ARIZONA

MONTHLY FISCAL HIGHLIGHTS
December 2004
General Fund revenue collections were $746.8 million in December. This amount is $77.9 million over the forecast for the month
and 22.0% greater than December of last year.
Collections for the first 6 months of the fiscal year total $267.5 million over the budgeted forecast. The General Appropriation Act
included a provision that any revenue exceeding the budgeted forecast for the first six months of FY 2005 will be dedicated for
specific purposes. This “excess” FY 2005 revenue will be divided evenly between the General Fund and the Budget Stabilization
Fund (BSF). The actual transfer to the BSF will be jointly determined by the JLBC Staff and the Office of Strategic Planning and
Budgeting by February 10.
The existence of surplus FY 2005 revenues does not mean that there will be surplus monies in the next fiscal year. For example,
surplus FY 2005 revenues may be used in the FY 2006 budget to offset the loss of one-time FY 2005 financing.
December collections for the Big 3 revenue categories were a total of $114.5 million over the same month last year. Sales tax
collections once again were strong, with an increase of $25.9 million, or 9.9%. Individual income tax collections were $36.6
million, or 14.1% over last year. However the largest increase was in corporate income tax collections, which were $52.0 million,
or 61.1% over last December 2003.

General Fund Revenues
Compared to Adopted Forecast and FY 2004 Collections
($ in Millions)
FY 2005
Difference
Difference
Collections
From Forecast 1/
From FY 2004
December
$ 746.8
$ 77.9
$ 134.6
Year-to Date
$ 3,595.7
$ 267.5
$ 393.8 2/
____________
1/ Enacted FY 2005 budget (May)
2/ Including the receipt of $87.2 million federal cash assistance grant in October, 2003.

Sales Tax revenue increased by 9.9% on a year-over-year
basis in December and was $12.3 million above the forecast
for the month. Year-to-date, collections are 9.6% over the first
6 months of last fiscal year and $56.4 million over forecast for
the period. The following is based on collections through
December:
• Retail sales tax receipts have increased by 8.1%.
• Contracting continues to exhibit the large increases begun
last year, with a year-to-date increase of 17.9%.
• Restaurants and bars collections are up 8.4%.
• Use tax receipts (all of which is retained by the state) are up
12.0%.
Individual Income Tax collections for December were 14.1%
above last year. Withholding tax collections increased by
9.2% compared to last year. Estimated/final payments were up
almost 43% over last year, and refunds were up almost 70%.
Year-to-date total individual income tax collections are 13.1%

above last year, and $91.5 million above the forecast for
through December.
Corporate Income Tax revenue of $137.2 million was $52.0
million over December collections last year. This amount
represents the highest single net collection month since
September 2000. Year-to-date corporate collections are $105.5
million or 44.5% over forecast.
Recent Economic Indicators:
The U.S. Consumer
Confidence Index, which was declining since August,
rebounded sharply in December. Consumers’ assessment of
current conditions, the job market, and the near-term outlook
all showed improvement. The U.S. Index of Leading
Economic Indicators continued to advance in December
following an extended period of decline.
U.S. semiconductor billings (three-month moving average)
dipped a bit in November but remained well above the
previous year’s results.
The Semiconductor Industry

JLBC
This report has been prepared for the Arizona Legislature by the Joint Legislative Budget Committee Staff on January 26, 2005. 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 – December 2004

Association reported that the wireless handset market has been
stronger than recent forecasts had suggested.
Arizona’s job market closed the year on a strong note. The
unemployment rate dropped to 4.2% in December, well
below the 5.4% U.S. average. The manufacturing sector added
300 positions in December, while health care, financial
services and tourism-related businesses accounted for much of
the remaining job gains. Total non-farm employment
increased by 2.8% on a year-over-year basis for the month of
December.
The Arizona Business Conditions Index posted a solid 5.1%
increase in December, with production and employment
among the strongest influences. The Behavior Research
Center’s Arizona Consumer Confidence Index rose to 104.3
in January 2005, a 20-point improvement from two years ago.
The most recent survey reported that improved business
conditions and the employment outlook have bolstered
confidence in the last three months. Meanwhile, the University
of Arizona’s Business Leaders Confidence Index for 2005’s
first quarter slipped (4.9)% from the previous survey. The
outlook for sales, profits and hiring all declined from three
months ago.

Arizona personal income totaled $161.7 billion (annualized)
in 2004’s third quarter, according to preliminary estimates.
The state’s 1.1% increase from the prior quarter ranked 8th
among the states and pushed Arizona’s personal income
growth to 7.0% on a year-over-year-basis.
Among state programs, the AHCCCS caseload continued to
increase in December. Average enrollment for the most recent
three months was 6.2% higher than the previous three-month
period and 7.6% above the level from one year ago. The
number of TANF recipients (three-month average) declined
to 110,769 in November, a (3.7)% drop from the previous
three-month period.
The Department of Corrections' inmate population
increased by an average of 100 inmates per month from
October through December. Although the increase was less
than the budgeted rate of 115 net new inmates per month, the
average head count was 1,180 higher than the level from a year
ago.

RECENT ECONOMIC INDICATORS
Indicator
Arizona
- Unemployment Rate
- Jobs
- Contracting Tax Receipts (3-month average)
- Retail Sales Tax Receipts (3-month average)
- Residential Building Permits - (3-month moving average)
Single-unit
Multi-unit
- Arizona Tourism Barometer
- Phoenix Sky Harbor Air Passengers
- Arizona Average Natural Gas Price
($ per thousand cubic feet)
- Leading Indicators Index
- Business Conditions Index
(>50 signifies expansion)
- Consumer Confidence Index
- Business Leaders Confidence Index
- Arizona Personal Income
- Arizona Population
- AHCCCS Recipients (3-month average)
- TANF Recipients (3-month average)
- DOC Inmate Growth (3-month average)
United States
Gross Domestic Product
- (seasonally adjusted annual growth rate)
- Consumer Confidence Index
- 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
Sep-Nov
Sep-Nov

4.2%
2.41 million
$54.7 million
$131.6 million

(0.3)%
0.2%
5.3%
(1.4)%

(0.8)%
2.8%
16.2%
8.1%

November
November
October
December
October

5,997
614
96.7
3.24 million
$5.49

(8.3)%
(7.2)%
0.8%
(4.5)%
4.8%

17.0%
(41.6)%
5.7%
8.7%
15.8%

(0.7)%
5.1%

1.1%
(2.0)%

October
December

124.5
64.6

1st Quarter 2005
1st Quarter 2005
3rd Quarter 2004
July 1, 2004
Oct-Dec
Sep-Nov
Oct-Dec

104.3
65.5
$161.7 billion
5.74 million
806,347
110,769
32,470

3rd Quarter 2004

$10.9 trillion

4.0%

4.0%

December
December
Sep-Nov
Oct-Dec

102.3
115.4
$3.4 billion
190.7

10.5%
0.2%
(1.6)%
0.1%

11.6%
0.8%
13.1%
3.3%

3.2%
(4.9)%
1.1%
3.0%
6.2%
(3.7)%
100 inmates

13.1%
(10.9)%
7.0%
3.0%
7.6%
(13.5)%
1,220 inmates

Page 2

State of Arizona

General Fund Revenue: Change from Previous Year and Original Budget Forecast
December 2004

Current Month

FY 2005 YTD (Six Months)

Change From
Actual

December 2003

December 2004

Amount

Change from
Actual

Budgeted Forecast

Percent

Amount

Percent

December 2003

December 2004

Amount

Budgeted Forecast

Percent

Amount

Percent

Taxes
Sales and Use

$287,618,721

$25,884,152

$1,747,580,798

$153,141,063

Income - Individual

296,768,719

36,621,810

14.1

9.9 %

$12,326,187
24,616,029

4.5 %
9.0

1,365,507,669

158,482,886

13.1

9.6 %

$56,398,365
91,511,120

7.2

- Corporate

137,232,790

52,031,769

61.1

46,709,348

51.6

342,740,713

117,526,144

52.2

105,548,060

44.5

Property

2,404,322

(4,775,222)

(66.5)

(2,187,499)

(47.6)

14,035,084

(13,064,182)

(48.2)

Luxury

4,891,495

(283,033)

(5.5)

(523,505)

(9.7)

30,583,074

1,003,825

3.4

93,074

--

(871,865)

(3.7)

123,361,188

52,714,173

74.6

5,805,035

4.9

(52.1)

787,239

47.0

20,745,602

107,535

0.5

10,695,602

106.4

28.0

(813,879)

(93.5)

1,605,914

(90,132)

(5.3)

(3,614,086)

(69.2)

Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

22,430,177

22,393,579

2,462,239

(2,677,148)

56,121

12,283

$753,864,584

$129,208,190

20.7 %

$80,042,055

11.9 %

$3,646,160,042

$469,821,312

14.8 %

(1,034,768)

3.3 %

$265,402,402

(6.9)
0.3

7.9 %

Other Revenue
Lottery

2,791,000

714,600

34.4

(309,000)

(10.0)

15,332,200

(2,576,400)

(14.4)

License, Fees and Permits

2,133,498

(157,248)

(6.9)

254,025

13.5

13,053,212

1,086,126

9.1

812,100

(167,800)
1,527,147

(1.1)
13.2

Interest

2,127,506

61.7

844,596

65.8

9,133,699

(8,163,637)

(47.2)

3,224,939

54.6

Sales and Services

3,537,049

(6,570)

(0.2)

(757,097)

(17.6)

17,977,859

(5,568,841)

(23.7)

(3,476,329)

(16.2)

Other Miscellaneous

1,315,875

(3,172,209)

(70.7)

(1,659,389)

(55.8)

7,844,974

(7,092,714)

(47.5)

(3,171,275)

(28.8)

--

0

(5,625,187)

(100.0)

0

(85.1)

16,382,811

(82,482,526)

(83.4)

3,947,811

(16.2) %

79,724,755

(110,423,179)

(58.1) %

1,884,493

2.4 %

11.3 %

$3,725,884,797

$359,398,133

10.7 %

$267,286,895

7.7 %

Disproportionate Share
Transfers and Reimbursements
Sub-Total Other Revenue
TOTAL BASE REVENUE

0

0

--

122,116

(3,936,885)

(97.0)

12,027,044

(5,746,212)

(32.3) %

$765,891,628

$123,461,978

19.2 %

0
(697,664)
(2,324,529)
$77,717,526

-31.7

One-Time Revenue
Urban Revenue Sharing

(31,089,382)

135

(0.0)

0

0

--

0

--

11,973,044

11,973,044

--

173,044

Budget Balancing Transfers
VLT Transfer
Tax Amnesty
Judicial Enhancement
Sub-Total Transfers In
TOTAL REVENUE

0
50,000
(19,066,338)
$746,825,290

(667,285)

0
(203,857)

2.2

1.5

(186,536,289)

(4,003,707)

2.2

813

0

0

--

0

54,157,006

54,157,006

--

173,044

--

0

--

0

(15,080,406)

(100.0)

0

(80.3)

50,000

--

2,196,600

(701,357)

(24.2)

50,000

11,101,902

(36.8) %

223,179

(1.2) %

$134,563,880

22.0 %

$77,940,705

11.7 %

(130,182,683)
$3,595,702,114

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.

(0.0)
-0.3
-2.3

34,371,536

(20.9) %

223,857

(0.2) %

$393,769,669

12.3 %

$267,510,752

8.0 %