JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

Summary
• December corporate income tax collections
were (7.2)% below December of 2007, and
were $(29.1) million below the forecast.

December General Fund revenue collections
were $752.6 million, or (13.7)% below
December 2007. December collections were
$(155.0) million below the June 2008 enacted
budget forecast for the month.

As noted in previous months, revenues would
need to grow by 6.1% for the entire year to
meet the budget forecast. Given the decline
of (10.2)% in the first 6 months, revenues will fall
significantly short of the budget forecast.

For the first 6 months of FY 2009, General Fund
collections are down (10.2)% when compared
to last year (excluding Urban Revenue Sharing
and one-time transfers). The year-to-date
revenue shortfall through the first 6 months of
the fiscal year is $(728.5) million. (See Table 1
and page 2 for more information). JLBC Staff
had previously reported on these December
results at the Finance Advisory Committee
meeting earlier this month.

A Finance Advisory Committee meeting was
held on January 13th. (See summary on page
6). Based on the 4-sector consensus forecast,
FY 2009 revenues are projected to decrease
(9.4)% compared to the prior year. Based on
this projection, the FY 2009 shortfall is estimated
to be $(1.6) billion.

The state’s three largest revenues categories
experienced significant declines:
“December
collections were
$(155.0) million
below…
forecast”.

January 2009

Economic Indicators – More record-setting
economic data was reported in the last
month. The job market in Arizona continues to
weaken (see page 3). The state’s workforce
decreased year-over-year by (4.3)% in
December, the highest percentage decline
since June 1975. The state lost (116,500) jobs in
2008, which is the largest number on record.
The second largest job loss occurred in 2001
when the state shed (30,000) jobs. There were
602 single-family building permits issued in
November, which was the lowest amount
since at least July 1969 (see page 4).

• December sales tax collections were down
(16.4)% compared to December 2007 and
were $(79.7) million short of the monthly
forecast. December marked the 12th
consecutive month of year-over-year
reductions. The December results, which
represent November sales, reflect the
second month of double digit declines in
sales tax collections compared to the
previous year since the steep decline in the
national economy in mid-September.

JLBC/JCCR Meetings – There were no JLBC or
JCCR meetings in January.

• December individual income tax collections
were down (6.2)% compared to December
2007 and were $(43.1) million below
forecast.

Table of Contents
December Revenues ............................................. 2
Economic Indicators .............................................. 3
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
January 30, 2009.

Finance Advisory Committee Meeting............... 6
Summary of Recent Agency Reports
• AHCCCS – Report on Healthcare Group ....... 7
• AHCCCS – ISA Report ........................................ 7
• Attorney General – Incarceration Costs ........ 7

•
•
•
•
•
•
•
•

City of Phoenix – Convention Center ............ 7
DOC/ADOA – Public and Private Beds .......... 7
DHS – Report on Vaccines Program ............... 8
Commission of Indian Affairs – Town Hall ....... 8
Intel Corp – Fab 32 Construction Project........ 8
Land Dept. – Fire Suppression Activities.......... 8
Public Programs Eligibility Report .................... 8
ADOT – LTAF II ...................................................... 9

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

December Revenues
Table 1

December General Fund Revenues
Compared to Enacted Forecast and FY 2008 Collections
($ in Millions)
FY 2009
Difference From
Difference
Collections
June ‘08 Forecast
From FY 2008
December
$752.6
$(155.0)
$(119.1)
Year-to-Date
$4,128.7
$(728.5)
$(297.0)
Sales Tax collections were $302.8 million in
December. These revenues were down
(16.4)% compared to last December, and
were $(79.7) million below forecast. Table 2
displays the December growth rates for the
largest categories.
“Sales Tax
collections
were…down
(16.4)%
compared to last
December, and
were $(79.7)
million below
forecast”.

Table 2

Table 4

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Utilities
Use
Restaurant & Bar

Dec
(13.9)%
(29.2)%
(3.5)%
(20.9)%
(8.8)%

YTD
(10.4)%
(20.1)%
4.9%
(6.1)%
(5.8)%

As noted in previous months, retail and contracting together account for two-thirds of all
sales tax revenues. The retail sector decreased
by (13.9)% and contracting fell by (29.2)%.
For November (the latest available
subcategory data), taxable sales in the retail
category are down (9.7)% from the prior year.
The largest subcategory within retail is the
General Merchandise and Miscellaneous
Retail category, which is down (4.5)%. The
largest subcategory decline is in Motor
Vehicles, which represents 21.4% of the total,
and is down (30.8)% compared to the prior
year. Taxable retail sales by category are
shown in Table 3. (Eric Jorgensen)
Table 3

Individual Income Tax collections were $341.3
million in December, or (6.2)% below last year.
December collections were $(43.1) million less
than forecast. Table 4 displays December
and year-to-date growth rates for individual
categories.
Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

December
(1.5)%
(0.4)%
na

16.0%

As indicated last month, there were 2 fewer
processing days in November this year than in
the same month last year, and December had
2 more processing days. As a result,
withholding tax and estimated payment
collections did not decrease as much in
December as they did in November. However,
refunds were significantly above December
last year, and through December, year-todate individual income tax collections remain
at the November level of (6.6)% below last
year. (Hans Olofsson)
Corporate Income Tax collections were $111.5
million in December, or (7.2)% below last year.
Collections were $(29.1) million below forecast
for the month. December is one of the large

November Taxable Retail Sales by Subcategory

General/Misc. Merchandise
Motor Vehicles/Misc. Auto.
Bldg Materials and Supplies
Food and Liquor Stores
Furniture, Home Furnishings
Clothing and Accessories
Manufacturing
Other Subcategories
Total

YTD
(1.8)%
(16.2)%

% of
Total Sales
30.2%
21.4%
7.5%
7.3%
6.9%
5.8%
5.6%
15.3%
100.0%

% Change
Over FY 2008
(4.5)%
(30.8)%
(12.2)%
(2.7)%
(12.1)%
(10.5)%
(8.5)%
7.6%
(9.7)%

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JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

December Revenues
collection months for corporate income tax.
Collections are (26.4)% below the first 6
months of last year. (Martin Lorenzo)
The Lottery Commission reports that ticket sales
for the month of December were 2.1% over

(Continued)

December of last year. Year-to-date, ticket
sales are down (2.3)% compared to last year.
Through December, a total of $23.7 million in
lottery revenues has been deposited into the
General Fund.

Economic Indicators
“The state’s
unemployment
rate increased to
6.9% from 6.3% in
the prior month.
This was the
sharpest monthly
increase of the
state’s
unemployment
rate since May
1982.”

NATIONAL
The nation’s output of goods and services in
the 4th quarter of 2008 contracted by (3.8)%,
according to the federal Bureau of Economic
Analysis’ advance estimate of the real Gross
Domestic Product. While the decline was less
than generally expected, it still represented
the largest contraction of the nation’s
economy since the first quarter of 1982.
Absent the large increase in inventories during
the 4th quarter, the decline in real GDP would
have been significantly steeper.
The Conference Board’s U.S. Consumer
Confidence Index for January declined from
38.6 to 37.7, the lowest confidence reading in
the 42-year history of the survey. The index is
now down by (56.8)% compared to a year
ago. Assessments of both current and future
conditions are being affected by the recent
string of layoff announcements by some of
the world’s largest corporations.
The Conference Board’s U.S. Index of Leading
Economic Indicators increased by 0.3% in
December. Year-over-year, the index is down
by (3.0)%. Although 4 of the 10 components
that make up the composite index advanced
in December, only two of them — money
supply and the interest rate spread — made
significant positive contributions owing to the
large injection of liquidity by the Federal
Reserve. Absent these actions, the index
would have declined significantly.
The U.S. Consumer Price Index fell by (0.7)% in
December. The sharp decline in prices over
the last 3 months has left the CPI only 0.1%
above its level one year ago. With the
recession expected to worsen during the first
half of 2009, the year-over-year measure will
likely turn negative in the upcoming months.

ARIZONA
The release of new economic data for the
state points to a situation that is becoming
increasingly worrisome. Businesses are
shedding jobs at unprecedented levels,
confidence is at a record low, and home
prices are continuing their decline.
The Arizona Department of Commerce
reported that the state lost (116,500) or (4.3)%
of nonfarm jobs in December compared to
the same month last year. The December job
loss (in percentage terms) was the largest
since June 1975 when the state experienced
a year-over-year decline of (4.6)%.
Based on data furnished by the federal
Bureau of Labor Statistics (BLS), Arizona has
only seen a net loss of jobs in 9 of the last 69
years. The loss of (116,500) jobs in 2008 is the
largest on record. The second largest job loss
occurred in 2001 when the state shed (30,000)
jobs.
The December employment report shows that
job losses in the construction sector have
accelerated in recent months. In December,
the state had (43,800) fewer construction
workers than in the same month last year.
The comparable figures for October and
November were (38,100) and (41,500),
respectively. The industry now employs
approximately the same number of
individuals as in February 2002.
The manufacturing sector is also continuing to
decline, but at a considerably slower rate
than other goods-producing industries. The
year-over-year decline in December was
(2.4)%, which translates into a loss of (4,300)
manufacturing jobs.
The state is also experiencing significant job

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JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

Economic Indicators
declines in retail and employment services
with December year-over-year losses of
(25,200) and (20,500), respectively.
December marked the 8th consecutive month
with rising unemployment. The state’s
unemployment rate increased to 6.9% from
6.3% in the prior month. This was the sharpest
monthly increase of the state’s
unemployment rate since May 1982. The
nation’s unemployment rate was 7.2%, which
is the highest since January 1993.

“The Business
Leaders
Confidence
Index for the 1st
quarter of 2009
fell from 42.4 to
32.1, the steepest
decline in the
history of the
index.”

The Department of Commerce reported that
34,409 initial claims for unemployment
insurance were filed in December, an
increase of 128.6% over last year. This is the
largest increase on record. (Monthly
unemployment insurance data is available
from January 1971).
The large volume of foreclosed properties
continues to weigh on the housing market
especially with respect to existing home prices
and the issuance of new building permits.
Between September and November, the
number of authorized building permits
statewide (3-month moving average) totaled
1,352, including 856 single-family residential
building permits and 496 multi-family building
permits. These figures represent a year-overyear decline of (51.5)% for single family
permits and (58.3)% for multi-family permits.
November’s issuance of 602 single-family
building permits was the lowest figure since at
least July 1969. (Data before this time is not
available.)
According to recent data released by ASU’s
Realty Studies, a total of 81,700 existing singlefamily homes were sold in Greater Phoenix in
2008. While this level represents the third best
year on record in terms of sales volume, it
masks the fact that this figure included the
sale of 34,955 foreclosed properties, or 43% of
all existing single family homes sold. The
comparable share of foreclosed homes in
2007 was 15.6%. For December alone, ASU
reported a total of 7,425 existing home sales,
including 4,315 traditional sales and 3,110
foreclosures. These figures constitute a yearover-year increase of 68.9% for traditional
home sales and 131.2% for foreclosed
properties.
While the large volume of foreclosed

(Continued)

properties has contributed to a significant
increase in home sales, it has also resulted in a
sharp reduction in housing prices. Based on
the December report, the Greater Phoenix
single-family median resale home price was
$146,000 for traditional homes and $148,340
for foreclosed properties. Compared to a
year ago, the median resale price is now
(39.2)% lower for traditional single-family units
and (27.7)% lower for foreclosed properties.
Unlike the existing housing market, the market
for new homes performed poorly in 2008. The
number of new homes sold in Greater Phoenix
in 2008 was slightly less than 15,000, a decline
of (42.1)% from the prior year, and the lowest
level since 1993. The large supply of relatively
inexpensive foreclosed properties on the
market effectively “crowded out” the sale of
new homes in Greater Phoenix.
The S&P/Case-Shiller Home Price Index is a
measure of the change in housing prices
based on repeat sales. According to the
most recent release of this measure, home
prices in Phoenix fell by (32.9)% in November,
the largest year-over-year decline among the
20 metropolitan areas included in the index.
As of November, Phoenix has experienced 23
straight months with accelerating price
declines.
Based on MLS data, it is estimated that the
month’s supply of housing decreased from
11.3 months in November to 8.9 months in
December. While this is a sizeable
improvement, the National Association of
Realtors cautions that such housing inventory
measures are currently understated since
many foreclosed homes are not included in
the MLS database.
Total passenger traffic recorded in November
at Phoenix Sky Harbor International Airport
was (12.8)% below the same month in the
prior year. Year-to-date, a total of 36.7 million
passengers have entered and exited aircraft
at Sky Harbor. This figure represents a decline
of (5.7)% relative to the first 11 months of 2007.
The air passenger data suggests that the
deteriorating economy has already taken its
toll on tourism and business related travels.
The Business Leaders Confidence Index for
the 1st quarter of 2009 fell from 42.4 to 32.1,
the steepest decline in the history of the
index. The measure is now at a record low

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JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

Economic Indicators

(Continued)

The Department of Corrections’ (ADC) inmate
population increased by an average of 69
inmates per month between October and
December. ADC now has an average
population of 39,495 inmates, or 1,828 more
inmates than in the same period last year.
(Hans Olofsson, Martin Lorenzo)

level. A reading below 50 indicates a
contracting economy.
AHCCCS caseloads in January decreased by
(0.1)%, or (798) members, to 1,115,900. At
current levels, the AHCCCS caseloads are 6.0%
above January 2008 levels. The FY 2009
budget funded a projected caseload growth
of 2.6%, or a total of 1,189,224 members.
There were a reported 84,320 TANF recipients
in the state in November, an increase of 0.7%
from the prior month. Year-over-year,
caseload is up by 1.1%. The FY 2009 budget
assumes the TANF caseload will grow by
2.5%.

Table 5

ECONOMIC INDICATORS
Indicator
Arizona
- Unemployment Rate
- Initial Unemployment Insurance Claims
- 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, Traditional Sales
Single-Family, Foreclosed Sales
Townhouse/Condominium, Traditional Sales
Townhouse/Condominium, Foreclosed Sales
- Greater Phoenix Median Home Sales Price
Single-Family, Traditional Sales
Single-Family, Foreclosed Sales
Townhouse/Condominium, Traditional Sales
Townhouse/Condominium, Foreclosed Sales
S&P/Case-Shiller Home Price Index (Jan. 2000 = 100)
- Months Supply of Housing, SA (ARMLS)
- Phoenix Sky Harbor Air Passengers
- Arizona Average Natural Gas Price
($ per thousand cubic feet)
- Consumer Confidence Index (1985 = 100)
- 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 (1985 = 100)
- Leading Indicators Index (2004 = 100)
- U.S. Semiconductor Billings (3-month moving average)
- Consumer Price Index, SA (1982-84 = 100)

Time Period

Current Value

Change From
Prior Period

Change From
Prior Year

December
December
December
December
December
Oct-Dec
Oct-Dec

6.9%
34,409
2.58 million
176,300
167,800
$59.6 million
$137.9 million

0.6%
13.3%
(0.5)%
(0.1)%
(3.3)%
(3.9)%
(2.2)%

2.7%
128.6%
(4.3)%
(2.4)%
(20.7)%
(22.0)%
(12.4)%

Sept-Nov
Sept-Nov

856
496

(24.3)%
1.2%

(51.5)%
(58.3)%

December
December
December
December

4,315
3,110
440
285

28.0%
0.5%
44.3%
7.5%

68.9%
131.2%
(24.8)%
216.7%

December
December
December
December
November
December
November
October

$146,000
$148,340
$137,250
$119,550
130.54
8.9 months
3.0 million
$5.67

2nd Quarter 2008
1st Quarter 2009
3rd Quarter 2008
July 1, 2008
January
November
Oct-Dec

73.4
32.1
$214.8 billion
6.50 million
1,115,900
84,320
39,495

(8.0)%
(24.3)%
(0.3)%
146,759
(0.1)%
0.7%
69 inmates

(31.0)%
(20.5)%
2.2%
2.3%
6.0%
1.1%
1,828 inmates

4th Quarter 2008

$11.6 trillion

(3.8)%

(0.2)%

January
December
Sep-Nov
December

37.7
99.5
$3.08 billion
211.490

(2.3)%
0.3%
(4.0)%
(0.7)%

(56.8)%
(3.0)%
(19.5)%
(0.1)%

(9.9)%
(4.4)%
0.3%
3.2%
(3.4)%
(2.4) months
(6.0)%
(12.8)%

(39.2)%
(27.7)%
(19.3)%
(20.4)%
(32.9)%
(5.6) months
(12.8)%
(19.2)%

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

FAC Meeting
At its January 13th, 2009 meeting, the Finance
Advisory Committee (FAC) heard presentations
on General Fund Revenue collections, the U.S.
economy, and the state economy. The FAC is
a 15-member panel comprised of leading
economists in the state. The panel meets 3
times a year and advises the Legislature on the
state economy.
JLBC Staff provided members with the latest 4sector consensus estimates for “Big 3” revenue
collections. The 4-sector consensus estimate is
a composite of equally weighted estimates
from:
•
The University of Arizona Economic and
Business Research (EBR) General Fund
baseline model;
•
The EBR conservative forecast model;
•
The FAC panel; and
•
JLBC Staff.
Based on the 4-sector consensus, revenues are
projected to decline by (9.4)% in FY 2009, prior
to any tax law changes. This is down from the
October FAC meeting, at which time the 4sector consensus projected a FY 2009 decline
of (4.4)%. Year to date collections through
December are down (10.2)% as compared to
the same period last year.
In FY 2010, the 4-sector consensus predicts a
further decline in revenues of (2.8)%.
Panel members also heard formal presentations
from Elliott Pollack, Marshall Vest, and State
Treasurer Dean Martin.
Committee members had an unfavorable
outlook with regard to economic and revenue
growth going forward. There was discussion of
the continuation of the credit crunch and the
downturn in the real estate market as the
primary reasons for concern.
Members noted that the adverse impacts of
the housing slump and credit crunch continued
to be felt in lowered consumer spending,
increased unemployment, and higher rates on
loans outside the highly leveraged and risky
loans that initiated the constriction of credit.
The Committee generally expects economic
growth to bottom out sometime in FY 2009 or FY
2010. With regard to the duration of the
slowdown, most members believe it will last
several years, and be followed by a gradual

recovery.
Overall, the 4-sector consensus model
projects two to three years of below trend
revenue growth before returning to the 7%
trend level in FY 2012. In general, the
presenters concurred with these projections,
but seemed to suggest that there are more
downside than upside risks to the 4-sector
consensus, particularly in FY 2009 and FY 2010.
(Tim Everill)

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

Summary of Recent Agency Reports
AHCCCS – Report on Healthcare Group –
AHCCCS reports that, as of November 2008,
total statewide Healthcare Group (HCG)
medical plan enrollment was 17,300, with
participating members from 6,424 employers.
Since October 2007, enrollment has
decreased by (4,346) people. AHCCCS
reports that the new rates that went into
effect in September are responsible for some
of this decline in member months. In
September, member months declined by
approximately 5%, but the 15% increase in
premiums for HMOs and 18% for PPOs led to a
revenue increase of 12.5% during September.
In its annual audit, AHCCCS reported that
HCG had $15.8 million in unpaid prior year
obligations and other liabilities at the end of
FY 2008. During the first quarter of the FY 2009,
HCG reports an additional $193,900 net loss,
excluding any of its $5 million in General Fund
subsidy. (Amy Upston)
AHCCCS – Report on Interstate Agreement
with Hawaii – Pursuant to A.R.S. § 36-2925H, the
Arizona Health Care Cost Containment System
(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. This agreement’s proceeds
are deposited into a special fund. This fund
had an ending FY 2008 balance of $1,172,500.
A.R.S. § 36-2926 limits these funds to
technology projects and Information
Technology (IT) staff recruitment. (Blake
Riley/Amy Upston)
Attorney General – Report on Incarceration
Costs Offset by Monetary Judgments –
Pursuant to A.R.S. § 31-238, the Office of the
Attorney General is required to report semiannually on the use of monetary judgments
awarded to inmates to offset the costs of
incarceration. From July 1, 2008 to December
31, 2008, the state did not exercise its right to
offset the costs of incarcerating inmates
under this statute, since no monetary
judgments were awarded during this time
period. (Marge Zylla)
City of Phoenix – Report on the Phoenix
Convention Center Expansion Project – The
City of Phoenix has issued its ninth progress
report on the Convention Center expansion
project.

The state’s obligation for the Convention
Center expansion project is to pay the debt
service and related costs on $300 million in
construction bonds.
Based on the City’s report, the expansion is
essentially finished and the final certificate of
completion is anticipated in the 1st quarter of
calendar year 2009.
The state’s financial obligation begins in the
fiscal year after the certificate has been filed.
As a result, the state’s obligation would begin
in FY 2010. The payment schedule would be $5
million in FY 2010, and increases by $5 million
each year through FY 2013. The state’s
obligation would eventually equal $30 million
annually. (Tim Everill)
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. Highlights of this
report are as follows:
2,000 Private Beds
•
ADOA, pursuant to Laws 2007, Chapter
261, has transferred primary contract
oversight to the Arizona Department of
Corrections (ADC).
•
The final per diem rate associated with
the 2,000 private bed contract is $62.16.
This rate will be effective upon ADC
occupying the first bed of the 2,000 new
beds and will also be applied to the
existing 1,400 beds at the facility.
4,000 Public Beds
•
Construction at all facilities is anticipated
to be completed January 31, 2010 and
beds are anticipated to be filled at a
rate of 400 per week (100 beds at each
of the 4 facilities) starting March 15, 2010.
•
The Construction Manager at Risk has
received a guaranteed maximum price
from its vendors totaling $168.8 million, or
$(3.2) million below their previous
estimate. As a result, the overall project
cost has fallen to $193 million, resulting in
a contingency amount of $9 million.
•
If available, the $9 million in contingency
monies would be used to fund additional

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

Summary of Recent Agency Reports
construction, infrastructure, and
equipment previously omitted
from the project due to budget
constraints.
(Martin Lorenzo)
Department of Health Services –
Report on Federal 317 Vaccines
Program –The Department of Health
Services (DHS) has submitted a
report on the amount of federal
monies received for FY 2009 for the
Federal 317 Vaccines program,
which provides immunizations to
children in public settings, such as
malls and clinics. The department
reports that as of January 21, 2009, it
has received $41,100 in Federal 317
monies. The vaccine orders for the
Vaccines for Children Direct
Assistance and 317 Direct Assistance
amounts are no longer shared with
the department. Instead, DHS is
provided with an estimated target
budget which serves as a ceiling for
Arizona’s vaccine purchase. For FY
2009, the target amount is
approximately $80 million. In FY
2008, the target amount was $74
million. (Art Smith)
Arizona Commission of Indian Affairs
– Report on Uses of Monies in the
Arizona Indian Town Hall Fund –
Pursuant to A.R.S. § 41-545, the
Arizona Commission of Indian Affairs
is providing the annual Indian Town
Hall Fund expenditure report for
FY 2008. New fund revenues during
the 28th Annual Indian Town Hall
totaled $10,970. For FY 2008, the
commission had $8,567 in
disbursements. (Jack Brown)
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 use. The factory
began production in October 2007,
and the project has created more
than 1,000 engineering and senior
manufacturing technician jobs. Intel
is seeking certification for the facility
for achieving the highest
environmental construction
standards. (Tim Everill)
State Land Department – Report on
Fire Suppression Activities – A.R.S. §
37-623.02E requires the State Land
Commissioner to submit a report by
December 31 of each year on the
uses of monies authorized to be
expended from the Fire Suppression
Revolving Fund. In FY 2008, there
was a total of $18.5 million in liability
incurred by the fund. Of the liability,
the department made payments of
$13.3 million in FY 2008.
In terms of fire fighting activity, Fire
Suppression Revolving Fund monies
were used to fight a total of 697 fires,
resulting in a total liability of $16.8
million. (Jay Chilton)
Public Programs Eligibility Report – As
enacted in the 2006 election,
Proposition 300 limits participation in
certain state programs to citizens,
legal residents, or other persons
lawfully present in the United States,
and requires semi-annual reports to
the Joint Legislative Budget
Committee. Below is a summary of

(Continued)

the reports:
Community Colleges – District-wide,
the Community Colleges reported a
total of 243,449 students classified as
in-state. They reported 2,981
students who were not entitled to be
classified as in-state because of a
lack of lawful immigration status.
Additionally, 71,965 students applied
for financial aid. Of those who
applied, the community colleges
reported that 624 were not entitled
to any aid because they were not
lawfully present in the United States.
Universities – At the 3 universities,
126,883 students registered for the
fall 2008 semester. Of the total
students registered, the universities
were able to verify the legal
immigration status of 115,088
students. Additionally, the
universities reported that 11,427 of
these students did not require
verification because they have
either not requested or received instate tuition or state supported
financial aid. The universities
reported that a total of 368 students
were unverifiable due
to their inability to provide the
requisite documentation.
Department of Economic Security –
The department reported that 18,400
applications were received for child
care assistance during the reporting
period of May 1, 2008 to November
30, 2008. Of this number, 40 were
denied because criteria for
citizenship or legal residency were
not met.
Arizona Department of Education –
The department reported that
20,060 people applied for
instruction in Arizona Adult
Education during the reporting
period of June 1, 2008 to December
1, 2008. Of this amount, 470 were
denied instruction because they
failed to provide acceptable
evidence of citizenship or legal
residence in the United States.
Additionally, the Family Literacy
Program reported a total of 485

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

Summary of Recent Agency Reports (Continued)
applicants for services in FY 2008. Of
this amount, 346 were not eligible for
enrollment. (Leah Kritzer)
Department of Transportation –
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
$11,682,700 of FY 2008 LTAF II
revenue to counties and local
governments in December 2008.
(Bob Hull)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – JANUARY 2009

State of Arizona
General Fund Revenue:

Change from Previous Year and Enacted Forecast
December 2008
Current Month

FY 2009 YTD (Six Months)

Change From
December 2007

Actual
December 2008

Percent

Amount

Change from
Forecast
Percent

Amount

December 2007

Actual
December 2008

Forecast

Percent

Amount

Percent

Amount

Taxes
Sales and Use

302,821,227

($59,283,808)

(16.4) %

($79,651,573)

$2,001,316,420

($227,064,520)

(10.2) %

($348,773,580)

Income - Individual

341,281,282

(22,710,358)

(6.2)

(43,105,518)

(11.2)

1,654,691,456

(116,076,775)

(6.6)

(217,050,944)

(11.6)

111,461,422

(8,631,348)

(7.2)

(29,126,778)

(20.7)

304,663,625

(109,407,753)

(26.4)

(144,675,875)

(32.2)

Property

4,253,521

(558,656)

(11.6)

(830,479)

(16.3)

10,020,386

(572,826)

(5.4)

(3,752,914)

(27.2)

Luxury

4,974,559

(392,611)

(7.3)

(5,141)

(0.1)

29,601,939

(727,871)

(2.4)

(715,061)

18.6

163,415,665

- Corporate

Insurance Premium
Estate
Other Taxes

36,260,343
0

4,582,112
0

14.5
--

42,043

(3,202)

$801,094,397

($86,997,871)

Lottery

1,207,700

(2,072,500)

(63.2)

License, Fees and Permits

2,272,532

(618,591)

(21.4)

Sub-Total Taxes

(7.1)
(9.8) %

5,685,943
0
(10,457)
($147,044,003)

(20.8) %

11,170,795

7.3

21,614,465

--

104,313

(156,465)

(60.0)

104,313

(19.9)

267,109

(20,082)

(7.0)

(47,891)

$4,164,080,913

($442,855,497)

(15.5) %

(9.6) %

($693,297,487)

(14.8) %

(2.4)
15.2
-(15.2)
(14.3) %

Other Revenue
0
(1,026,668)

0.0

23,726,400

6,711,681

39.4

(31.1)

16,926,501

(1,557,259)

(8.4)

(3,973,999)

0

0.0
(19.0)

Interest

1,122,029

(8,684,268)

(88.6)

(4,213,171)

(79.0)

9,088,685

(47,788,596)

(84.0)

(15,576,815)

(63.2)

Sales and Services

3,611,444

(1,844,254)

(33.8)

(1,975,156)

(35.4)

19,001,474

(3,618,482)

(16.0)

(8,946,026)

(32.0)

Other Miscellaneous

2,716,306

733,458

(292,194)

(9.7)

22,148,862

9,078,374

69.5

8,239,562

59.2

0

0

--

0

0

(27.2)

22,042,465

(7,094,802)

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

37.0
--

0
(452,300)

--

0

(24.3)

1,502,665

7.3

--

1,207,700

(12,118,680)

(90.9)

12,137,711

(24,604,835)

(67.0) %

(7,959,489)

(39.6) %

112,934,387

(44,269,084)

(28.2) %

(18,754,613)

(14.2) %

$813,232,108

($111,602,706)

(12.1) %

($155,003,492)

(16.0) %

$4,277,015,300

($487,124,581)

(10.2) %

($712,052,100)

(14.3) %

Other Adjustments
Urban Revenue Sharing
Budget Plan Transfers
Sub-Total Other Adjustments
TOTAL REVENUE

(60,639,783)
0
(60,639,783)
$752,592,325

(3,594,872)
(3,876,179)

6.3
(100.0)

(7,471,051)

14.1 %

($119,073,757)

(13.7) %

0

(363,838,700)

(21,569,237)

0

--

215,546,792

211,670,613

0

0.0 %

(148,291,908)

190,101,376

($155,003,492)

0.0

(17.1) %

$4,128,723,392

($297,023,205)

6.3
--

0

0.0

(16,404,600)

(7.1)

(56.2) %

(16,404,600)

12.4 %

(6.7) %

($728,456,700)

(15.0) %