JLBC - Monthly Fiscal Highlights

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

This Month
Total December General Fund revenue
collections were $871.5 million, or (4.3)% below
December of last year. This amount was
$(84.3) million below the forecast based on the
June enacted state budget.
For the first 6 months of FY 2008, General Fund
collections are down (1.1)% when compared
to last year, and are $(393.2) million less than
forecast. When factoring in Urban Revenue
Sharing, year-to-date collections are (2.6)%
below last year. (See page 8 for detail
information).

www.azleg.gov/jlbc.htm

“For the first
6 months of
FY 2008, General
Fund collections
are down (1.1)%
when compared
to last year, and
are $(393.2)
million less than

January 2008

Each of the three major revenue categories
was below the forecast in December:
• Sales tax collections were flat compared to
December 2006, and were $(32.4) million
short of the monthly forecast.
• Individual income tax collections were up
1.0%, which was $(25.5) million below
forecast.
• Corporate income tax collections were
(29.2)% below last year, and $(37.8) million
below the forecast.

higher net-to-state collections than first
reported.
In addition, a technical adjustment to
corporate income tax collections was made in
December. It had been anticipated that the
$(55.5) million impact of the corporate
consolidated credit would occur in the second
half of the year. However, a portion of that
amount has already been returned to
corporate taxpayers, which reduces the
forecast shortfall.
JLBC/JCCR Meetings – There were no JLBC or
JCCR meetings in January.
Recent Reports – The Highlights include a
summary of recent statutory reports submitted
to the JLBC (pages 5-8). Among the submitted
items:
•

•

We had previously reported that, based on
preliminary December numbers, collections for
the first 6 months of the fiscal year were $(440)
million below forecast. As noted above,
actual results are $(393) million below. The
variance is primarily due to two factors.
Collections in the use tax category of the sales
tax, which are all retained by the state, were
stronger than anticipated, and resulted in

•

The Universities, Community Colleges,
Department of Economic Security (DES),
and Department of Education (ADE)
submitted their semi-annual reports on the
legal status of program recipients.
The Arizona Department of Corrections
and the Arizona Department of
Administration (ADOA) jointly reported that
ADOA plans to award a contract for 2,000
private prison beds in the beginning of
February. ADOA also states that the initial
timeline for the lease purchase financing
of $200 million for 4,000 state prison beds
has been delayed from January to March.
The Department of Education (ADE) has
lowered their estimated FY 2008 budget
surplus from $66.1 million to $43.5 million.

forecast”.

Table of Contents
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
January 31, 2008.

December Revenues............................................. 2
Recent Economic Indicators ................................ 3
Summary of Recent Agency Reports
• AHCCCS–Transportation Expenses.................. 5
• AHCCCS –Interstate Agreement ..................... 5
• AHCCCS –SAVE Program .................................. 5
• Attorney General – Expenditures from
Appropriation for Crane Lawsuit ..................... 5
• ADOC – Bed Plan Update....................................6

ADOC/ADOA – Public and Private Beds ........ 6
ADE – Budget Status Report.............................. 6
Intel Corp. – Fab 32 Construction Project......... 6
Commission for Postsecondary Education –
Postsecondary Education Grant...................... 7
• Public Programs Eligibility Report ..................... 7
• ADOT –Local Transp. Assistance Fund II ........ 7
• AZ Dept. of Water Resources – Assured and
Adequate Water Supply Fees .......................... 7
•
•
•
•

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2008

December Revenues
“In the first
6 months of FY
2008, sales tax
revenues are flat

Sales Tax collections were $362.1 million in
December. This amount was flat compared
to last December, and $(32.4) million below
forecast. In the first 6 months of FY 2008, sales
tax revenues are flat compared to last year.
Table 1 displays the December and year-todate growth rates for the major sales tax
categories.
Table 1

compared to last
year”.

Sales Tax Growth Rates

Retail
Contracting
Utilities
Use
Restaurant & Bar

December Year-to-Date
(3.4)%
(1.6)%
(0.2)%
(4.4)%
12.4%
7.6%
11.5%
8.8%
7.0%
2.5%

While sales collections were flat in December,
however, there were significant variations by
sector. Retail and contracting collections
together account for two-thirds of all sales tax
revenues. The retail sector declined by (3.4)%
and contracting by (0.2)%. These decreases
were offset by increases of 12.4% in utilities,
11.5% in use, and 7.0% in restaurant and bar.

“Year to date,
income tax

Individual Income Tax collections were $364.0
million, or 1.0% ahead of last year. Year-todate, income tax collections are (0.8)% below
last year. December collections were $(25.5)
million less than forecast. Table 2 displays
individual category growth rates.
Table 2

collections are
(0.8)% below last
year”.

Individual Income Tax Growth Rates
December Year-to-Date
Withholding
(2.2)%
4.1%
Estimated +
(30.5)%
(11.2)%
Final Payments
Refunds
(97.7)%
22.0%
December withholding was (2.2)% below last
year. The December decrease brings year-todate collections down to 4.1%.
Table 3

Estimated and final payments decreased
from the previous year for the second month
in a row. Payments declined 30% compared
to last December. December and January
are substantial collection months as tax filers
make their quarterly estimated payments in
advance of the January 15th due date.
Given the timing of payment deposits, the
implications of the December collection are
not fully realized until the January payments
are finalized.
December refunds were under $1 million,
partially offsetting the high level of refunds
made in November. After 6 months, refunds
are 22.0% over the first 6 months of last fiscal
year.
Corporate Income Tax collections of $120.1
million were (29.2)% below December of last
year, and $(65.5) million below the forecast for
the month. As noted above, a technical
adjustment was made to the corporate
category in December, bringing collections to
$(37.8) million below forecast.
Corporate consolidated refunds of $(55.5)
million were anticipated to be made in the
second half of the fiscal year. These refunds
represent the final distribution of tax credits
resulting from legislation enacted in 1994
allowing corporations to file consolidated
returns similar to federal returns. Some of
those refunds have already been processed,
which helps explain a portion of the year-todate shortfall.
December marks one of the four significant
months for collections as businesses make
their quarterly payments. The decrease brings
the category to $(75.7) million or (15.5)%
below forecast for the first half of the fiscal
year.

General Fund Revenues
Compared to Enacted Forecast and FY 2007 Collections
($ in Millions)
FY 2008
Difference From
Difference
Collections
Forecast 1/
From FY 2007
December
$ 871.5
$ (84.3)
$ (39.2)
Year-to-Date
$ 4,427.7
$ (393.2)
$ (118.6)
____________
1/ Enacted FY 2008 budget (June 2007).

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2008

Recent Economic Indicators
NATIONAL
The Conference Board’s U.S. Consumer
Confidence Index posted a slight increase in
December, totaling 88.6, or 1.5% above
November levels. The slight increase was
attributed to an increase in the expectations
index. Despite this increase, however, yearover-year, the index fell (19.5)%
The U.S. Index of Leading Economic Indicators
decreased by (0.2)% in December, marking the
third consecutive month of reported declines.
Six of the 10 components that make up the
composite index decreased in December. The
building permit component made the largest
negative contribution, followed by average
working hours in manufacturing.
U.S. semiconductor billings decreased (1.0)% in
November (3-month moving average) to $3.82
billion. Year over year chip sales in the Americas
were down (3.8)%, while total worldwide sales
increased by 2.3%. While unit demand is strong,
the average selling price in key product
segments has declined.
The U.S. Consumer Price Index (CPI) (3-month
moving average) increased by 0.2% in
December. The year over year increase was
4.0%. All sub-indices of the CPI increased in
December, with the index for energy
accounting for almost one-third of the overall
increase.
ARIZONA
December total statewide non-farm
employment increased, year over year, by
1.3%. By comparison, the November year-overyear average growth rate in the prior 10 years
was 3.3%. Arizona’s unemployment rate
increased from 4.1% in November to 4.7% in
December.
While 9 of 11 major industries gained jobs, job
losses occurred in the construction and
government sectors. Construction employment
decreased by (9.7)% compared to December
2006. The average year-over-year growth rate
for December in the past 10 years was 6.4%. Of
all major construction sectors, specialty trades
experienced the greatest losses.
Statewide, the number of single-family
residential building permits (3-month moving
average) declined (41.7)% on a year-over-year

basis, to 1,765. The comparable number of
multi-family building permits authorized
increased, however, to 1,190 between
September and November, resulting in a
year-over-year increase of 138.1%. As in
prior years, permitting activity in the multifamily segment continues to have significant
volatility.
According to statistics released by the Real
Estate Center at Arizona State University, the
number of existing single-family homes sold
in December totaled 3,290, or (28.8)% less
than December 2006 sales. The singlefamily median resale home price also
decrease in December to $232,000, (7.3)%
below the median price during the same
time a year ago. Also decreasing, but at a
lower rate, was the townhouse-condominium
median price which fell (4.6)% below
December 2006 levels, to $167,000.
An alternative method to gauge housing
prices is the S&P/Case-Shiller Home Price
Index, which tracks repeat sales of the same
home. The ASU data, on the other hand,
could be influenced by changes in the
average square feet of sold homes. In
October, the index for Phoenix stood at
200.72, or (10.6)% below October 2006
levels. Besides Phoenix, only 5 other areas
posted double digit, year-over-year
declines. These areas included Miami
(12.6)%, Tampa (11.8)%, Detroit (11.2)%, San
Diego (11.1)%, and Las Vegas (10.7)%.
The Arizona Business Conditions Index (BCI)
dropped (12.1)% in December to 47.3. A
reading of over 50 corresponds to local
economic growth, while a reading below 50
suggests a slowdown in the overall level of
economic activity in the near term. The
reported decline in the index is attributable
primarily to the production component,
followed by the purchases component and
the price index.
An alternative measure of statewide
business sentiment is the University of
Arizona’s Business Leaders Confidence
Index (BLCI). In the 1st quarter of 2008, the
BLCI fell to 40.4, signifying that conditions
continue to deteriorate. At 40.4, the index is
(22.2)% below the index a year ago , and
(4.9)% below the prior quarter. All 6
components contributed to the lower
reading relative to the prior quarter, with the
national economy, capital expenditures

3

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2008

Recent Economic Indicators
and hiring categories registering the biggest
percentage decreases. Like recent surveys,
the sales expectations component continued
to post the highest results while the national
economy remains the lowest.
The Census Bureau reported that Arizona’s
population grew to 6,338,755 in 2007, an
increase of 173,066 from 2006. Only 5 other
states – Texas, California, Georgia, Florida,
and North Carolina – added more people
during the year. Further, Arizona’s estimated
year-over-year growth rate of 2.8% was the
second fastest growth rate in the nation.
Nevada, at 2.9%, had the highest growth rate
on a percentage basis. .
In January, the AHCCCS caseload slightly
increased to 1,086,473 members. At the
current level, the number of AHCCCS
members has increased by 56,771 members or

(continued)

5.5% above January 2007 enrollment.
The number of TANF recipients decreased
(1.3)% in November to 83,393 recipients and is
(1.0)% below the November 2006 count. The
state budget projects 84,700 recipients in FY
2008.
Between October and December , the
Department of Corrections’ inmate population
increased by an average of 37 inmates per
month. At this level, the department’s inmate
population growth is significantly less than the
budgeted increase of 160 inmates per month.
The total population grew by 1,884 inmates
from a year ago to a 3 month average
population of 37,667 inmates.

Table 5

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
- S&P/Case-Shiller Home Price Index
- 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
- Real 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
December
December
Oct-Dec
Oct-Dec

4.7%
2.76 million
186,900
227,700
$76.8 million
$157.5 million

14.6%
0.4%
0.4%
(1.3)%
(0.4)%
(0.8)%

14.6%
1.3%
0.2%
(9.7)%
(5.9)%
(1.6)%

Sep-Nov
Sep-Nov

1,765
1,190

(22.8)%
50.8%

(41.7)%
138.1%

December
December

3,290
635

0.3%
(5.2)%

(28.8)%
(27.8)%

December
December
October
November
October

$232,000
$167,000
200.72
3.4 million
$7.02

(0.8)%
(7.3)%
(2.2)%
(2.9)%
0.9%

September
December

120.4
47.3

(0.9)%
(12.1)%

3rd Quarter 2007
1 st Quarter 2008
3rd Quarter 2007
July 1, 2007
January
November
Oct-Dec

101.9
40.4
$210.9 billion
6.34 million
1,086,473
83,393
37,667

3rd Quarter 2007

$11.7 trillion

4.9%

2.7%

December
December
Sep-Nov
Oct-Dec

88.6
136.5
$3.82 billion
209.7

1.5%
(0.2)%
(1.0)%
0.2%

(19.5)%
(1.1)%
(3.8)%
4.0%

(4.1)%
(4.9)%
1.4%
173,066
0.6%
(1.3)%
37 inmates

(7.3)%
(4.6)%
(10.6)%
(0.4)%
13.2%
0.8%
(13.8)%
(0.8)%
(22.2)%
5.9%
2.8%
5.5%
(1.0)%
1,884 inmates

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2008

5

Summary of Recent Agency Reports
AHCCCS – Report on Emergency and
Non-Emergency Transportation –
Pursuant to Laws 2007, Chapter 263,
AHCCCS is submitting its report on
emergency and non-emergency
transportation. The report lists the
costs of these transportation services
and potential cost-saving
modifications. AHCCCS is federally
mandated to provide emergency
transportation services to AHCCCS
members. In addition, AHCCCS is
required to cover some nonemergency transportation services.
Non-emergency transportation is
provided when free transportation is
unavailable and the recipient is
unable to arrange or pay for
transportation; the service requires
prior authorization and must be
medically necessary and ordered in
writing by a network provider.
A state may classify non-emergency
transportation as an administrative
expense and receive a 50% federal
match or it may classify it as an
optional medical service and receive
the standard 66% federal match.
AHCCCS has chosen to classify nonemergency transportation as an
optional medical service to receive
the higher matching rate. Although
described as an “optional” service,
AHCCCS states that federal regulations require the state to ensure
necessary transportation for AHCCCS
recipients, including both emergency
and non-emergency transportation.
For calendar year 2006, AHCCCS
spent $15.1 million from the General
Fund and $45.4 million in Total Funds
on non-emergency transportation.
This is in addition to the $31.8 million
from the General Fund and $95.4
million in Total Funds spent on
emergency transportation during this
time period. AHCCCS reports that
cost savings could be realized by using
a transportation brokerage program
and requiring members to make
copayments for non-emergency
transportation services. AHCCCS did
not commit to exploring these options.

AHCCCS – Report on Interstate
Agreement with Hawaii – Pursuant to
A.R.S. § 36-2925H and a General
Appropriation Act footnote, AHCCCS
has submitted its annual report on the
status of an Interstate Agreement
with the State of Hawaii.
This report summarizes the continued
activities associated with the
agreement between AHCCCS and
Hawaii for data processing with the
AHCCCS Prepaid Medicaid
Management Information System
(PMMIS). Cost savings to AHCCCS
resulting from this agreement are
deposited into a special fund. This
fund had an ending FY 2007 balance
of $2,170,800, including $555,200
deposited in FY 2007. As per A.R.S. §
36-2926, these funds are limited to
technology projects and IT staff
recruitment. In FY 2008, AHCCCS will
spend a significant portion of these
dollars on equipment replacement
and programming costs for various
programs including Health Insurance
Portability and Accountability Act
(HIPAA) implementation, National
Provider Identifier requirements,
Imaging, Business Continuity, Virtual
Office, and the Decision Support
System.
AHCCCS – Report on Systematic Alien
Verification for Entitlements Program –
Pursuant to A.R.S. § 36-2903.03, the
Arizona Health Care Cost
Containment System (AHCCCS) is
providing its quarterly report on the
collection and verification of
documentation associated with the
Systematic Alien Verification for
Entitlements (SAVE) program. Laws
2006, Chapter 191 requires all
AHCCCS applicants to provide
documentation verifying their
immigration status to qualify for
AHCCCS services. If AHCCCS
determines this documentation to be
fraudulent, the applicant is referred
for prosecution.
AHCCCS, in conjunction with DES,
verified the immigration status of
19,259 individuals between July 1, 2007
and September 30, 2007. Table 1

below shows the number of
verifications completed by agency
by month. This is an increase of 4,725
above the 14,534 verifications that
were completed during the previous
quarter. During this period, AHCCCS
and DES did not identify any
fraudulent documents using the SAVE
program. In the previous quarter
which ended June 30, 2007, AHCCCS
and DES also did not identify any
fraudulent residency documents.
However, 2 citizens were referred for
prosecution pursuant to State and
Federal law regarding fraudulent
schemes.
Table 1

SAVE Immigration Status Verifications
July 1, 2007–September 30, 2007

Month
July
August
September
Total

AHCCCS
1,047
1,033
917
2,997

DES
5,509
5,849
4,904
16,262

Total
6,556
6,882
5,821
19,259

Attorney General - Quarterly Report
on Expenditures from Appropriation
for Crane Lawsuit - In September
2001, 7 school districts filed the Crane
lawsuit, which claimed that the
current Arizona school finance system
is unconstitutional because it does
not provide at-risk students with
programs and funding needed in
order to meet state academic
standards. In FY 2004, the Legislature
appropriated $500,000 to the Attorney
General for legal fees incurred by
outside counsel in defending the state.
Pursuant to Laws 2003, 2nd Special
Session, Chapter 4, the Office of the
Attorney General is required to report
on a quarterly basis to the Joint
Legislative Budget Committee the
amount expended from the
appropriation for the Crane lawsuit.
As of December 31, 2007, a total of
$479,000 has been spent. Of this
amount, $474,600 was spent on
outside legal services and $4,500 was
spent on external printing. The

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2008

Summary of Recent Agency Reports
agency expended $7,600 in FY 2007
and $1,100 in the first half of FY 2008.
The remaining unexpended balance
is $21,000.
Arizona Department of Corrections –
Report on Monthly Bed Plan Update –
The Department of Corrections (ADC)
has provided a report to JLBC Staff
updating the status of several topics
related to their bed plan. The
highlights include the following:
•

•

•

The department received
funding to contract for a total of
2,160 beds at the Diamondback
Facility in Watonga, Oklahoma.
Through December, 2,090 of
those beds were occupied.
Indiana has capped the number
of Arizona inmates housed at
their New Castle Facility at 630
inmates (of 1,260 scheduled
beds). ADC indicates they are in
the process of implementing a
plan to secure replacement beds
and transfer inmates, however,
no further details were provided.
As a result of a disturbance at the
facility on April 24, the Henry
County prosecutor filed charges
against 27 Arizona inmates.
Between September and
November, ADC transferred 916
medium custody inmates to the
Great Plains Facility in Hinton,
Oklahoma. The FY 2008 budget
provided funding to the
department to fill 916 beds
beginning September 2007, and
an additional 424 beds beginning
in May 2008. Currently, ADC
indicates the next transfer will be
delayed until August 2008 as the
facility is under construction and
the transfer would include an
additional 1,084 (not 424)
inmates.

Arizona Department of
Corrections/Arizona Department of
Administration – Report on the Status
of Public and Private Beds – Laws
2007, Chapter 261 authorized the
Arizona Department of Administration
(ADOA) to contract for 2,000 new

private prison beds as well as the
construction of 4,000 new public beds
– to be funded via a 20-year, $200
million lease-purchase agreement.
Chapter 261 also requires ADOA and
the Arizona Department of Corrections
(ADC) to report jointly to Joint
Committee on Capital Review (JCCR)
by the end of each calendar quarter
on the status of the construction of the
new beds.
2,000 Private Beds
Responses to the Request for Proposal
(RFP) issued by ADOA for 2,000
minimum custody private prison beds
were due November 21, 2007. Three
offerors responded, including
Corrections Corporation of America,
The GEO Group, and Management
and Training Corporation. Their
responses are currently being
evaluated and ADOA plans to award
the contract at the beginning of
February. The contract, when
awarded, will include a work plan
and milestones in several areas, such
as, the development of policies and
procedures, hiring and training, and a
construction schedule.
4,000 Public Beds
In December, the JCCR gave a
favorable review for ADOA’s plan to
issue $200 million worth of certificate
of participation’s (COP) to fund the
construction of 4,000 new public
beds. While ADOA’s initial timeline for
COP financing had a targeted
completion date in January, current
estimates indicate the COP’s will be
offered to investors in March.
Also during the second quarter, ADOA
issued a RFP for Architectural services
and a solicitation for Construction
Manager at Risk. The RFP for
architectural services had responses
from 4 private vendors. Only 1 firm
responded to the Construction
Manager at Risk solicitation. All
responses are currently being
evaluated.

(Continued)

Department of Education – Budget
Status Report – Pursuant to A.R.S. §
35-131(D) and a footnote in the FY
2008 General Appropriation Act, the
Arizona Department of Education
(ADE) recently provided an update
regarding its budget status for FY
2008. In that report, ADE estimates
that it will experience a $53.5 million
surplus for FY 2008. Some of those
monies, however, remain in a
dedicated fund if they are unused
and do not revert to the General
Fund. After adjusting for that factor,
the net surplus is $43.5 million. In
comparison, ADE previously reported
a $66.1 million estimated surplus. The
current $43.5 million estimate is
subject to considerable change
once Average Daily Membership
(ADM) counts for the current school
year become available. Those
counts, however, are not expected
to become available until late in the
current fiscal year.
Intel Corporation – Status Report on
the Fab 32 Construction Project –
Laws 2005, Chapter 289 provides that
corporations that meet the conditions
of Chapter 289 may use an enhanced
sales factor in the calculation of
business income for corporate income
tax purposes beginning in Tax Year
2007. Chapter 289 requires that
corporations that have made capital
investment commitments on a
project under this legislation are
required to file a status report on the
project by December 31 of each
year through 2008.
The Intel Corporation’s Fab 32
project, located at Intel’s Ocotillo
Campus in Chandler, is the only
project that has met the conditions of
Chapter 289. Intel reports that the $3
billion Fab 32 building was completed
in 2007 and is the world’s first 45
nanometer high volume manufacturing facility. Intel notes that the
factory’s 45 nanometer process
results in a 15% reduction in global
warming emissions and its water
conservation and reuse program
conserves more than 70% of water

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2008

Summary of Recent Agency Reports
use. The factory began production in
October and employs more than
1,000 engineering and senior manufacturing technician jobs. Intel is
seeking certification for the facility for
achieving the highest environmental
construction standards.
Commission for Postsecondary
Education – Report on Postsecondary
Education Grant Program – A.R.S. §
15-1855 requires the Commission for
Postsecondary Education to report
annually on its Postsecondary
Education Grant (PEG) program.
The PEG program provides grants to
students attending private
postsecondary institutions. The
program was launched in March
2007; therefore the report only reflects
activity for the last 4 months of FY
2007. During that time period, a total
of $1.8 million was disbursed to 1,077
grantees in FY 2007 representing 21
private postsecondary schools.
According to the Commission, there
currently is no waiting list for qualified
applicants.
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
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 221,024 students classified as
in-state. They reported 3,504 students
who were not entitled to be classified
as in-state because of a lack of lawful
immigration status or unverifiable.
Additionally, 55,360 students applied
for financial aid. Of those who
applied, the community colleges
reported that 246 were not entitled to
any aid because they were not a
citizen or legal resident, were not
lawfully present in the United States,
or were unverifiable.
Universities – At the 3 universities,
122,963 students registered for fall
2007 semester. Of the total students
registered, the universities were able
to verify the legal immigration status
of 112,761 students. Additionally, the
universities reported that 8,652 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 406 students were unverifiable
due to their inability to provide the
requisite documentation.
Department of Economic Security –
The Department reported that 13,146
applications were received for child
care assistance. Of this number, 44
were denied because criteria for
citizenship or legal residency were not
met.
Arizona Department of Education –
The Department reported that 18,276
people applied for instruction in
Arizona Adult Education during the
reporting period. Of this amount,
1,149 were denied instruction
because they failed to provide
acceptable evidence of citizenship
or legal residence in the U.S.
Additionally, the Family Literacy

7

(Continued)

Program reported a total of 226
participants for services. Of this
amount, 30 were not eligible for
enrollment.
ADOT –– Report on Local
Transportation Assistance Fund II
(Mass Transit) – A.R.S. § 28-8103
requires the Arizona Department of
Transportation (ADOT) to submit an
annual report on the allocation of
Local Transportation Assistance Fund
II (LTAF II) monies by January 1st of
each year. The statutory maximum
annual allocation is $18,000,000.
ADOT reports that they allocated
$10,098,200 of FY 2007 LTAF II revenue
to counties and local governments.
ADOT distributed the $10,098,200 of
FY 2007 revenues the following fiscal
year on October 15, 2007.
Arizona Department of Water
Resources – Report on Assured and
Adequate Water Supply Program
Fees – Pursuant to a FY 2008 General
Appropriation Act footnote, the
Arizona Department of Water
Resources (DWR) has submitted the
amount of fees collected by the
Assured and Adequate Water Supply
(AAWS) program.
Laws 2005, Chapter 217 established
the fund to provide for the costs and
expenses incurred by DWR when
determining and declaring assured
and adequate water supplies. The
AAWS Administration Fund consists of
monies that are paid to the DWR for
applications related to assured and
adequate water supplies. Previously,
fees were deposited into the General
Fund.
DWR reports that for the quarter
ending December 31, 2007, the
department collected $152,249,
bringing year-to-date collections for
the first half of FY 2008 to $273,531. This
amount is 19% below collections for
the same period in FY 2007. Actual
collections have been lower than
expected, which DWR notes is due to
the declining housing market. The
department previously estimated
total FY 2008 revenues of $1.1 million.

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2008

State of Arizona
General Fund Revenue

Change from Previous Year and Enacted Forecast
December 2007
Current Month

FY 2008 YTD (Six Months)

Change From
December 2006

Actual
December 2007

Percent

Amount

Change from
Forecast
Percent

Amount

December 2006

Actual
December 2007

Forecast

Percent

Amount

Percent

Amount

Taxes
Sales and Use

362,105,035

($131,355)

Income - Individual

363,998,775

3,531,085

1.0

(25,522,725)

(6.6)

1,772,870,339

(14,203,741)

(0.8)

(164,206,961)

(8.5)

120,092,770

(49,498,025)

(29.2)

(37,786,530)

(23.9)

414,071,378

(76,835,989)

(15.7)

(75,740,222)

(15.5)

- Corporate

(0.0) %

($32,370,365)

(8.2) %

$2,228,380,939

$65,379

0.0 %

($184,734,961)

(7.7) %

Property

4,812,177

(509,244)

(9.6)

(1,187,823)

(19.8)

10,593,212

(2,896,148)

(21.5)

(6,906,788)

(39.5)

Luxury

5,202,446

(1,257,751)

(19.5)

(712,554)

(12.0)

30,165,086

(7,595,817)

(20.1)

(5,324,914)

(15.0)

31,678,231

2,430,022

8.3

26.7

152,244,870

8,480,001

5.9

11,144,870

7.9

--

260,778

1,213,451

(30.5)

287,191

(27,079)

$4,608,873,793

($91,799,943)

Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

0

(44,456) (100.0)

45,245

(4,360)

$887,934,679

($45,484,084)

(8.8)
(4.9) %

6,678,231
0
(19,880)
($90,921,646)

(9.3) %

-(8.6)
(2.0) %

260,778
(103,559)
($425,611,757)

-(26.5)
(8.5) %

Other Revenue
Lottery

3,280,200

653,300

24.9

926,500

39.4

17,014,719

License, Fees and Permits

2,891,123

(383,185)

(11.7)

(421,477)

(12.7)

18,483,760

(3,915,946)

(17.5)

(2,631,040)

Interest

9,806,297

1,018,158

11.6

1,754,297

21.8

56,877,281

13,265,022

30.4

16,079,381

39.4

Sales and Services

5,455,698

1,642,573

43.1

605,998

12.5

22,619,956

2,011,241

9.8

(2,696,244)

(10.7)

Other Miscellaneous

1,982,848

(30.1)

(705,252)

(26.2)

13,070,488

(2,537,751)

(16.3)

2,104,688

19.2

--

0

0

--

0

33,013,446

30,080,549

--

18,753,446

39,892,534

32.9 %

32,433,350

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

(854,235)

0

0

17,202,559

15,362,861

40,618,725

17,439,472

$928,553,404

($28,044,612)

-835.1
75.2 %
(2.9) %

0
4,492,559

35.3

6,652,625

19.6 %

161,079,650

(8.3) %

$4,769,953,443

($84,269,021)

989,419

($51,907,409)

6.2

(1.1) %

823,119

($393,178,407)

5.1
(12.5)

-131.5
25.2 %
(7.6) %

One-Time Revenue
Urban Revenue Sharing

(57,044,911)

(11,109,023)

24.2

0

0.0

(342,269,463)

(66,654,133)

24.2

0

0.0

Sub-Total One-Time Revenue

(57,044,911)

(11,109,023)

24.2 %

0

0.0 %

(342,269,463)

(66,654,133)

24.2 %

0

0.0 %

($39,153,635)

(4.3) %

($118,561,542)

(2.6) %

TOTAL REVENUE

$871,508,493

($84,269,021)

(8.8) %

$4,427,683,980

($393,178,407)

(8.2) %