JLBC - Monthly Fiscal Highlights

1716 W. Adams
Phoenix, AZ 85007
Phone:
(602) 926-5491
Fax:
(602) 926-5416

What’s Inside
Preliminary June General Fund revenue
collections were $1.05 billion, or (5.0)% below
June 2006. This amount was $(86.6) million
below the monthly forecast based on the
recently enacted state budget. (See page 9.)
For all of FY 2007, preliminary General Fund
revenue collections totaled $9.63 billion, or 3.7%
above FY 2006. This amount is $(225.8) million
below the enacted forecast. Year-end book
closing is still occurring, and these preliminary
numbers are subject to change.

www.azleg.gov/jlbc.htm

“For all of FY
2007, preliminary
General Fund
revenue
collections
totaled $9.63
billion. This
amount is
$(225.8) million
below the
enacted
forecast.”

The June results were below forecast for all the
major categories:
• Individual income tax collections were (7.0)%
below June 2006 and $(47.3) million below
the recently enacted budget forecast.
• Sales tax revenue was (1.9)% below June
2006. Monthly collections fell short of the
forecast by $(13.6) million.
• Corporate income tax collections were
(11.1)% below last year, and $(22.3) million
below the forecast.
Employment figures for the month also showed
signs of weakness. June non-farm employment
grew 2.9% over last year. By way of comparison, the 10-year average is 3.3%. In addition,
construction employment declined (0.2)%, the
first year-over-year decline in almost 5 years.

a slower national economy.
While the state ended FY 2007 below the
forecast, the FY 2007 budget will remain
balanced. The enacted forecast includes a
projected FY 2007 year-end surplus of $529
million. Ending FY 2007 with a $(225.8) million
shortfall would reduce the carry forward into
FY 2008 to $303 million. This number will
subsequently be adjusted once final spending
numbers are tabulated.
It is too early to predict the impact in FY 2008 of
ending FY 2007 million below the forecast. In
FY 2008, the enacted budget includes a yearend balance of less than $1 million. A shortfall
of $(225.8) million in the FY 2007 carry forward
would therefore result in a cash shortfall at the
end of FY 2008 unless other budget outcomes
are better than expected.
A better projection of the FY 2008 shortfall will
not be available for at least several months.
During that time, a preliminary estimate of the
FY 2007 ending balance, including spending
figures, will be published. In addition, actual
FY 2008 revenue trends will start to take shape.
The Monthly Fiscal Highlights also include a
summary of the June JLBC meeting (page 5)
and a summary of recent statutory reports
submitted to JLBC (pages 5-8).

As mentioned in the June edition of the
Monthly Fiscal Highlights, the slower growth in
FY 2007 revenue collections was due to onetime FY 2006 gains that did not reoccur in
FY 2007, a decline in construction activity, and

Table of Contents
June Revenues.................................................................. 2
Recent Economic Indicators .......................................... 3

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on July 31,
2007.

July 2007

JLBC Meeting Summary
• DES – WIA Incentive Funding...................................... 5
• ADE – Structured Immersion for English Language
Learners ......................................................................... 5
• DPS – Microwave Communication System .............. 5

Summary of Recent Agency Reports
• AHCCCS – Rural Hospital Reimbursement ............... 5
• DES – Federal Work Participation Requirements ..... 5
• DES – Arizona Training Program at Coolidge ........... 5
• ADE – JTED Course Approvals .................................... 6
• DHS – Arizona State Hospital Privatization Report ... 6
• DHS – Health Crisis Fund Expenditures....................... 6
• Racing – Boxing Events and Revenue ...................... 6
• ADOT – STAN Account................................................. 7
• Public Programs Eligibility Report ............................... 7

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

June Revenues

During the

Preliminary Sales Tax collections were $376.0
million in June, or (1.9)% below last year. This
amount, however, does not include a
projected reduction of $(55.2) million for June
estimated payments. Previously, businesses
with an annual sales tax liability of $100,000
were required to make a single estimated
advance payment in June. Beginning with the
current year, the liability threshold has been
increased to $1 million. The estimated impact is
a one-time reduction of $(55.2) million to
collections. Rather than show it as an ongoing
decline in sales taxes, it is reflected as a onetime reduction under FY 2007 tax law changes.

second half of

Table 1 displays the June and year-to-date
growth rates for the major categories.

“For the first 6

months of the
year, sales tax
collections
increased 8.9%.

FY 2007, the
growth rate
slowed to 2.6%.”

Table 1

Sales Tax Growth Rates
June
Retail
(0.7)%
Contracting
(3.0)%
Utilities
5.9%
Use
58.1%
Restaurant & Bar
3.1%

YTD
3.7%
9.9%
12.2%
(1.0)%
7.8%

June sales collections declined from the prior
year, their first reduction in 4 years. Retail
collections were down (0.7)%, while contracting
decreased (3.0)%. Overall, collections for the
month were $(13.6) million below the forecast,
which resulted in a year end total that was
$(106.7) million less than projected.

“For all of FY

2007, individual
collections
increased only
1.6% over FY
2006.”

For the year, collections increased at a rate of
5.6%. As the year progressed, however,
revenues grew at an increasingly slower pace.
For the first 6 months of the year, sales tax
collections increased 8.9%. During the second
half of FY 2007, the growth rate slowed to 2.6%.
Individual Income Tax collections were $311.1
million in June, or (7.0)% below last year. June
collections were $(47.3) million less than
expected.
Table 2 displays the June and year-to-date
growth rates for individual categories.

Table 2

Individual Income Tax Growth Rates
June
YTD
Withholding
(2.9)%
7.8%
Estimated +
(5.0)%
3.9%
Final Payments
Refunds
12.8%
26.0%

The decline in June withholding and payments
resulted in collections being below forecast.
For all of FY 2007, individual collections
increased only 1.6% over FY 2006. Withholding
grew at a healthy rate of 7.8%, while payments
also increased above FY 2006. This positive
growth, however, was offset by a substantial
increase in refunds. The growth in refunds was
at least partially due to the previously enacted
5% tax cut. For the year, individual collections
were $(108.9) million below forecast.
Corporate Income Tax collections were $132.8
million in June, or (11.1)% below last year.
Following several months of positive growth,
collections declined in both May and June. For
the month, collections were $(22.3) million
below the forecast. For the year, corporate
collections increased 12.8%; however, this was
$(14.8) million below the forecast.
Insurance Premium Tax collections were $399.8
million in FY 2007, or 7.0% above last year.
Luxury Tax collections were $65.8 million, or
(1.4)% below last year. The decline in existing
collections was largely due to a reduction in
tobacco consumption, the result of newly
enacted tobacco tax rate increases.
Lottery collections were $52.9 million in FY 2007.
This was 15.2% more than FY 2006, the result of a
large increase in instant ticket games.
Interest was $104.5 million in FY 2007, which was
$30.2 million greater than FY 2006. The higher
level of revenue is due to a significant increase
in the operating fund balance during the
middle months of the fiscal year, plus a gradual
increase in the rate of return on investments.

Table 3

General Fund Revenues
Compared to Enacted Forecast and FY 2006 Collections
($ in Millions)
FY 2007
Difference From
Difference
Collections June 2007 Forecast 1/ From FY 2006
June
$ 1,045.4
$ (86.6)
$ (55.2)
Year-to Date
$ 9,625.1
$ (225.8)
$ 340.4
____________
1/ Enacted FY 2008 budget (June 2007).

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

3

Recent Economic Indicators
The first estimate of U.S. Gross Domestic Product
(GDP) for 2007’s 2nd quarter showed that the
economy’s annualized growth rate jumped to
3.4% from just 0.6% in the 1st quarter. The
economy’s improvement reflected faster
growth in net exports, defense spending, and
nonresidential fixed investment (primarily
buildings). Consumer spending, which led
economic growth in recent years, slowed to a
1.3% annual growth pace in the 2nd quarter.
The Bureau of Economic Analysis (BEA) also
released revised GDP estimates for the previous
3 years. BEA now estimates that GDP
advanced by 3.6% in 2004, 3.1% in 2005, and
2.9% in 2006.
Although U.S. semiconductor billings climbed
by 2.2% in May (the 3-month moving average)
from the prior period, they remained (5.6)%
below last year’s results. While unit sales of the
DRAM (dynamic rapid access memory) devices
used to power PCs increased by 7% from the
prior period, their average selling prices
declined by nearly 14%. In a separate report,
the Semiconductor Industry Association (SIA)
lowered its 2007 forecast for worldwide
semiconductor sales growth from 10.0% to 1.8%.
The U.S. Index of Leading Economic Indicators
dropped (0.3)% in June, reversing the revised
0.2% gain reported the previous month. The
decline was driven by weakness in building
permits, consumer sentiment, vendor
performance, and unemployment insurance
claims. Stock prices and new orders for capital
goods made positive contributions. The index
has fluctuated in a narrow range for more than
a year without signaling a significant trend for
the economy’s growth path.
However, the most recent report on consumer
sentiment was much more robust. The
Conference Board’s U.S. Consumer Confidence
Index rebounded sharply in July to 112.6, which
was up by 6.9% from June and was the highest
level recorded since August 2001’s reading of
114.0. Consumers’ assessment of current
conditions, their expectations for the next 6
months, and their view of the labor market all
showed marked improvement from the prior
month.
The U.S. Consumer Price Index (CPI) (3-month
moving average) rose 0.5% in June and
benefited from some relief in energy prices.
The CPI’s energy component, which increased
sharply during the previous 3 months, dropped

(0.5)% in June. Food prices climbed 0.5% from
the prior month while housing costs increased
0.3%. Excluding the effects of food and energy
prices, the core CPI increased 0.2% in June and
was 2.2% higher than a year ago.
Arizona’s job market displayed growing
weakness in June. Total non-farm employment
fell by (40,000), or (1.5)%, from the previous
month. While seasonal job losses are expected
in June due to the end of the school year, the
average June job loss during the last 10 years
was just (24,500). The state’s job count now
stands 2.9% higher than its level from a year
ago.
The building industry continued to lose ground.
Construction employment, which increased by
an average of 3,100 jobs in June during the
previous 10 years, fell by (600) from the prior
month. The (0.2)% decline from June 2006 was
the first negative year-over-year change in
construction employment reported since
October 2002. While the heavy constructioncivil engineering component was growing, the
remaining segments continued to shrink in
response to the housing slump.

“The (0.2)%
decline from

Meanwhile, the metal ore mining sector added
400 jobs in June and was up 5.0% from a year
ago, with more growth expected in the months
ahead. Manufacturing employment was flat in
June and was (0.9)% below the level posted in
June 2006.

June 2006 was

The Realty Studies group at Arizona State
University reported that that the Greater
Phoenix single-family median sales price
improved slightly from $262,000 to $263,145 in
June but remained (1.4)% below its level from a
year ago. The number of existing single-family
homes sold decreased (5.9)% in June from May
and was (10.1)% below the number sold in June
2006.

change in

The townhouse-condominium median sales
price decreased (2.0)% in June to $181,250,
which was 3.7% above the June 2006 median
sales price. The number of units sold declined
(9.6)% from the prior month but was 8.7% more
than the number sold a year ago.
The Arizona Business Conditions Index (BCI)
dropped (2.3)% in June to 57.9 but was still
above the mark of 50 associated with a
growing economy. The new orders component
made the strongest showing and reached its

the first negative
year-over-year

construction
employment
reported since
October 2002.”

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

Recent Economic Indicators (Continued)
highest level since September 2005, while the
current production component declined.
Looking ahead, the University of Arizona’s
Business Leaders Confidence Index (BLCI)
dipped to 50.5 in 2007’s 3rd quarter survey and
barely exceeded the mark of 50 associated
with a neutral outlook for the economy’s
growth prospects. With a reading of 45.6, the
national economic outlook component moved
firmly into the negative range. The indices for
the Arizona economy, profits, and hiring all
hovered around the 50 level, while the outlook
for sales, with a reading of 55.6, was the most
promising.

or a net increase of 160 inmates per month.
The number of TANF recipients decreased
(0.2)% to 78,549 in May and was (9.9)% below
the level reported in May 2006. The FY 2008
budget projects the TANF caseload will grow by
2.5%. The AHCCCS caseload climbed 0.4% in
July and now stands 1.8% higher than the total
from a year ago. The FY 2008 budget projects
growth of 1.9% from June 2007 to June 2008.

The Department of Corrections’ inmate
population increased by an average of 249
inmates per month from April through June.
The total population grew by 2,228 inmates
from a year ago. The budget for FY 2008
anticipates inmate population growth of 1,920,

Table 4

RECENT ECONOMIC INDICATORS
Indicator
Arizona
- Unemployment Rate
- Non-Farm Employment – Total
Manufacturing
Construction
- Contracting Tax Receipts (3-month average)
- Retail Sales Tax Receipts (3-month average)
- Residential Building Permits (3-month moving average)
Single-unit
Multi-unit
- Greater Phoenix Existing Home Sales
Single-Family
Townhouse/Condominium
- Greater Phoenix Median Home Sales Price
Single-Family
Townhouse/Condominium
- 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
- TANF Recipients
- 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

June
June
June
June
Apr-Jun
Apr-Jun

3.4%
2.69 million
186,800
245,500
$79.5 million
$175.4 million

(0.2)%
(1.5)%
0.0%
(0.2)%
(0.3)%
(1.0)%

(0.8)%
2.9%
(0.9)%
(0.2)%
(1.4)%
2.6%

Mar-May
Mar-May

4,150
819

2.0%
(43.6)%

(31.2)%
(30.1)%

June
June

4,910
1,125

(5.9)%
(9.6)%

(10.1)%
8.7%

June
June
May
April

$263,145
$181,250
3.65 million
$7.76

0.4%
(2.0)%
1.2%
(18.6)%

(1.4)%
3.7%
2.1%
12.5%

April
June

121.3
57.9

0.2%
(2.3)%

1.2%
5.9%

1st Quarter 2007
3rd Quarter 2007
1st Quarter 2007
July 1, 2006
July
May
Apr-Jun

106.3
50.5
$202.3 billion
6.17 million
1,053,971
78,549
36,802

2nd Quarter 2007

$11.5 trillion

3.4%

1.8%

July
June
Mar-May
Apr-Jun

112.6
138.0
$3.33 billion
207.7

6.9%
0.3%
2.2%
0.5%

5.2%
0.3%
(5.6)%
2.7%

0.9%
(1.7)%
2.1%
3.6%
0.4%
(0.2)%
249 inmates

(3.7)%
1.8%
6.2%
3.6%
1.8%
(9.9)%
2,228 inmates

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

JLBC Meeting
Department of Economic Security – Review of
Expenditures of Federal Workforce Investment
Act Monies – The Committee gave a favorable
review to the FY 2008 expenditure plan of $1.5
million for Workforce Investment Act monies.
Department of Public Safety – Review of the
Expenditures and Progress of the Microwave
Communications System – The Committee
gave a favorable review of the expenditures
and progress made to upgrade the microwave
communication system. Laws 2006, Chapter
345 appropriates $2.5 million in state funds from
FY2007 through FY2009. In addition, Chapter
345 included an intent statement that the
project annually receive $1.6 million in federal
Homeland Security funds from FY 2007 through
FY 2009. Federal monies were not received by
DPS in FY 2007.
At the meeting, the Arizona Department of
Homeland Security indicated that they would
fully fund the $1.6 million per fiscal year,
beginning in FY 2008, and for the full amount of
$4.8 million, as intended by the Legislature. The
committee requested that DPS report back by
October 31, 2008 on the status of the

microwave communications project and
federal Homeland Security grant funding.
The Arizona Department of Homeland Security
was recently notified of its federal homeland
security grant funding for federal FY 2007.
Federal funding increased from $20.2 million in
federal FY 2006 to $51.5 million in federal FY
2007, including $17.7 million that has been
earmarked for the Public Safety Interoperable
Communication Grant Program (PSIC).
Department of Education – Review of Structured
English Immersion Model for English Language
Learners - The Committee deferred action
regarding the review of the draft models of
Structured English Immersion in order to allow
time for greater review of the materials and
information presented. Laws 2006, Chapter 4
established the Arizona English Language
Learners Task Force and required it to develop
and adopt research based models of
“Structured English Immersion” (SEI) for use by
school districts and charter schools. The Task
Force is required to submit the models to the
Committee at least 30 days before adopting
them.

Summary of Recent Agency Reports
AHCCCS – Rural Hospital Reimbursement –
Pursuant to a footnote in the General
Appropriation Act, AHCCCS is required to notify
the Committee of any capitation rate adjustments to the AHCCCS acute care rates. A
one-time, one-month rate adjustment was
made to implement increased inpatient
reimbursement for small rural hospitals. After
the month of June, the standard capitation
rates will be used for the remainder of the
contract year.
Department of Economic Security – Quarterly
Report on Progress in Meeting Federal Work
Participation Requirements – A footnote in the
FY 2007 General Appropriation Act requires the
Department of Economic Security (DES) to
report quarterly on progress made in meeting
federal Temporary Assistance for Needy
Families (TANF) work participation requirements.
The federal Deficit Reduction Act (DRA) of 2005
changed the calculation that determines a
state’s required work participation rate for
clients receiving cash assistance under TANF.

Prior to Federal Fiscal Year (FFY) 2007, the
required work rate was reduced based on
caseload decline since 1995. With the implementation of the DRA, the reduction is based
on caseload decline since 2005. For FFY 2006,
DES had a work participation rate of 29.1%
and a minimum required rate of 20%. For FFY
2007, it is anticipated that the minimum
required rate will be 41%. As of March 2007,
the work participation rate in FFY 2007 was
22.6%. Failure to meet the required rate will
result in a federal corrective action plan, and
eventually in fines up to 5% of the Federal
TANF Block Grant, about $10 million.
Department of Economic Security – Report on
Arizona Training Program at Coolidge (ATP-C)
Campus and Other Placements – A footnote
in the FY 2007 General Appropriation Act
requires the Department of Economic Security
(DES) to report on placements of
developmentally-disabled (DD) clients into
state-owned Intermediate Care Facilities for
the Mentally Retarded (ICF-MR) or at the ATPC campus in FY 2007. DES has 45 total beds in

5

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

Summary of Recent Agency Reports
its Phoenix facilities, 39 of which are
occupied. DES reports that there
were no new permanent
placements at the ATP-C campus
but that there were two new
placements into state-operated
ICF-MRs in Phoenix in FY 2007. One
client was admitted into a stateoperated facility because of
behavioral needs that could not be
met in a community residential
setting. The other client was
admitted because of medical
needs that could not be met in a
community residential setting. The
placements were deemed to be
most appropriate because privaterun facilities denied admission to
both of the clients.
Department of Education – JTED
Course Approvals – Pursuant to
Laws 2006, Chapter 341, the Arizona
Department of Education (ADE)
recently submitted a report that lists
all courses offered by joint
technology education districts
(JTEDs) in FY 2006 and all courses
offered by JTEDs and approved by
ADE in FY 2007. Only courses
approved by ADE in FY 2007 as
meeting the new requirements will
be eligible for Basic State Aid
funding in FY 2008.
The ADE report indicates that JTEDs
collectively offered about 5,400
individual courses in FY 2006 and
submitted about 6,000 courses for
approval in FY 2007. (Not all courses
submitted for approval in FY 2007
actually enrolled students.) Of the
approximately 6,000 courses
submitted for approval, 1,479 (24%)
were “approved” by ADE, 3,417
(57%) were “conditionally
approved” and 1,135 (19%) were
“not approved.” ADE indicates that
it gave “conditional approval” to a
large number of courses for this
review under advice from counsel
because of the volume of courses
involved, the relatively short
timeframe available for review,
staffing limitations, and the need for
additional information about most
courses.

It is not known whether the “not
approved” courses will result in a
Basic State Aid savings for FY 2008 for
at least 2 reasons: 1) “not approved”
courses could be discontinued in FY
2008, resulting in JTED enrollment shifts
to “approved” courses; and 2) data
on the number of Average Daily
Membership (ADM) pupils generated
by those courses are not available
(JTEDs do not report ADM data by
course).
Department of Health Services –
Arizona State Hospital Privatization
Report – Laws 2006, Chapter 331
permitted the Department of Health
Services (DHS) to privatize the Arizona
State Hospital (ASH) and required the
agency to report to the Joint
Legislative Budget Committee if DHS
chose to move forward with
privatization efforts.
DHS reports that they will not privatize
ASH at this time and cites several
reasons for this decision. First, DHS
states that ASH already provides cost
effective care in an efficient manner,
noting that ASH recently received a
favorable review and high marks for
improvement and innovation from
the Joint Commission on Accreditation of Healthcare Organizations.
DHS also notes that ASH already
contracts with private companies for
several services including pharmacy,
maintenance, dietary, housekeeping,
grounds keeping, medical, podiatry,
speech therapy, and physical and
occupational therapy. DHS believes
that full privatization may not result in
substantial cost savings due to these
existing contractual relationships. The
department also expresses concern
about the amount of resources that
must be dedicated to contract
monitoring in order to ensure
accountability under privatized
operations.
Department of Health Services –
Report on Expenditures from the
Health Crisis Fund – Pursuant to A.R.S.
§ 36-797, the Department of Health
Services (DHS) is required to report

(Continued)

expenditures from the Health Crisis
Fund. The Health Crisis Fund
receives up to $1,000,000 annually
from the Medically Needy Account
of the Tobacco Tax and Health
Care Fund. The Governor may
declare a health crisis or a
significant potential for a health
crisis and authorize monies from the
Health Crisis Fund for the
emergency.
The Executive declared 2 health
crises on June 29, 2007:
• Executive Order 2007-13
authorized allocating $100,000 to
DHS to increase education and
the availability of syphilis testing
for pregnant women in Arizona.
According to the Executive
Order, during the last 4 years,
Arizona has had one of the
highest rates of congenital syphilis
in the United States and
untreated syphilis in pregnant
women can lead to stillbirth or
congenital abnormalities.
• Executive Order 2007-14
authorized allocating $295,000 to
DHS for tuberculosis prevention
and control, including purchasing
a portable, digital X-ray machine
for diagnosing tuberculosis in
homeless shelters and among
other vulnerable populations
throughout Arizona. According to
Executive Order, the state
experienced a 12% increase in
tuberculosis cases over the past
year and approximately 10% of
tuberculosis patients are
homeless.
In total, DHS is expected to expend
approximately $595,000 from the
Health Crisis Fund in FY 2007. In
addition to the expenditures referenced above, the Executive
previously authorized $200,000 to
mitigate the effects of out-of-hospital
cardiac arrests.
Department of Racing –Annual
Report on Boxing Events and
Revenue – Pursuant to a General
Appropriation Act footnote, the

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

Summary of Recent Agency Reports
Department of Racing is required to
report annually on the number of
boxing events, gross receipts, state
revenues, and license fee collections.
The department submitted its FY 2007
annual report on July 10, 2007.
During FY 2007, a total of 30 boxing
events were held in Arizona. During
that period the total gross tax
receipts, fines, and license fee
collections were $34,526; the state
received $33,000 of additional
revenue by way of Intergovernmental
Agreements with Indian tribes.
Department of Transportation – Report
on Statewide Transportation
Acceleration Needs Account of the
State Highway Fund – In response to a
provision in the Capital Outlay Bill for
FY 2007, Laws 2006, Chapter 345, the
State Transportation Board has
submitted the first annual report on
their Statewide Transportation
Acceleration Needs (STAN) Account
activities. The STAN Account was
established as a separate account in
the State Highway Fund with a
deposit of $307,000,000 in FY 2007 to
accelerate highway projects. STAN
monies are divided 60% for Maricopa
County, 16% for Pima County and
24% for all other counties.
The State Transportation Board has
approved spending a total of
$319,500,000 of STAN monies,
including the FY 2007 appropriation of
$307,000,000 and $12,500,000 in
interest, to accelerate a total of 11
projects. The STAN Account had a
balance of $315,963,200 as of June
30, 2007, including the $307,000,000
appropriation and $8,963,200 of
interest.
The 11 projects would accelerate the
construction of 85.4 freeway travellane miles and an interchange, 4
intersection improvements, widening
of 3 state route centerline miles, and
the advance purchase of right-ofway for future freeway construction.
The 11 projects include 7 projects in
Maricopa County, 3 in Pima County,
and 1 in Pinal County. The 7

Maricopa County projects include 6
construction projects and 1 right-ofway acquisition project, as follows:
• Add a third lane in each direction
to I-10 from Verrado Way to Sarival
Road in the West Valley.
• Add a third lane in each direction
to I-17 from Carefree Highway to
Anthem Way in the North Valley.
• Add high occupancy vehicle
(HOV) lanes in each direction to
Loop 101 from Tatum Boulevard to
Princess Drive in Scottsdale.
• Add HOV lanes in each direction to
Loop 101 from Baseline Road to
Loop 202 in Mesa.
• Build a partial interchange for the
future Loop 303 at Bell Road in the
Northwest Valley.
• Make road improvements on
Cactus and Waddell Roads for
future Loop 303 crossings in the
West Valley.
• Purchase rights-of-way for
construction of a Williams Gateway
Freeway from Loop 202 to Ellsworth
Road in Mesa.
The 3 Pima County construction
projects include:
• Add a general purpose lane in
each direction to I-10 from Pinal Air
Park Road to Tangerine Road.
• Add a left turn lane and widen SR
86 at the town of Sells.
• Make intersection improvements at
SR 86 and Kinney Road.
The Pinal County construction project
is to add a general purpose lane in
each direction to I-10 from Pinal Air
Park Road to Picacho Peak Road.
Public Programs Eligibility Report – As
enacted by voters at the November
2006 election, Proposition 300 limits
participation in the Adult Education
and Child Care programs to citizens,
legal residents, or other persons
lawfully present in the United States.
Proposition 300 also prohibits persons
who are not citizens, legal residents,
or otherwise lawfully present from
being entitled to classification as an
in-state or in-county resident for

7

(Continued)

university or community college
tuition purposes, or from receiving
state funded financial assistance.
The proposition requires the state
agencies administering the programs
described above (and the Family
Literacy Program) to report twice
annually to the Joint Legislative
Budget Committee the total number
of persons qualifying for these
programs, as well as the number of
persons deemed ineligible due to
their citizenship, residency, or
immigration status.
All required agencies submitted
reports. Additionally, there is some
degree of variability in the timeframe
and classification of the reporting
requirements. Below is a summary of
the reports:
Community Colleges
District-wide, the community colleges
reported a total of 124,000 students
classified as in-state. They reported
1,470 students who were not entitled
to be classified as in-state because of
a lack of lawful immigration status.
Additionally, 40,900 students applied
for financial aid. Of those who
applied, the community colleges
reported that 320 were not entitled to
any aid because they were not a
citizen or legal resident, or were not
lawfully present in the United States.
Universities
Both Arizona State University (ASU)
and University of Arizona (UA)
submitted their information in similar
formats. At these 2 universities, 77,300
students registered for fall 2007
semester. Of the total students
registered, the university was able to
verify the legal immigration status of
59,300. Additionally, the universities
reported that 16,500 of these students
did not require verification because
they have either not requested, or
received in-state tuition or state
supported financial aid. The
universities reported that a total of
1,500 students were unverifiable due
to their inability to provide the
requisite documentation.

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

Summary of Recent Agency Reports
NAU reported in a different manner.
For new students enrolling for the first
time in spring 2007, NAU reported a
total of 1,900 new students, which
were verified for legal immigration
status. NAU reported a total of 24
new students were not verifiable.
Department of Economic Security
The department reported that 13,700
applications were received for child
care assistance. Of this number, 86
were denied because criteria for
citizenship or legal residency were not
met.
Arizona Department of Education
The department reported that 11,931
people applied for instruction in
Arizona Adult Education during the
reporting period. Of this amount
1,403 were denied instruction
because they failed to provide
acceptable evidence of citizenship
or legal residence in the U.S.
Additionally, the Family Literacy
Program reported a total of 220
participants for services. Of this
amount, 30 were not eligible for
enrollment.

(Continued)

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2007

9

State of Arizona
General Fund Revenue

Change from Previous Year and Enacted Forecast
June 2007
Current Month

FY 2007 YTD (Twelve Months)

Change From
Actual
June 2007

June 2006
Amount

Change from

Revised Forecast

Percent

Amount

Percent

Actual
June 2007

June 2006
Amount

Revised Forecast
Percent

Amount

Percent

Taxes
Sales and Use

375,980,323

($7,284,654)

(1.9) %

$4,512,830,842

$239,472,391

Income - Individual

311,088,914

(23,355,078)

(7.0)

(47,312,711)

(13.2)

3,746,740,031

57,366,658

1.6

(108,929,769)

(2.8)

132,824,544

(16,656,193)

(11.1)

(22,273,687)

(14.4)

986,169,564

111,950,091

12.8

(14,811,736)

(1.5)

1,146,617

20.8

- Corporate

($13,575,917)

(3.5) %

5.6 %

($106,669,758)

(2.3) %

Property

6,655,954

1,245,314

23.0

24,486,025

(512,735)

(2.1)

(3,513,975)

(12.5)

Luxury

5,505,251

(56,723)

(1.0)

551,154

11.1

65,808,827

(923,641)

(1.4)

(1,691,173)

(2.5)

72,075,585

(341,481)

(0.5)

7,540,254

11.7

399,817,044

7.0

5,460,844

1.4

Estate

20,694

(18,075)

(46.6)

(1,131,979)

(98.2)

Other Taxes

38,229

(23,159)

(37.7)

(43,376)

(53.2)

$904,189,494

($46,588,746)

Insurance Premium

Sub-Total Taxes

(4.9) %

($75,000,948)

(7.7) %

(550,764)

26,113,255
(12,234,366)

1,328,470

78,515

$9,736,630,039

$421,310,168

-6.3
4.5 %

(750,764)
546,970
($230,359,361)

-70.0
(2.3) %

Other Revenue
Lottery

8,654,700

112.4

52,922,300

7,232,000

15.8

5,963,200

12.7

3,275,341

(749,945)

(18.6)

189,446

6.1

40,235,828

6,288,408

18.5

376,827

0.9

Interest

16,938,595

(3,320,010)

(16.4)

(649,146)

(3.7)

104,473,000

30,157,764

40.6

8,473,000

Sales and Services

13,556,107

63,734,933

4,051,615

6.8

(40,067)

(0.1)

(9,295,424)

(17.3)

License, Fees and Permits

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

16,354,700

15,748,701

8,975,500

121.6

674,566

5.2

(2,069,478)

(13.2)

(213,735)

(1.3)

(13,407,861)

(46.0)

44,434,876

7,154,896

19.2

0.0

113,127,300

5,122,900

4.7

(39.3)

19,480,991

(6,196,875)

(24.1)

113,127,300

5,122,900

4.7

6,820,392

41,033

0.6

185,821,136
$1,090,010,630

10,530,309
($36,058,437)

0
(4,421,910)

6.0 %

(11,704,249)

(5.9) %

438,409,228

53,810,708

14.0 %

(3.2) %

($86,705,197)

(7.4) %

$10,175,039,267

$475,120,876

4.9 %

0
(994,208)
4,483,328
($225,876,033)

8.8

0.0
(4.9)
1.0 %
(2.2) %

One-Time Revenue
Urban Revenue Sharing
'06 Transfer
'07 Fee Changes
'07 Tax Law Changes
Sub-Total Transfers In
TOTAL REVENUE

(45,935,888)

(10,500,144)

29.6

85,144

(0.2)

(551,230,661)

(126,001,734)

29.6

85,139

60,080,500

50,080,500

500.8

0

0.0

60,080,500

50,080,500

500.8

0

450,000

450,000

--

0

0.0

450,000

450,000

0

0.0

(59,200,000)

(59,200,000)

--

(44,605,388)

(19,169,644)

75.4 %

($55,228,081)

(5.0) %

$1,045,405,242

85,144
($86,620,053)

(0.2) %
(7.7) %

0

0.0

0

0.0

(59,200,000)

--

(549,900,161)

(134,671,234)

32.4 %

$340,449,642

0.0

--

(59,200,000)

$9,625,139,106

(0.0)

3.7 %

85,139
($225,790,894)

(0.0) %
(2.3) %