JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

“April collections
were… $(505.9)
million below the
January revised
budget
forecast”.

May 2009

Summary
April General Fund revenue collections were
$621.3 million. This amount included $59.2
million in budgeted fund transfers from the
January Special Session. Excluding these
transfers and Urban Revenue Sharing, April
collections were (47.9)% below the prior year,
and $(505.9) million below the January revised
budget forecast.

State Rankings
Arizona’s tax performance is among the worst
in the country. In the last week, the National
Conference of State Legislatures (NCSL)
conducted a state survey of tax collections
through April compared to the same period in
the prior year.

For the first 10 months of FY 2009, General Fund
collections are down (18.6)% when compared
to last year (excluding Urban Revenue Sharing
and one-time transfers). The year-to-date
shortfall is $(663.9) million below the January
revised budget forecast. (See Table 2 and
page 3 for more information).

Arizona’s rankings were as follows:

•
•
•

Sales taxes and individual income tax
withholding are the 2 main sources of revenue
collections. Sales tax revenues were (19.8)%
below April of last year, and withholding tax
collections were down (11.9)%.

Sales Tax – Arizona’s year to date decline
of (12.9)% was the 3rd worst showing out of
38 states reporting.
Individual Income Tax – The state’s decline
of (26.0)% was the highest in the nation.
Corporate Income Tax – the drop of
(26.5)% ranked 10th.

FY 2009 Shortfall
At the March Finance Advisory Committee
meeting, JLBC Staff recommended that the
FY 2009 budget forecast be based on a
(14.5)% decline in FY 2009 revenues. At the
time, the year to date revenue decline was
(13.5)%.

While sales tax and withholding collections are
both down significantly relative to the January
forecast, the largest components of the April
revenue shortfall are sharply reduced
individual income tax payments, and
increased refunds. Payments for April were
down almost (44)% compared to the prior
year, and were $(300) million below forecast
for the month. Refunds were up almost 34%,
and were $97 million greater than forecast.
Overall, individual income tax collections
represent $(422) million of the $(506) million
April revenue shortfall. April’s income tax
collection level of $173.2 million is the smallest
amount since FY 1996.

The March forecast equated to a revenue
shortfall of $(487) million compared to the
January special session estimate. In the April
MFH, the JLBC Staff reported that the
preliminary April year-to-date loss could be
$(550) million. The April loss was worse than
expected. The year-to-date forecast loss now
stands at $(664) million. In addition, the yearto-date revenue decline has grown from
(13.5)% to (18.6)%.
In the April MFH, we further noted that "the

Table of Contents
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on May
29, 2009.

April Revenues ........................................................ 3
Economic Indicators.............................................. 5
Summary of Recent Agency Reports
• AHCCCS – Healthcare Group........................... 9

•
•
•
•
•
•

AHCCCS – Alien Verification............................... 9
Comm. Colleges – Annual Report ................... 9
Comm. Colleges – Workforce Development . 9
Corrections – Bed Plan......................................... 9
ADE – Budget Status Report ................................ 9
DPS – Quarterly Report on GIITEM...................... 9

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

Summary

(continued)

projected year-end forecast loss of $(487)
million will need to be revised substantially
upward, potentially in the range of $200-$300
million”. Since that time, an additional $650
million of budget shortfall solutions have been
enacted in Chapter 5 and 6, including:
•

•

•

A $250 million reduction in Arizona
Department of Education K-12 spending,
backfilled with Federal Stabilization Funds
from the stimulus legislation;
A $300 million reduction in the May K-12
payment to school districts, to be replaced
by unbudgeted district cash balances or a
higher rollover payment, if those balances
are not available;
A $100 million shift in University General
Fund payments to FY 2010.

Along with a $50 million budget carry-forward
balance, these $650 million in FY 2009 deficit
reduction proposals would allow the state to
cover a $700 million revenue shortfall.

“Despite these
additional

Despite these additional solutions, the state
may still have a $(200) million shortfall by the
end of FY 2009. This shortfall is a combination
of both revenue and spending factors:
•

solutions, the
state may still
have a $(200)
million shortfall
by the end of FY
2009”.

•

•

The revenue shortfall may now exceed the
upper end of the range that JLBC
predicted in the last MFH. Based on
preliminary May data, we may lose
another $50 million on top of the April loss.
If this projection is correct, the May year to
date shortfall will be near $(710) million.
Revenues are now forecast to fall (18.7)%
for the entire year, which would result in a
$(850) million revenue loss compared to
the January special session estimates.
The January special session included $591
million in fund transfers, but approximately
$19 million of that amount may not be
collected due to pending litigation or
unavailable balances.
The budget annually includes an estimate
of unspent appropriations, otherwise
known as "revertments." With the level of
reduced appropriations in FY 2009,
agencies will likely spend a greater
proportion of their appropriation, thereby
reducing the savings from year-end
revertments by $35 million. It is difficult to
predict this revertment loss with certainty.
The final revertment estimate will depend,
in part, on how much agencies engage

in “active cash management” to move
FY 2009 expenses to FY 2010.
The revenue and expenditure shortfalls add to
$(900) million, and would be offset by the $650
million in enacted May solutions, plus the $50
million budgeted carry-forward for a possible
total net shortfall of approximately $(200)
million (see Table 1 below).
Even if the state were to pursue one or a
combination of strategies to generate $200
million to balance the budget, there is no
guarantee that would solve the problem.
While the current shortfall estimate is $(200)
million, the problem could be as low as $(150)
million or as high as $(250) million. The actual
FY 2009 budget balance will ultimately depend
on the level of June revenues and
expenditures.
Even at the end of June, there will not be a
final estimate of the ending balance. The state
allows FY 2009 claims to be paid through July
and still count as an FY 2009 expenditure. The
FY 2009 ending balance will not be finalized
until December when the Department of
Administration publishes the state's Annual
Financial Report.
Table 1

FY 2009 Estimated Shortfall
($ in Millions)

Revenue shortfall
AHCCCS caseloads
Fund transfer reduction
Net revertment loss
Gross Shortfall

$(850)
-(19)
(35)
(904)

Chapter 5/6 adjustments

650

Budgeted carry-forward

50

Net shortfall

$(204)

We also anticipate that AHCCCS caseloads
will exceed budget. AHCCCS, however, has
not requested a supplemental and they are
expected to take internal steps to remain
within their appropriation. AHCCCS caseloads
have grown by 4.1% in just the last 2 months.
The June caseload is expected to be 36,700
members above the budgeted projection,
which would result in a $46 million shortfall.

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

Summary

“While the
economy no
longer appears
to be in a “free
fall,” there are
still considerable

(continued)

The AHCCCS deficit may be reduced in half if
the state receives the highest level of federal
matching rate for the final quarter of the fiscal
year. The federal stimulus legislation increased
the federal matching rate for Medicaid
programs and conditioned the level of the
match on the state's unemployment rate. The
state's current rate will qualify the state for the
highest level of federal match by at least the
beginning of FY 2010, but AHCCCS is seeking to
receive that higher rate now.
In addition, AHCCCS may shift some of its FY
2009 payments to FY 2010 to eliminate the
remainder of its shortfall.
Potential Solutions

downside risks in

The state has the following options for
addressing the overall budget shortfall:

the near term…”.

•

•

•

Shift additional FY 2009 spending into FY
2010. There are very limited opportunities
in this regard as the final K-12 and
University payments have already been
made. Most AHCCCS June payments are
scheduled to be distributed by June 5.
Increase the use of Federal Stabilization
funds above the $250 million in Chapter 5.
This option would allow K-12 spending to
be reduced and replaced with federal
funds. The Governor, however, has
submitted an application to the federal
government to only use $250 million in FY
2009. A state, however, does not appear
to be prohibited from modifying its
application.
Permit the state General Fund to run a

shortfall in FY 2009 and address that
deficit as part of the FY 2010 budget.
While the state is generally thought to
have a balanced budget requirement,
the Arizona Constitution does permit the
state to address any year-end shortfall in
the next fiscal year. Running a cash
shortfall could have a negative effect on
the state's credit rating, but that impact
could be lessened if the state demonstrated how it were to resolve the shortfall
during FY 2010.
Economic Indicators – Newly released
employment data by the Arizona Department
of Commerce suggests that the rate of
decline in the Arizona economy may be
starting to slow. Other encouraging signs are
the reduced number of foreclosed homes
sold relative to total existing home sales and
the continued decrease in the month’s supply
of housing.
The economy still remains weak, however, as
evidenced by current unemployment levels,
initial and continued claims for jobless
benefits, and decline in the length of the
average work week of factory workers. While
the economy no longer appears to be in a
“free fall,” there are still considerable downside risks in the near term, especially in
regards to the housing and financial sectors.
JLBC/JCCR Meetings –There were no JLBC or
JCCR meetings in May.

April Revenues
Table 2

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/
$ 621.3
$ (632.9)
$ (505.9)
$ 6,380.7
$ (1,932.5)
$ (663.9)

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

Difference
From FY 2008
$ (516.2)
$ (945.7)

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

April Revenues

(continued)

Sales Tax collections were $299.9 million in
April. These revenues were down (19.8)%
compared to last April, and were $(48.4) million
below the budget forecast. Sales tax
collections are down (12.9)% through the first
10 months of the fiscal year. The April decline
marked the 16th consecutive month of yearover-year reductions, and the 6th consecutive
month of double digit declines compared to
the previous year.
Table 3 displays the April growth rates for the
largest categories.
“Sales tax

Table 3

collections are

Sales Tax Growth Rates
Compared to Prior Year

down (12.9)%
throughout the
first 10 months of
the fiscal year”

Retail
Contracting
Utilities
Use
Restaurant & Bar

Apr
(17.7)%
(33.2)%
8.3%
(33.5)%
(8.2)%

YTD
(12.2)%
(23.5)%
1.1%
(11.6)%
(5.5)%

As noted in previous months, retail and contracting together account for two-thirds of all
sales tax revenues. The retail sector decreased
by (17.7)% in April, and contracting fell by
(33.2)%.
As noted in Table 4, through April, taxable sales
in the retail category are down (12.2)% from
the prior fiscal year. The largest subcategory
within retail is the General Merchandise and
Miscellaneous Retail category, which is down
(7.2)%. The largest subcategory decline is in
Motor Vehicles, which represents 20.8% of the
total, and is down (32.8)% compared to the
prior year.
Individual Income Tax net revenues were
$173.2 million in April. Collections were down
(71.4)% compared to the prior year, and were
$(422.5) million below the budget forecast.
Table 5 displays April and year-to-date growth
rates for individual categories.
Table 5

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

April
(11.9)%
(43.6)%

YTD
(6.5)%
(34.4)%

33.7%

13.2%

Year to date, the state has collected $2.19
billion in individual income tax collections, the
lowest level for the same period since FY 2004.
April’s net collections of $173.2 million are the
smallest amount since FY 1996. In terms of the
individual components of the tax, withholding
fell by (11.9)% and payments by (43.6)%
whereas refunds increased by 33.7%.
The large forecast variance in April was mostly
due to much lower-than-expected final
payments, which fell to the lowest level in 5
years.
The withholding tax decline in April may have
been influenced by the recent change in
rates. State withholding rates are tied to
federal withholding rates, which were reduced
early in the year as part of the federal stimulus
package. Laws 2009, Chapter 2 increased
state withholding rates to compensate for the
reduction in federal rates, effective no later
than May 1st. Businesses may have begun to
adjust the rates in April.
Corporate Income Tax collections were $66.3
million in April, or (47.0)% below last year.
Collections were $(29.2) million below forecast
for the month. Year-to-date, collections are
(26.5)% below last year. April is one of the 4
large collection months for corporate income
tax.
The Lottery Commission reports that ticket
sales for the month of April were $45.1 million,
which was $2.6 million above sales in April 2008.
Year-to-date, ticket sales have increased by
0.4% compared to last year. Through April,
ticket sales have generated $31.0 million in
revenue to the General Fund. LTAF II, LTAF,
CAF, and the Heritage Fund have all reached
their statutory caps.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

April Revenues
Table 4

(Continued)

YTD (10-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
30.6%
20.8%
7.4%
7.4%
6.9%
5.8%
5.6%
15.5%
100.0%

% Change
Over FY 2008
(7.2)%
(32.8)%
(14.9)%
(5.5)%
(16.2)%
(13.7)%
(12.5)%
3.1%
(12.2)%

Economic Indicators
NATIONAL
“Newly
released
employment
data by the
Arizona
Department of
Commerce
suggests that
the rate of
decline in the
Arizona
economy may
be starting to
slow.”

According to the federal Bureau of Economic
Analysis, the real Gross Domestic Product
(GDP) declined a revised (5.7)% in the 1st
quarter of 2009. This was less than the
previous estimate of (6.1)% reported last
month. The main reason for the downward
revision was that inventories were cut less
steeply than first estimated.
The Conference Board’s U.S. Consumer
Confidence Index, a measure based on a
survey of 5,000 U.S. households, increased
from a reading of 40.8 in April to 54.9 in May -reaching its highest level since September
2008. Consumers’ assessment of both current
and future conditions improved, with a more
optimistic short-term outlook and
expectations that business conditions, the
labor market, and incomes will improve in the
coming months.
The Conference Board’s U.S. Index of Leading
Economic Indicators rose by 1.0% in April, the
first increase in seven months. Additionally, the
April reading marked the largest increase since
November 2005. Seven of the 10 components
that make up the composite index advanced
in April. The largest positive contributions came
from rising stock prices, increased interest rate
spread and improved consumer confidence.
To signal a turnaround in the economy, the
index would have to extend the April gains
over the coming months.

Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), were unchanged
in April. The CPI would have declined in April
was it not for the surge in tobacco prices due
to the recent increase of the federal tobacco
excise tax. The core CPI, which excludes food
and energy prices, increased by 0.3% over the
prior month.
ARIZONA
Newly released employment data by the
Arizona Department of Commerce suggests
that the rate of decline in the Arizona
economy may be starting to slow. Other
encouraging signs are the reduced number
of foreclosed homes sold relative to total
existing home sales and the continued
decrease in the month’s supply of housing.
The economy still remains weak, however, as
evidenced by either record-high or near
record-high unemployment levels, initial and
continued claims for jobless benefits, and
decline in the length of the average work
week of factory workers.
While the economy no longer appears to be
in a “free fall,” there are still considerable
downside risks in the near term especially in
regards to the housing and financial sectors.
According to the Commerce Department’s
monthly Workforce Report, nonfarm payroll
employment in April declined by (6.6)% when
compared to the same month in the prior

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

Economic Indicators
year. This figure translates into a net loss of
(175,700) jobs over the last 12 months. This
was a slight improvement over prior month’s
year-over-year job loss of (185,100). April also
marked the first time since August 2007 when
year-over-year growth in employment
improved relative to the prior month.
Month over month, the state lost (1,600) nonfarm jobs in April. The federal government’s
continued hiring of individuals in preparation
for the 2010 Census helped to mitigate the job
loss somewhat. A 1,200 job gain in the public
sector was offset by a (2,800) job loss in the
private sector.
While job losses continued in April, there were
still some encouraging signs in the employment report. For example, employment
services (primarily temporary employment)
increased by 5.6% month over month, the
largest such increase since April 1994.
Additionally, the leisure and hospitality
industry has seen a modest increase in
employment over the last 3 months. Both of
these sectors of the economy tend to lead
the business cycle.
The construction sector lost another (2,700)
jobs in April, which brought its workforce to
140,700 employees, the lowest number since
June 1997. Since construction employment
peaked in June 2006, the industry has shed
close to (107,000) jobs, or (43.1)% of its
workforce.
For the first time since July 2007, the
manufacturing sector added jobs month over
month in April. Although the industry
expanded its payrolls with 300 jobs in April, it
still employs (8,400) fewer workers than a year
ago. The ongoing recession has reduced
manufacturing employment in the state to a
level not seen since the early 1990’s.
The average weekly hours of production
workers in manufacturing industries is another
measure of labor market conditions. Economists consider this measure a leading
indicator since “factory hours” tends to lead
the business cycle as employers usually adjust
work hours before increasing or decreasing
the size of their workforce. According to the
Department of Commerce, average weekly
hours fell from 39.1 in March to 38.1 in April,
which was the lowest reading on record

(Continued)

(data is available from January 2001).
The state’s unemployment rate unexpectedly
fell from 7.8% in March to 7.7% in April, the first
month-over-month decline since May 2007.
By contrast, the U.S. unemployment rate
increased from 8.5% to 8.9%. The reason for
the unexpected drop in the state’s unemployment rate is not currently known. One
possible explanation is that the ranks of
workers that are “marginally attached to the
labor force” are disproportionately higher in
Arizona than in the nation as a whole. The
federal Bureau of Labor Statistics (BLS) defines
such individuals as those who have searched
for work during the prior 12 months (but not
the prior 4 weeks) and were available to take
a job during the reference week of the
household survey. Many of these individuals
leave the labor force (and are therefore no
longer counted as unemployed) due to
discouragement over current job prospects.
This phenomenon, which tends to become
more pronounced during recessions, results in
an understatement of the “real”
unemployment rate.
The Department of Commerce reported that
a record-high 41,068 initial claims for
unemployment insurance were filed in April,
an increase of 55.9% over last year. For the
week ending on May 9, a new record-high of
108,420 Arizona residents filed continued
claims for jobless benefits. This means that at
least twice as many individuals are currently
receiving unemployment checks from the
state as any week during the recessions in
1990/1991 and 2001.
Between February and April 2009, an average
of 788 single-family residential building
permits were authorized based on data
released by the U.S. Census Bureau. In
percentage terms, single-family permitting
activity surged by 26.1% over the prior months
rolling average. Multi-family permits,
however, fell (28.0)%, to a new low of 147
permits being authorized, during the same
period. Year-over-year, permitting activity in
the single-family and multi-family segments
are down (58.0)% and (76.2)%, respectively.
ASU’s April real estate report indicates the
Greater Phoenix single-family median resale
home price was $131,715 based on 9,100
transactions. For the third straight month, the
median resale price for foreclosed properties

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

Economic Indicators
($145,965) was greater than those for
traditional transactions ($125,000 due to a
large number of more expensive homes being
foreclosed on (there were 25 transactions with
values over $1 million and roughly 123 sales
were in the $400,000 to $1 million), and 2)
previously purchased foreclosed homes
continue to be resold at prices that are
(15.0)% lower. Of the 9,100 single-family
existing home sales, 6,640 (or 73%) were
traditional sales and 2,460(or 27%) were foreclosed transactions. Year-over-year, the
number of traditional transactions increased
74%, while foreclosed transactions fell 4.7%.
The S&P/Case-Shiller Home Price Index
measures the change in housing prices based
on repeat sales. In March, the home price
index in Phoenix was 106.83, (4.5)% below
February levels and (36.0)% below the same
month last year. In April, the 20 metropolitan
area index, including Phoenix, was (18.7)%
below levels a year ago. Phoenix, however,
remains the metropolitan area with the
largest year-over-year decline.
Based on MLS data released in May, the
month’s supply of housing in April was 6.6
months. On a seasonally adjusted basis, this
was the lowest supply of unsold homes since
March 2006. The comparable figure in April
2008 was 12.3 months.
A total of 3.5 million passengers entered and
exited aircraft at the Phoenix Sky Harbor
International Airport in March. This was a
decrease of (9.7)% from the same month in
the prior year. Year to date, air passenger
traffic is down by (11.1)%, the largest first
quarter decline on record (data is available
from 1980).
In May, AHCCCS caseloads increased to a
total of 1,224,247 members, a 2.3% increase
over the prior month. At current levels, the
AHCCCS caseloads are 10.9% above May
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 85,607 TANF recipients
in the state in March, a decrease of (0.7)%
from the prior month. Year-over-year,
caseload is up by 8.3%. The FY 2009 budget
assumes the TANF caseload will grow by
2.5%.

(Continued)

The Supplemental Nutrition Assistance
Program (SNAP), formerly known as Food
Stamps, provides assistance to low-income
households to purchase food. In February,
there were a total 801,339 food stamp
recipients in the state, an increase of 2.0%
over the prior month. Compared to the
same month last year, food stamp
participation was up by 27.5%.
Between February and April 2009, the
Department of Correction’s (ADC) inmate
population increased by an average of 178
inmates per month. ADC now has an average
population of 40,009 inmates, or 1,635 more
inmates than in the same period last year.
(Hans Olofsson, Martin Lorenzo)

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

Economic Indicators

(Continued)

Table 6

ECONOMIC INDICATORS
Indicator
Arizona
- Unemployment Rate
- Initial Unemployment Insurance Claims
- Non-Farm Employment – Total
Manufacturing
Construction
- Average Weekly Hours, Manufacturing
- 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
- Gross Domestic Product
(Chained 2000 dollars, seasonally adjusted)
- 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

April
April
April
April
April
April
Feb-Apr
Feb-Apr

7.7%
41,068
2.48 million
166,500
140,700
38.1
$42.1 million
$131.4 million

(0.1)%
4.8%
(0.1)%
0.2%
(1.9)%
(2.6)%
(10.3)%
(8.6)%

2.8%
55.9%
(6.6)%
(4.8)%
(27.8)%
(5.7)%
(33.8)%
(15.2)%

Feb-April
Feb-April

788
147

26.1%
(28.0)%

(58.0)%
(76.2)%

April
April
April
April

6,640
2,460
685
270

11.8%
(7.9)%
13.2%
(8.5)%

74.0%
(4.7)%
2.2%
35.0%

April
April
April
April
March
April
March
February

$125,000
$145,965
$116,500
$112,250
106.83
6.6 months
3.5 million
$8.29

1st Quarter 2009
2nd Quarter 2009
4th Quarter 2008
July 1, 2008
May
March
March
Feb-Apr

44.2
33.0
$213.4 billion
6.50 million
1,224,247
85,607
801,339
40,009

N/A
2.8%
(0.7)%
146,759
2.3%
(0.7)%
2.0%
141 inmates

(58.4)%
(10.6)%
1.0%
2.3%
10.9%
8.3%
27.5%
1,635 inmates

1st Quarter 2009

$11.4 trillion

(5.7)%

(2.5)%

May
April
Jan-Mar
April

54.9
99.0
$2.58 billion
212.671

34.6%
1.0%
5.1%
0.0%

(5.5)%
(3.0)%
(22.2)%
(0.6)%

(1.6)%
(0.6)%
1.3%
6.8%
(4.5)%
(1.4) months
25.2%
(4.8)%

(44.4)%
(19.4)%
(31.5)%
(23.2)%
(36.0)%
(5.7) months
(9.7)%
(5.7)%

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

Summary of Recent Agency Reports
AHCCCS – Report on Healthcare
Group – Pursuant to A.R.S. § 362912AA, the Arizona Health Care
Cost Containment System (AHCCCS)
is submitting its quarterly financial
report for Healthcare Group (HCG).
The agency reports that HCG has an
estimated net gain of $2.1 million for
the first 2 quarters of FY 2009.
According to its annual audit, HCG
began FY 2009 with total unpaid
prior year obligations and other
liabilities of $15.8 million, resulting in
total obligations of $13.8 million at
the present.
AHCCCS reports that, as of
December 31, 2008, total statewide
HCG medical plan enrollment was
16,822, with participating members
from 6,263 private employers. Since
September 2008, enrollment has
decreased by (2,087) people.
AHCCCS attributes the enrollment
decreases to rate increases that
went into effect in September 2008.
(Amy Upston/Blake Riley)
AHCCCS – Report on Systematic
Alien Verification for Entitlements
Program – Pursuant to A.R.S. § 362903.03, the Arizona Health Care
Cost Containment System (AHCCCS)
provided its quarterly report on the
collection and verification of
documentation associated with the
Systematic Alien Verification for
Entitlements (SAVE) program.
AHCCCS, in conjunction with the
Department of Economic Security
(DES), verified the immigration status
of 40,651 individuals between
October 1, 2008 and December 31,
2008. During this period, AHCCCS
and DES did not identify any
fraudulent documents using the
SAVE program. The program did
refer one citizen and one non-citizen
for prosecution on other grounds.
(Blake Riley)
Arizona Community Colleges –
Annual Report – Pursuant to A.R.S. §
15-1427, the Arizona Community
Colleges are required to report on
their progress during the previous

year. The FY 2008 report includes
the following summary information
on the state system:

• 196,849 students (headcount)

•
•

•

•

were enrolled for credit, resulting
in a Full-Time Student Equivalent
count of 118,434.
87% of enrolled students resided
within the district, while 13% did
not reside within the district.
Total number of instructors
employed was 9,900, of which
2,567 (26%) were full-time and
7,333 (74%) were part-time.
Total operating revenues were
$1.3 billion (this amount excludes
bond proceeds and fund
balance which total $170
million).
Total expenditures were $1.4
billion.

In addition, districts are statutorily
required to provide a listing and
description of both credit and noncredit courses. The districts also
included a description of their
major accomplishments in FY 2008.
(Marge Zylla)
Arizona Community Colleges –
Report on Workforce Development
Expenditures – The Arizona
Community Colleges are reporting
on their previous year’s workforce
development plan activities and
expenditures. A.R.S. § 15-1472
requires each community college
district to establish a workforce
development account. Monies in
the account are derived from
Proposition 301 sales tax revenues
and shall be used for workforce
development and job training.
Total revenues in FY 2008 were
$17,272,000 and total expenditures
in the same year were $17,725,700.
(Marge Zylla)
State Department of Corrections –
Report on Bed Plan – The State
Department of Corrections (ADC)
has provided a report to JLBC Staff
with updated information related
to their bed plan. Based on the
report, ADC awarded a new

contract for 752 provisional beds to
Corrections Corporation of America.
The beds will house medium security
inmates at the Huerfano County
Correctional Center in Walsenburg,
Colorado and inmates began being
transferred to the facility April 27,
2009. As of May 20, 2009 all 752 beds
were filled. (Martin Lorenzo)
Department of Education – Budget
Status Report – Pursuant to A.R.S. §
35-131D and a footnote in the FY
2009 General Appropriation Act, the
Arizona Department of Education
(ADE) recently provided an update
regarding its budget status for FY
2009. In that report, ADE estimates
that it will experience a $4 million net
funding surplus for FY 2009. This
figure, however, does not yet reflect
adjustments for current year
Average Daily Membership (ADM)
growth that typically are made late
in the fiscal year, so is preliminary in
nature. ADE is expected to release a
further update in early June that will
provide a better sense of its overall
formula costs for the year. (Steve
Schimpp)
Arizona Department of Public Safety
– Quarterly Report on GIITEM –
Pursuant to Laws 2008, Chapter 285
(General Appropriation Act), the
Arizona Department of Public Safety
(DPS) is required to report quarterly
on the Gang and Immigration
Intelligence Team Enforcement
Mission (GIITEM). As of the third
quarter of FY 2009, DPS had spent or
encumbered $7.5 million of the $10.4
million appropriation for the DPS
immigration staff. In addition, in FY
2009, DPS spent $698,500 of the FY
2009 $10 million appropriation and
$7.6 million from the remaining
portion of non-lapsing FY 2008
monies for local law enforcement
grants. After third quarter spending,
$2.2 million still remains of the nonlapsing FY 2008 local law
enforcement grant funding. (Kim
Cordes-Sween)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2009

State of Arizona
General Fund Revenue:

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

FY 2009 YTD (Ten Months)

Change From
Actual
April 2009

April 2008
Amount

Change from
Forecast

Percent

Actual
Percent

Amount

April 2008

April 2009

Amount

Forecast
Percent

Percent

Amount

Taxes
Sales and Use

299,864,274

($73,973,977)

(19.8) %

($48,443,126)

(13.9) %

$3,221,785,655

($479,011,144)

Income - Individual

173,242,869

(432,751,502)

(71.4)

(422,496,687)

(70.9)

2,189,800,446

(767,551,690)

(26.0)

(523,557,776)

(19.3)

66,336,324

(58,877,240)

(47.0)

(11,439,791)

(2.5)

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

(12.9) %

($133,549,465)

(4.0) %

(29,212,876)

(30.6)

446,688,134

(160,826,596)

(26.5)

93,198

13.1

(48,280)

(5.7)

12,403,615

(856,004)

(6.5)

354,129

2.9

(474,554)

(17.3)

(243,609)

(9.7)

25,040,829

(1,885,349)

(7.0)

(481,570)

(1.9)

2,829,449

(594,514)

(17.4)

(698,051)

(19.8)

24,305,477

495,784

2.1

(46,633)

(0.2)

46,576,995

(10,894,366)

(19.0)

(3,490,305)

(7.0)

300,352,087

2,557,182

0.9

190,922

0.1

--

210,372

(109,631)

(34.3)

106,059

101.7

(13.6)

623,679

137.0

804,420
2,264,583

87,190

35,309

649,403

(166,402)

$592,655,507

($577,604,048)

68.1
(20.4)
(49.4) %

87,190
602,403
($503,943,341)

--

1,078,788

(169,398)

$6,221,665,403

($1,407,356,846)

0.0

29,952,000

(1,703,119)

(5.4)

(30.1)

28,212,736

(2,715,013)

(8.8)

(2,473,665)

(8.1)

(5,195,965)

(33.6)

(46.0) %

(18.4) %

($667,800,446)

(9.7) %

Other Revenue
Lottery

1,640,500

(4,661,100)

(74.0)

License, Fees and Permits

3,250,593

(1,223,995)

(27.4)

Interest

0
(1,398,907)

328,208

(4,606,334)

(93.3)

(842,792)

(72.0)

10,270,820

(70,942,858)

(87.4)

Sales and Services

2,890,626

(1,562,296)

(35.1)

(808,074)

(21.8)

36,574,826

(4,858,066)

(11.7)

Other Miscellaneous

3,041,616

803,487

170.0

35,496,612

5,477,596

18.2

18,727,942

18,727,942

0.0

18,727,942

18,727,942

(82.5)

30,266,978

(3,403,620)

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

175,120
30,054,605
$622,710,112

(1,661,569)
5,816,135
($571,787,913)

35.9
-(90.5)

1,915,216
0
(824,880)

0

0.0

936,152

2.6

6,411,750

22.0

--

0

0.0

(10.1)

4,224,513

16.2

3,902,785

24.0 %

(1,959,437)

(6.1) %

189,501,914

(59,417,138)

(23.9) %

(47.9) %

($505,902,778)

(44.8) %

$6,411,167,317

($1,466,773,984)

(18.6) %

($663,897,661)

2.1 %
(9.4) %

Other Adjustments
Urban Revenue Sharing

(60,639,783)

(3,594,872)

0

0.0

(606,397,832)

(35,948,725)

0

0.0

'09 Budget Plan Transfers

5,780,267

5,780,267

--

0

0.0

251,425,865

232,549,686

--

0

0.0

53,418,581

53,418,581

--

0

0.0

324,504,217

324,504,217

--

0

0.0

(1,440,935)

55,603,976

-- %

0

0.0 %

(30,467,750)

521,105,178

-- %

0

0.0 %

'09 Budget Revision Transfers
Sub-Total Other Adjustments
TOTAL REVENUE

$621,269,177

($516,183,937)

6.3

(45.4) %

($505,902,778)

(44.9) %

$6,380,699,567

($945,668,806)

6.3

(12.9) %

($663,897,661)

(9.4) %