JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

“February
collections
were… $(73.3)
million below the
January revised
budget
forecast”.

March 2009

Summary
FY 2009 Revenue Projections

February General Fund revenue collections
were $403.4 million. This amount included
$176.2 million in budgeted fund transfers from
the January Special Session. Excluding these
transfers and Urban Revenue Sharing,
February collections were (33.4)% below the
prior year, and $(73.3) million below the
January revised budget forecast.

The Legislature enacted a revised FY 2009
budget during the 1st Special Session in the last
week of January. These revisions resolved a
projected $1.6 billion budget shortfall primarily
due to lower than expected revenue
collections. This shortfall was based on the
January 4-sector consensus revenue estimate,
including input from the Finance Advisory
Committee (FAC), two University of Arizona
econometric models, and the JLBC Staff
forecast.

The February decrease of (33.4)%, is somewhat
misleading. February is a low individual
income tax collection month due to the initial
issuance of tax season refunds. Due to a
decline in withholding, individual income taxes
decreased from $39 million in February 2008 to
$(41) million this year, a reduction of (207)%.

This January base revenue estimate was $8.54
billion, excluding Urban Revenue Sharing and
one-time financing sources. This amount
would be a (9.7)% reduction in base revenues
compared to FY 2008. In comparison, the
December year-to-date revenue loss was
(10.2)%. The January and February results,
however, have pushed the year-to-date
decline to (13.5)%.

Sales taxes and individual income tax
withholding are the 2 main sources of revenue
collections. Given the sales tax decrease of
(17.9)%, and the withholding tax decrease of
(19.2)%, the revenue loss effectively appears
closer to (19)%. In comparison, January 2009
revenues fell (21.3)% relative to the prior year.

The FAC met on March 31st and a new 4-sector
forecast was released. The forecast now
projects a (13.0)% decline in FY 2009. Given
that year-to-date revenues have already
declined (13.5)% and the approximately (20)%
loss in January and February, the 4-sector
forecast may be too optimistic. As a result, the
JLBC Staff has recommended that the budget
forecast be based on a (14.5)% decline in FY
2009 revenues. This would equate to General
Fund base revenues of $8.05 billion, excluding
fund transfers and Urban Revenue Sharing.

For the first 8 months of FY 2009, General Fund
collections are down (13.5)% when compared
to last year (excluding Urban Revenue Sharing
and one-time transfers). The combined
January and February shortfall is $(155.5) million
below the January revised budget forecast.
(See Table 1 and page 2 for more information
The February sales tax decline marked the 14th
consecutive month of year-over-year
reductions. The February results, which
represent January sales, reflect the fourth
consecutive month of double digit declines in
sales tax collections compared to the
previous year.

These estimates do not include the loss of
revenues associated with the change in
federal withholding rates. The new $400/$800

Table of Contents
February Revenues................................................. 3
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on March
31, 2009.

Economic Indicators .............................................. 4
Summary of Recent Agency Reports
• ADOA/Treasurer – General Fund Balance ..... 8
• AHCCCS – Preliminary Actuarial Estimates &

Capitation Rate Increases............................. 8

•
•
•
•

DES – Capitation Rate Increases...................... 8
DES – Food Distribution....................................... 8
DHS – Capitation Rate Increases ..................... 8
ADOT – MVD Wait Times .................................... 8

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

Summary

(continued)

tax cut included in the enacted federal
stimulus plan is implemented through a
reduction in federal withholding rates. Since
state withholding is a percentage of federal
withholding, these changes will result in a
reduction in state withholding. The estimated
impact is $(73) million in FY 2009, and $(37)
million in FY 2010.
After all adjustments including one-time
transfers, Urban Revenue Sharing, and the
withholding loss, total FY 2009 General Fund
revenues are projected to equal $8.55 billion.
FY 2009 Shortfall
With the recent March adjustments to the
January Special Session, the state had a
projected FY 2009 ending balance of $50
million. Reducing the revenue forecast to
(14.5)% will lower collections by $(487) million.
After adjusting for the $50 million ending
balance and the $(73) million withholding loss,
the net shortfall is now estimated at $(510)
million.
Given the recent declines and general
economic uncertainty, revenues could fall
even faster than projected. As a result, JLBC
Staff has recommended that the Legislature
should seek FY 2009 deficit reduction solutions
of $650 million to provide for a margin of error
and to ensure that the state has a positive
cash balance at the end of June. This $140
million reserve ($650 million of solutions less the
$510 million shortfall) could be used as a carryforward balance in the FY 2010 budget.
FY 2010 Shortfall
The January 4-sector consensus assumed FY
2010 base revenues of $8.29 billion, a (2.8)%
reduction from FY 2009, excluding fund
transfers and Urban Revenue Sharing. The new
March estimates have increased slightly, with
the new consensus being a (2.1)% revenue
decline in FY 2010. With the lower FY 2009
base, however, FY 2010 base revenues are
now forecasted to be $7.88 billion.
After all adjustments including one-time
transfers, Urban Revenue Sharing, and the
withholding loss, total FY 2010 General Fund
revenues are projected to equal $7.22 billion
The original FY 2010 JLBC January Baseline
shortfall was $(3.0) billion. If the net budget
reductions from the January and March

adjustments are presumed to be on-going, the
revised 4-sector estimates would result in a FY
2010 shortfall of $(2.93) billion.
Economic Indicators – The most recent release
of economic data indicates that the state’s
economy continues to deteriorate. February’s
employment report released by the Arizona
Department of Commerce shows that the
state has lost (173,000) jobs or (6.5%) of its
workforce in the last 12 months. This is the
largest percentage decline since April 1946.
The state’s unemployment rate rose to 7.4% in
the same month, a level not seen since
September 1992. A new report from the
federal Bureau of Economic Analysis (BEA)
reveals that Arizona’s personal income growth
of 2.7% in 2008 was the lowest annual growth
rate since 1949. When measured on a quarter
over quarter basis, personal income declined
in the last two quarters of 2008, the only backto-back decline since at least 1948. (BEA’s
quarterly state personal income series starts in
the first quarter of 1948.)
JLBC/JCCR Meetings –There were no JLBC or
JCCR meetings in March.

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

February Revenues
Table 1

General Fund Revenues
Compared to Forecast and FY 2008 Collections
($ in Millions)
FY 2009
Difference From
Difference From
Collections
June ’08 Forecast 1/
Jan ’09 Forecast 2/
$ 403.4
$ (163.5)
$ (73.3)
$ 5,194.2
$ (1,140.6)
$ (155.5)

Difference
From FY 2008
$ 28.2
$ (455.0)

February
Year-to-Date
____________
1/ Enacted FY 2009 budget (June 2008).
2/ Revised JLBC Baseline

“Sales Tax
collections
were…down
(17.9)%
compared to last
February, and
were down
$(34.4) million
below the budget
forecast”.

Sales Tax collections were $280.7 million in
February. These revenues were down (17.9)%
compared to last February, and were $(34.4)
million below the budget forecast. Table 2
displays the February growth rates for the
largest categories.
Table 2

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Utilities
Use
Restaurant & Bar

Feb
(11.7)%
(35.8)%
(10.0)%
(22.3)%
(6.9)%

YTD
(11.1)%
(21.6)%
2.7%
(7.6)%
(5.1)%

As noted in previous months, retail and contracting together account for two-thirds of all
sales tax revenues. The retail sector decreased
by (11.7)% and contracting fell by (35.8)%.
As noted in the table above, through February,
taxable sales in the retail category are down
(11.1)% from the prior fiscal year. The largest
subcategory within retail is the General
Merchandise and Miscellaneous Retail
Table 3

category, which is down (6.0)%. The largest
subcategory decline is in Motor Vehicles,
which represents 21.0% of the total, and is
down (32.4)% compared to the prior year.
Individual Income Tax net revenues were
$(41.9) million in February as a result of refunds
exceeding total payments. February net
collections were $(66.5) million less than the
budget forecast. Table 4 displays February
and year-to-date growth rates for individual
categories.
Table 4

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

February
(19.2)%
2.7%

YTD
(5.9)%
(24.9)%

9.2

14.4%

February’s (19.2)% reduction in withholding
collections was the sharpest decline in 25
years. Year-to-date, withholding is down by
(5.9)%. The state has only experienced a
steeper decline in withholding growth for the
same period (first 8 months of the fiscal year)

YTD (8-Month) 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

% of
Total Sales
30.4%
21.0%
7.5%
7.4%
6.9%
5.8%
5.6%
15.4%
100.0%

% Change
Over FY 2008
(6.0)%
(32.4)%
(14.8)%
(2.9)%
(14.4)%
(12.3)%
(10.2)%
4.6%
(11.1)%

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JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

February Revenues

(Continued)

twice in the last 47 years (February 1964 and
1983).
Estimated and final payments increased yearover-year by 2.7% in February, the first such
increase since July 2008. However, since
February collections typically represent no
more than 1.5% of year-total payments, the
small positive growth rate had only a marginal
impact on overall net revenues.

“Sales of
semiconductors
in the U.S. are
now at their

Refunds were $297.9 million in February, an
increase of 9.2% over the same month in the
prior year. Year to date, refunds were up by
14.4% or $44.6 million higher than forecasted.
(Hans Olofsson)

for the month. While February collections were
significantly above forecast, February is a small
collection month for corporate income tax.
Year-to-date, collections are (20.3)% below last
year. Final results for the fiscal year will be
largely determined by April and June
collections.
The Lottery Commission reports that ticket
sales for the month of February were $46.5
million, which was $2.5 million higher than sales
in February 2008. Year-to-date, ticket sales are
up 2.1% compared to last year. Through
February, a total of $26.9 million in lottery
revenues has been deposited into the General
Fund.

Corporate Income Tax collections were $34.3
million in February, or 60.5% above last year.
Collections were $29.3 million above forecast

lowest level since
June 2003.”

Economic Indicators
NATIONAL
The Conference Board’s U.S. Consumer
Confidence Index increased from a revised
reading of 25.3 in February to 26.0 in March.
While this was a marginal improvement from
the prior month, consumer confidence in
March remained at the second lowest level
since the index was started in 1967.
According to the Conference Board, the
pessimistic outlook for the economy in
general and the labor market in particular
“continues to weigh heavily on consumers’
attitudes.”
The Semiconductor Industry Association (SIA)
reported that Semiconductor Billings (3-month
moving average) in the U.S. fell by (5.3)%
between December and January, from $2.70
billion to $2.55 billion. Sales of semiconductors
in the U.S. are now at their lowest level since
June 2003. SIA attributes the large decline in
recent months to “a continuing erosion of
consumer confidence and the effects of the
global economic recession.”
The Conference Board’s U.S. Index of Leading
Economic Indicators decreased by (0.4)% in
February. Year-over-year, the index is down by
(3.7)%. While 6 of the 10 components that the

index is comprised of advanced during the
month, only one of them – the interest rate
spread – made a large positive contribution
to the indicator. This increase, however, was
inflated by the Fed’s ongoing efforts to
increase liquidity in financial markets. The
largest negative contributions to the index
came from surging jobless claims, falling stock
prices, and souring consumer expectations.
The U.S. Consumer Price Index increased by
0.4% in February, the second consecutive
increase after several months of price declines.
The CPI increase in February was primarily due
to a 3.3% increase in energy prices (8.3% price
increase for gasoline alone). Compared to the
same month last year, the CPI is up by 0.1 %.
ARIZONA
The most recent release of economic data
suggests that the state’s already deteriorating
economy continues to contract. What first
started as a slowdown in the housing industry
has now developed into a deep and
protracted recession affecting all sectors of
the Arizona economy. The broad based
impact on the economy is evident from a
host of economic measures such as
employment, personal income, consumer

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

Economic Indicators
confidence, caseload and real estate data.

“Since the height
of the
construction
boom in June of
2006, the industry
has shed
(101,100) jobs or
(41%) of its
workforce.”

According to the Commerce Department’s
most recent Workforce Report, nonfarm
payroll employment in February declined by
(6.5)% when compared to the same month in
the prior year. This was the largest reduction
(in percentage terms) of the Arizona
workforce since April 1946. This figure
translates into a net loss of (173,000) jobs over
the last 12 months. Job losses in the 4 previous
recessions pale in comparison. For example,
during the recession in the mid-1970s, job loss
never exceeded (34,600) or (4.6)%.
Comparable figures during subsequent
recessions were: 1981/82, (24,700 or -2.4%);
1990/1991 (3,100 or -0.2%); and 2001 (30,000 or
-1.3%).
The month of February marked the 18th
consecutive month with job losses in the
construction sector. Year-over-year,
construction employment decreased by
(26.4%) in February. This means that the
construction industry has shed (52,400) jobs
over the last 12 months. With a total
workforce of 146,400 individuals, the
construction sector is now employing about
the same number of workers as in April 1998.
Since the height of the construction boom in
June of 2006, the industry has shed (101,100)
jobs or (41%) of its workforce.
With the exception for the aerospace
industry, the manufacturing sector is also
experiencing significant job losses. In the
month of February, the industry lost (1,200)
jobs and employed (10,900) fewer workers
than a year ago. The manufacturing sector
has incurred job losses in 28 of the last 36
months. The current workforce of 166,500
employees is the smallest since February 1993.
The state’s unemployment rate increased
from 7.0% in January to 7.4% in February, a
level not seen since September 1992. The
state had reportedly 232,400 unemployed
individuals in February, an 80% increase from
a year ago. This is the largest number of
unemployed individuals on record. (The
Arizona unemployment series provided by the
federal Bureau of Labor Statistics (BLS) starts in
January 1976.)
The Department of Commerce reported that
34,958 initial claims for unemployment
insurance were filed in February, an increase

(Continued)

of 104.8% over last year. A complimentary
measure of unemployment data is the
number of continued claims for jobless
benefits. According to BLS, for the week
ending on March 14, about 93,700 individuals
who had previously filed for UI benefits
continued to do so that week. The
comparable figure during the same week last
year was 35,400, which is an increase of 166%.
The number of continued claims in the week
ending on March 14 is the highest on record.
(The starting date for the BLS series is
1/3/1987.)
The federal Bureau of Economic Analysis
(BEA) has recently released state personal
income statistics for the 4th quarter of 2008.
According to BEA, Arizona personal income
grew by 2.7% in calendar year 2008, the
slowest rate of growth since 1949. Only 3
states in the nation grew more slowly (in terms
of personal income) than Arizona in 2008.
Arizona’s per capita personal income growth
of 0.4% was the lowest in the nation. From the
3rd to the 4th quarter of 2008, Arizona personal
income fell by (0.7)%, the largest quarter-overquarter decline in 50 years.
According to the U.S. Census Bureau, an
average of 623 single-family residential
building permits were issued between
November 2008 and January 2009. In
percentage terms, single-family permitting
activity fell by (57.7)% from the same 3 month
period a year ago. In August 2004, the
number of single-family building permits hit a
high of 7,648. Multi-family permits, on
average, also fell over the last three months
to a total of 216, or (79.9)% below levels a
year ago.
Declining prices, a large inventory of homes,
and a significant increase in loan modification
programs appear to be attracting potential
buyers to the market. For example, including
existing single-family homes and
townhouse/condominium sales, ASU’s most
recent real estate report indicates a total of
9,450 transactions occurred in February, an
increase of 76% over the prior year. Of this
amount, however, 50.6% (or 4,780) were
foreclosures, and 49.4% (or 4,670) transactions
were traditional sales. In February 2008,
foreclosed sales were 39.7%.of total sales
while traditional sales accounted for 60.3% of
all sales. Based on the report, however,

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

Economic Indicators
continuing concerns remained given “…an
extremely weak economy is leading to
mounting job losses that could severely
impact the ability of a troubled household to
have the needed income to qualify for one of
the [mortgage modification] programs or
even have the needed income to maintain
ownership.”
In February, the Greater Phoenix single-family
median resale home price was $133,000 for
traditional homes and $164,470 for foreclosed
properties. These figures represent a yearover-year price decline of (2.2)% and 21.8%,
respectively. It appears that the relatively
high resale price for foreclosed transactions in
February is at least attributed to two factors;
1) a large increase in more expense homes
being foreclosed on and sold, and 2)
previously foreclosed homes that were
purchased being resold at an average loss of
15%-- weighing down the average price of
traditional sales.
The S&P/Case-Shiller Home Price Index
measures the change in housing prices based
on repeat sales. In January, home prices in
Phoenix fell (5.5)% from December 2008 levels.
Compared to last year, housing prices are
down by (35.0)%-- the greatest drop among
all 20 metropolitan areas tracked.
For the third straight month, MLS data
suggests the month’s supply of housing
remained at 8.8 months. There are positive
signs behind the recent stability in the
indicator. Specifically, the number of single
family home listings fell to a 23 month low,
and the seasonally adjusted number of
homes sold was at its second highest level in
33 months. These facts, however, may be
undermined given this measure may be
currently understated due to the large
number of foreclosed homes not included in
the MLS database.
In February, AHCCCS caseloads increased to a
total of 1,175,599 members, a 0.9% increase
over the prior month. At current levels, the
AHCCCS caseloads are 7.8% above February
2008 levels. The revised FY 2009 budget
funded a projected caseload growth of 7.8%,
or a total of 1,234,901 members.
There were a reported 86,761 TANF recipients
in the state in January, a decrease of (0.2)%

(Continued)

from the prior month. Year-over-year,
caseload is up by 8.4%. The FY 2009 budget
assumes the TANF caseload will grow by
2.5%.
The Supplemental Nutrition Assistance
Program (SNAP), formerly known as Food
Stamps, provides assistance to low-income
households to purchase food. In January,
there were a total 773,530 food stamp
recipients in the state, an increase of 0.6%
over the prior month. Compared to the
same month last year, food stamp
participation was up by 25.6%.
Between December 2008 and February 2009,
the Department of Correction’s (ADC) inmate
population increased by an average of 118
inmates per month. ADC now has an average
population of 39,690 inmates, or 1,774 more
inmates than in the same period last year.
(Hans Olofsson, Martin Lorenzo)

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

Economic Indicators

(Continued)

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, (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
- SNAP (Food Stamps) 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

February
February
February
February
February
Dec-Feb
Dec-Feb

7.4%
34,958
2.49 million
166,500
146,400
$51.6 million
$147.6 million

0.4%
(10.5)%
0.1%
(0.7)%
(3.6)%
(11.4)%
(1.5)%

2.9%
104.8%
(6.5)%
(6.1)%
(26.4)%
(27.6)%
(13.2)%

Nov-Jan
Nov-Jan

623
216

(13.7)%
(26.3)%

(57.7)%
(79.9)%

February
February
February
February

4,215
4,295
455
485

17.4%
27.4%
35.8%
73.2%

56.7%
116.4%
(17.3)%
223.3%

February
February
February
February
January
February
January
December

$133,000
$164,470
$121,000
$128,395
117.11
8.8 months
3.0 million
$8.27

(2.2)%
21.8%
(3.2)%
22.6%
(5.5)%
(0.0) months
(5.9)%
4.0%

(42.2)%
(15.0)%
(28.8)%
(14.3)%
(35.0)%
(5.4) months
(9.7)%
5.2%

1st Quarter 2009
1st Quarter 2009
4th Quarter 2008
July 1, 2008
February
January
January
Dec-Feb

44.2
32.1
$213.4 billion
6.50 million
1,175,599
86,761
773,530
39,853

N/A
(24.3)%
(0.7)%
146,759
0.9%
(0.2)%
0.6%
118 inmates

(58.4)%
(20.5)%
1.0%
2.3%
7.8%
8.4%
25.6%
1,774 inmates

4th Quarter 2008

$11.5 trillion

(6.3)%

(0.8)%

March
February
Nov-Jan
February

26.0
98.5
$2.55 billion
213.007

2.8%
(0.4)%
(5.3)%
0.4%

(60.5)%
(3.7)%
(25.9)%
0.1%

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

Summary of Recent Agency Reports
ADOA/Treasurer – Report on
Reconciliation of General Fund
Balance for FY 2008 – Pursuant to
A.R.S. § 41-172A and A.R.S. § 35-131F
the Office of the State Treasurer and
the Arizona Department of
Administration (ADOA) are required
to submit reports reconciling any
difference between agencies in the
year-end General Fund balance.
ADOA and the Treasurer currently
report FY 2008 year-end General
Fund balances of $90.7 million and
$100.6 million, respectively. The
difference leaves an unreconciled
General Fund balance of $9.9
million. The Treasurer reports that
they will continue to try to isolate the
source of the $9.9 million difference.
(Eric Billings)
AHCCCS – Report on Preliminary
Actuarial Estimates of the Capitation
Rate Increases for the Following
Fiscal Year – Pursuant to a FY 2009
General Appropriation Act footnote,
AHCCCS has submitted preliminary
actuarial estimates of the capitation
rate increases for FY 2010.
AHCCCS has indicated that, in
recognition of the state’s fiscal
challenges, they are working toward
a goal of 0% growth in capitation
rates while maintaining actuarial
soundness. The preliminary review of
the capitation rates for contract
year 2010 allows for funding medical
utilization increases, holding provider
costs flat with up to 5% reductions in
some service categories, and
reducing contractors’ administrative
and contingency components. The
FY 2010 JLBC Baseline assumed
capitation rate growth of 0% for both
the Acute Care program and ALTCS
program. (Amy Upston)
DES – Report on Preliminary Actuarial
Estimates of the Long Term Care
Developmental Disabilities
Capitation Rate Increases for the
Following Fiscal Year – Pursuant to a
FY 2009 General Appropriation Act
footnote, the Department of
Economic Security (DES) has
submitted preliminary actuarial
estimates of the FY 2010 capitation

rate increases for its Title XIX Long
Term Care Developmental
Disabilities program.
The FY 2010 JLBC Baseline assumed
capitation rate growth of 0% for the
Developmental Disabilities Long Term
Care program. DES has indicated
that they expect an overall flat
growth for capitation rate for
contract year 2010. The rate would
allow for funding medical utilization
increases, continuing all or part of
the 10% provider rate reductions that
DES announced as part of its
implementation of the FY 2009
budget revisions, and reducing
contractors’ administrative and
contingency components.
Currently, the Maricopa County
Superior Court has issued a
preliminary injunction prohibiting DES
from reducing provider rates. DES’
request to stay the preliminary
injunction is pending in the Court of
Appeals. (Jay Chilton)
DES – Report on State-Funded Food
Distribution – Pursuant to a FY 2009
General Appropriation Act footnote,
the Department of Economic
Security (DES) is reporting on food
distribution efforts funded through
the Coordinated Hunger Special Line
Item. For the last 6 months of
calendar year 2008, there were 4
regional food banks that distributed
43.5 million pounds of food, a 15.6%
increase when compared to the
same time period during the
previous year. DES has attributed
the growth to an increase in the
availability of USDA commodities as
well as a 42% increase in the
demand for emergency food
reported by the regional food banks.
Additionally, the footnote required
DES to include letters from each
participating regional food bank
stating its satisfaction with the
distribution process. This year the
participating regional food banks
submitted letters indicating they
were satisfied with the distribution
process. (Jay Chilton)

Department of Health Services –
Report on Preliminary Actuarial
Estimates of the Capitation Rate
Increases for the Following Fiscal
Year – Pursuant to a FY 2009 General
Appropriation Act footnote, the
Department of Health Services (DHS)
has submitted preliminary actuarial
estimates of the capitation rate
increases for FY 2010.
DHS has indicated that, in
recognition of the state’s fiscal
challenges, they are working toward
a goal of 0% growth in capitation
rates while maintaining actuarial
soundness. The preliminary review of
the capitation rates for contract
year 2010 allows for funding medical
utilization increases, holding provider
costs flat with up to 5% reductions in
some service categories, and
reducing contractors’ administrative
and contingency components. The
FY 2010 JLBC Baseline assumed
capitation rate growth of 0% for both
the Behavioral Health program and
the Children’s Rehabilitative Services
program. (Art Smith)
Arizona Department of Transportation
– Quarterly Report on Motor Vehicle
Division Wait Times – A FY 2009
General Appropriation Act footnote
requires the Arizona Department of
Transportation (ADOT) to report to
the Legislature quarterly on customer
wait times in Motor Vehicle Division
(MVD) field offices and vehicle
registration renewal by mail
turnaround times. Customer wait
time from receiving a ticket until
arriving at the counter decreased
from 13.0 minutes in the first quarter
of FY 2009 to 11.6 minutes in the
second quarter. Customer wait
times in metropolitan areas ranged
from 5.3 minutes in the Surprise office
to 23.2 minutes in the Chandler
office. (Juan Beltran)

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2009

State of Arizona
General Fund Revenue:

Change from Previous Year and January Baseline Forecast
February 2009
Current Month

FY 2009 YTD (Eight Months)

Change From
February 2008

Actual
February 2009

Percent

Amount

Change from
Forecast
Percent

Amount

February 2008

Actual
February 2009

Forecast

Percent

Amount

Percent

Amount

Taxes
Sales and Use

280,674,594

($61,386,695)

Income - Individual

(41,919,800)

(80,963,696)

34,330,849

12,939,143

- Corporate
Property
Luxury - Tobacco
- Liquor
Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

291,181

(361,376)

(17.9) %
-60.5
(55.4)

($34,377,506)
(66,527,375)
29,275,049
(271,819)

(10.9) %

$2,639,751,748

($337,572,221)

(11.3) %

($45,675,072)

(1.7) %

1,944,723,951

(344,704,925)

(15.1)

(124,208,844)

(6.0)

579.0

335,529,759

(85,430,023)

(20.3)

12,377,234

3.8

(48.3)

10,980,318

(856,713)

(7.2)

396,932

3.8

--

1,820,092

(1,154,594)

(38.8)

(688,100)

(27.4)

20,175,549

(1,858,732)

(8.4)

(330,466)

(1.6)

2,083,067

(297,548)

(12.5)

(378,333)

(15.4)

19,146,131

(213,900)

(1.1)

(596,679)

(3.0)

166,483

(6,542,031)

(97.5)

166,483

--

163,891,811

3.0

476,146

0.3

--

0

--

125,333

(53.3)

21,020

20.2

0

0

30,728

(15,735)

$277,477,194

($137,782,532)

(33.9)
(33.2) %

(16,272)
($72,817,873)

(34.6)
(20.8) %

4,751,134
(142,789)

386,703

(10,483)

$5,134,711,303

($766,038,652)

(2.6)
(13.0) %

25,594
($157,514,135)

7.1
(3.0) %

Other Revenue
Lottery

1,724,000

(931,800)

(35.1)

0.0

26,934,000

4,934,581

22.4

License, Fees and Permits

1,929,086

(1,362,877)

(41.4)

(966,514)

(33.4)

21,595,532

(2,505,976)

(10.4)

(1,198,369)

(5.3)

(1,316,077)

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

0

0

0.0

250,323

(5,337,001)

(95.5)

(84.0)

9,796,042

(60,100,058)

(86.0)

(2,910,143)

(22.9)

3,175,490

(134,445)

(4.1)

762,690

31.6

30,560,148

(3,229,201)

(9.6)

1,620,174

5.6

306,634

(1,839,741)

(85.7)

(932,066)

(75.2)

25,272,669

5,552,600

28.2

243,307

1.0

--

0

0

0

0

--

0

2,964,922

2,979,413

--

1,964,922

10,350,455

(6,626,451)

(39.0) %

(487,045)

$287,827,649

($144,408,983)

(33.4) %

($73,304,918)

196.5

--

0

(10.0)

4,269,398
2,024,367

28,311,863

(3,143,140)

(4.5) %

142,470,254

(58,491,194)

(29.1) %

(20.3) %

$5,277,181,557

($824,529,846)

(13.5) %

($155,489,768)

-17.8
1.4 %
(2.9) %

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

(60,639,783)

0

0.0

(485,118,266)

(28,758,981)

0

0.0

851,399

(3,594,872)
851,399

6.3
--

0

0.0

226,773,191

222,897,012

--

0

0.0

175,380,276

175,380,276

--

0

0.0

175,380,276

175,380,276

--

0

0.0

115,591,892

172,636,803

-- %

$403,419,541

$28,227,820

7.5 %

0
($73,304,918)

0.0 %
(15.4) %

(82,964,799)
$5,194,216,758

369,518,307
($455,011,539)

6.3

-- %
(8.1) %

0
($155,489,768)

0.0 %
(2.9) %