and to provide Federal Financial Participation in costs related to the program. Page 7 Joint Legislative Budget Committee Monthly Fiscal Highlights – January 2004 Head Start To promote school readiness by enhancing the social and cognitive development of low-income children, including children on federally recognized reservations and children of migratory farm workers, through the provision of comprehensive health, educational, nutritional, social and other services; and to involve parents in their children's learning and to help parents make progress toward their educational, literacy and employment goals. Low-Income Home Energy Assistance Program (LIHEAP) To make Low Income Home Energy Assistance Program (LIHEAP) grants available to States and other jurisdictions to assist eligible households to meet the costs of home energy. Medicaid; Title XIX – Administration Medicaid; Title XIX – Vendor Payments To provide financial assistance to States for payments of medical assistance on behalf of cash assistance recipients, children, pregnant women, and the aged who meet income and resource requirements, and other categorically-eligible groups. Financial assistance is provided to States to pay for Medicare premiums, copayments and deductibles of qualified Medicare beneficiaries meeting certain income requirements. More limited financial assistance is available for certain Medicare beneficiaries with higher incomes. Promoting Safe and Stable Families To fund community-based family support services that promote the safety and well-being of children and families by enhancing family functioning and child development; to fund family preservation services that serve families at risk or in crisis, including the following services: reunification and adoption services, preplacement/preventive services, follow-up services after return of a child from foster care, respite care, services designed to improve parenting skills; and infant safe haven programs; to fund time-limited family reunification services to facilitate the reunification of the child safety and appropriately within a timely fashion; and to fund adoption promotion and support services designed to encourage more adoptions out of the foster care system, when adoptions promote the best interests of children. Social Services Block Grant (SSBG) To enable each State to furnish social services best suited to the needs of the individuals residing in the State. Federal block grant funds may be used to provide services directed toward one of the following five goals specified in the law: (1) To prevent, reduce, or eliminate dependency; (2) to achieve or maintain self-sufficiency; (3) to prevent neglect, abuse, or exploitation of children and adults; (4) to prevent or reduce inappropriate institutional care; and (5) to secure admission or referral for institutional care when other forms of care are not appropriate. State Children’s Health Insurance Program (SCHIP) To provide funds to States to enable them to initiate and expand child health assistance to uninsured, low-income children. Assistance should be provided primarily by two methods: (1) Obtain health insurance coverage that meets the requirements relating to the amount, duration, and scope of benefits; or (2) expand eligibility for children under the State's Medicaid program. Substance Abuse and Prevention Block Grant To provide financial assistance to States and Territories to support projects for the development and implementation of prevention, treatment and rehabilitation activities directed to the diseases of alcohol and drug abuse. Temporary Assistance for Needy Families (TANF) To provide grants to States, Territories, or Tribes to assist needy families with children so that children can be cared for in their own homes; to reduce dependency by promoting job preparation, work, and marriage; to reduce and prevent out-of-wedlock pregnancies; and to encourage the formation and maintenance of two-parent families. Vaccines for Children To assist States and communities in establishing and maintaining preventive health service programs to immunize individuals against vaccinepreventable diseases (including measles, rubella, poliomyelitis, diphtheria, pertussis, tetanus, hepatitis B, hepatitis A, varicella, mumps, haemophilus influenza type b, influenza, and pneumococcal pneumonia). Department of Homeland Security Homeland Security Formula Grants SHSP: The State Homeland Security Program (SHSP) enables states to prepare for and mitigate the effects of attacks from chemical, biological, radiological, nuclear and explosive terrorist attacks. The SHSP replaces the counterterrorism grants formerly awarded by the Justice Department’s Office for Domestic Preparedness (ODP). LETPP: The Law Enforcement Terrorism Prevention Program (LETPP) may be used for law enforcement planning, organizational activities and equipment to enable information sharing, reducing vulnerability of potential targets, threat recognition, intervention activities and interoperable communications. The LETPP is similar in structure to the prior Critical Infrastructure Grants. HUD and Independent Agencies Community Development Block Grant (CDBG) – Entitlement To develop viable urban communities, by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for persons of low and moderate income. Page 8 Joint Legislative Budget Committee Monthly Fiscal Highlights – January 2004 Community Development Block Grant (CDBG) – Non-entitlement This grant has the same basic objective as the previous CDBG. However grant recipients also must demonstrate that each activity funded meets one of the program's National Objectives by either: benefiting low and moderate income families; aiding in the prevention or elimination of slums or blight; or meeting other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community where other financial resources are not available. EPA – Clean Water SRF To create State Revolving Funds (SRFs) through a program of capitalization grants to States which will provide a long term source of State financing for construction of wastewater treatment facilities and implementation of other water quality management activities. Election Reform Grants To improve the administration of elections for Federal office and to replace punch card voting systems or lever voting systems. Department of Justice Edward Byrne Memorial Grant Program To provide leadership and direction in controlling the use and availability of illegal drugs, with emphasis on violent crime and serious offenders. State Criminal Alien Assistance Program The State Criminal Alien Assistance Program (SCAAP) provides Federal assistance to states and units of local government incurring costs of incarcerating illegal aliens convicted of one felony or two misdemeanor offenses and to expedite the transfer of custody for certain deportable aliens. Department of Labor Workforce Investment Act – Adult Employment and Training Activities To provide workforce investment activities that increase the employment, retention and earnings of participants, and increase occupational skill attainment by the participants. This program is designed to increase employment, as measured by entry into unsubsidized employment, retention in unsubsidized employment six months after entry into employment, and wage gain. Workforce Investment Act – Dislocated Workers This grant has the same basic objective as the prior program with an emphasis on employing dislocated workers. Employment Service State Grants To place persons in employment by providing a variety of placement-related services without charge to job seekers and to employers seeking qualified individuals to fill job openings. Unemployment – State Administration To administer this program of unemployment insurance for eligible workers through Federal and State cooperation; to administer payment of trade adjustment assistance; disaster unemployment assistance; unemployment compensation for Federal employees and ex-service members. Workforce Investment Act – Youth Activities To design, with States and local communities, a revitalized, workforce investment system that will help low income youth between the ages of 14 and 21 acquire the educational and occupational skills, training and support needed to achieve academic and employment success and successfully transition to careers. Department of Transportation Federal Aid Highways – Bridge R & R Federal Aid Highways – Interstate Maintenance Federal Aid Highways – Minimum Guarantee Federal Aid Highways – National Highway System Federal Aid Highways – Surface Transportation Program To assist State transportation agencies in the planning and development of an integrated, interconnected transportation system important to interstate commerce and travel by constructing and rehabilitating the National Highway System, including the Interstate System; and for transportation improvements to all public roads except those functionally classified as local; to provide aid for the repair of Federal-aid roads following disasters; to foster safe highway design; to replace or rehabilitate deficient or obsolete bridges; and to provide for other special purposes. The Federal Lands Highway Program provides assistance to the Federal Land Management Agencies for Federally-owned roads. Department of Treasury State Fiscal Relief Payments To provide fiscal relief to each state as part of the Jobs and Growth Tax Relief Reconciliation Act of 2003. Amount is based on relative state population. Permitted use of the funds include financing essential government services or covering the state cost of complying with an unfunded federal intergovernmental mandate (as defined in section 421(5) of the Congressional Budget Act of 1974). A state may use funds only for the types of expenditures permitted under the most recently approved budget for the state. Page 9