JLBC - Monthly Fiscal Highlights

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

Summary
•

Preliminary June General Fund revenue
collections were $1.41 billion, including
approximately $672.4 million in budget
balancing fund transfers. Excluding these
transfers and Urban Revenue Sharing, June
collections were (17.7)% below the prior year,
and $(109.4) million below the January revised
budget forecast.

collections were

Preliminary full year General Fund revenues
equaled $8.24 billion, the lowest level since FY
2005. After adjusting for fund transfers and
Urban Revenue Sharing, full year collections
were $7.69 billion. This amount is down (18.4)%
when compared to FY 2008. This was the
largest dollar and percentage decline in
revenues in records going back to World War II.

$7.69 billion. This

Among the major revenue categories:

amount is down

•

June sales tax collections were down
(14.4)% compared to June 2008, and were
$(58.1) million short of the monthly forecast.
Sales tax revenues dropped (13.7)% during
all of FY 2009. Total collections of $3.76
billion were the lowest since FY 2005.

•

June individual income tax collections
were down (7.7)% compared to June
2008, and were $(24.7) million below
forecast. Overall, individual income tax
revenues dropped (24.6)% for the full year.
Total net collections of $2.57 billion were
the lowest since FY 2004.

“… full year

(18.4)% when
compared to FY
2008”.

June corporate income tax collections
were down (35.8)% below June 2008,
which was $8.3 million above the forecast
for the month. For the entire year,
corporate income tax collections declined
(24.5)%. Total net collections of $592
million were the lowest since FY 2004.

FY 2009 Estimated Shortfall

The year-to-date revenue shortfall is $(893.9)
million below the January revised budget
forecast. (See Table 2 and page 3 for more
information).
www.azleg.gov/jlbc.htm

July 2009

The $650 million in budget shortfall solutions
enacted in Chapters 5 and 6 of the 1st Regular
Session, along with a $50 million budget carryforward balance, allows the state to cover a
$700 million revenue shortfall. (See May
Monthly Fiscal Highlights for more information).
We had noted in June that, despite these
additional solutions, the state may still have a
shortfall of $(200) million.
Based on preliminary numbers, we now
estimate the FY 2009 shortfall at $(474) million.
This shortfall estimate is a combination of both
revenue and spending factors:
•

•

The revenue shortfall is greater than JLBC
predicted in the last MFH. Based on
preliminary collection numbers, June
collections are $(109) million below the
forecast for the month. This would bring
the revenue shortfall for the year to $(841)
million, rather than the $(815) million
estimated last month.
The budget included $1.33 billion in onetime financing sources, including provisions
from the January special session for $591
million in fund transfers. Based on
preliminary numbers, approximately $53

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

Economic Indicators ..............................................4
Summary of Recent Agency Reports
• AHCCCS – GME Positions...................................8
• AHCCCS – Healthcare Group ..........................8

•
•
•
•
•
•

Corporation Commission – Filings .................... 8
DES – ATP-C Training Program .......................... 8
ADE – Budget Status Report.............................. 8
ADE – Federal Monies for English Learners ..... 8
Prop 300 Report................................................... 8
ADOT – STAN Annual Report............................. 9

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

Summary
•
“Once the $250
million in federal
stabilization
funds are
received, the net
[FY 2009 shortfall]
problem is
estimated to be
$229 million”.

•

(continued)

million of the total amount will 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 an estimated $35 million.
The budget included $250 million in
General Fund savings associated with
reducing the FY 2009 appropriation made
to the Arizona Department of Education,
and backfilling this reduction with federal
stabilization funds. The federal funds were
part of the stimulus package passed by
Congress in February. Laws 2009,
Chapter 5 made the $250 million General
Fund reduction contingent upon
Arizona’s receipt of federal stabilization
funds. Due to technical reasons, these
funds were not disbursed to Arizona in FY
2009 and the state did not realize the
General Fund savings. The $250 million
reduction and backfill is instead
expected to occur in FY 2010, and will
help offset the carry-forward shortfall.

The revenue and expenditure shortfalls add to
$(1,179) 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
$(479) million (see Table 1 below). Of this
amount, however, $250 million will be offset by
the reversion of state General Fund monies
and subsequent receipt of federal stabilization

funds.
Table 1

FY 2009 Estimated Shortfall
($ in Millions)

Revenue shortfall
Fund transfer reduction

(53)

Net revertment loss

(35)

ADE Stabilization
Gross Shortfall
Budgeted carry-forward
Net shortfall

650
50
$(479)

There is no 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.
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. As
a result, the FY 2009 shortfall will need to be
resolved during FY 2010. Once the $250 million
in federal stabilization funds are received, the
net problem is estimated to be $229 million.
This amount is not included in the current $3.2
billion deficit reduction plan being discussed in
the Legislature.
JLBC/JCCR Meetings –There were no JLBC or
JCCR meetings in July.

General Fund Revenues
Compared to Forecast and FY 2008 Collections
($ in Millions)

June
Year-to-Date
____________
1/ Revised JLBC Baseline

(250)
(1,179)

Chapter 5/6 adjustments

Table 2

FY 2009
Collections
$ 1,406.2
$ 8,244.7

$(841)

Difference From
Jan ’09 Forecast 1/
$ (162.4)
$ (893.9)

Difference
From FY 2008
$ (137.5)
$ (1,322.1)

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

June Revenues

“Sales Tax
collections
were…down
(14.4)%
compared to last
June, and were
$(58.1) million
below the

Sales Tax collections were $255.7 million in
June. These revenues were down (14.4)%
compared to last June, and were $(58.1)
million below the budget forecast. The June
decline marked the 17th consecutive month of
year-over-year reductions, and the 8th
consecutive month of double digit declines
compared to the previous year.
For the entire fiscal year, sales tax revenues are
down (13.7)% compared to last year. FY 2009
marks the second consecutive year of sales tax
declines. Prior to the last 2 years, sales tax
collections had not declined on an annual
basis since 1981, when the sales tax on food
was eliminated.
Table 3 displays the June growth rates for the
largest categories.
Table 3

Sales Tax Growth Rates
Compared to Prior Year

budget
forecast”.

Retail
Contracting
Utilities
Use
Restaurant & Bar

June
(11.1)%
(36.7)%
(3.8)%
(29.8)%
(6.7)%

YTD
(12.2)%
(26.0)%
0.4%
(14.1)%
(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 (11.1)% in June, and contracting fell by
(36.7)%.
As noted in Table 4, for FY 2009 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
(7.0)% for the year. The largest subcategory
decline is in Motor Vehicles, which represents
20.6% of the total, and is down (32.9)%
compared to the prior year.
While retail and contracting activity explains a
portion of the sales tax drop, estimated
payments also played a role. In June, the
largest retailers are required to pay a portion of
their July sales tax payment a month early. At
this time each year, the Department of
Revenue (DOR) calculates the impact of this
payment shift as part of June revenue
collections. This calculation typically helps the
bottom line, as sales traditionally grow from

one summer to the next. However, for the
second year in a row, steep June declines
were further worsened by the estimated
payment factor.
Individual Income Tax net revenues were
$279.6 million in June. Collections were down
(7.7)% compared to the prior year, and were
$(24.7) million below the budget forecast.
Table 5 displays June 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

June
(3.4)%
(37.0)%

YTD
(7.3)%
(34.1)%

(43.8)%

7.9%

Withholding collections fell by (7.3)% in FY 2009,
the largest decline on record (data going
back to FY 1961). The only previous declines
occurred in FY 1983 and FY 2002 when
withholding collections fell by (4.0)% and
(2.3)%, respectively.
The (34.1)% decrease in estimated and final
payments in FY 2009 is the largest on record.
Double-digit declines have only been
recorded twice before: in FY 2002 and FY 2008
when payments fell by (18.7)% and (12.9)%,
respectively.
In total, FY 2009 income tax collections were
(24.6)%, below last year and $(588.8) million
short of the individual income tax forecast. The
state has only experienced outright declines in
net collections four times over the last 48 years.
The largest decrease prior to FY 2009 occurred
in FY 2002 when net collections fell by (9.3)%.
Corporate Income Tax collections were $96.5
million in June, or (35.8)% below last year.
Collections were $8.3 million above forecast for
the month.
While collections for all of FY 2009 are down
(24.5)% from the prior year, we had projected
that revenues would actually fall further.
Collections for the year exceeded the forecast
by $18.2 million. The majority of this increase
was due to collections from the tax amnesty
program in the month of June (see below).
Tax Amnesty – Laws 2009, Chapter 3

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

June Revenues
Table 4

(continued)

YTD (12-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
established a tax amnesty program that ran
from May 1, 2009 through June 1, 2009. DOR
reports that the total impact of the amnesty
program was $31.8 million, including $24.8
million in “new” money, and an additional $7
million in reduced refunds that would have
otherwise been due taxpayers. Approximately
$16.7 million of the amnesty impact was in the
corporate income tax category, $13.0 million in
sales tax, and $2.1 million in individual income
tax.
The $31.8 million impact of the tax amnesty
program was significantly over the projected
impact of $5 million. Amnesty collections were
not anticipated to be high, since the last
amnesty program occurred relatively recently
in 2004.
The Lottery Commission reports that ticket sales
for the month of June were $38.2 million, which
was $3.2 million above sales in June 2008.

% of
Total Sales
30.7%
20.6%
7.5%
7.4%
6.9%
5.8%
5.5%
15.6%
100.0%

% Change
Over FY 2008
(7.0)%
(32.9)%
(14.4)%
(2.4)%
(13.6)%
(13.1)%
(14.6)%
0.2%
(12.2)%

Year-to-date, ticket sales have increased by
2.4% compared to last year. For FY 2009, $31.0
million in revenue has been distributed to the
General Fund. This distribution was $(19.4)
million below the budgeted distribution
amount for the year.
Local Transportation Assistance Fund II, Local
Transportation Assistance Fund, County
Assistance Fund, and the Heritage Fund have
all reached their respective statutory caps.
Healthy Arizona was approximately $1 million
short of its cap, and Homeless Shelters did not
receive any distribution.
Interest income of $19.7 million for FY 2009 was
only (1.7)% under the forecast for the year.
However, this amount was $(75.4) million below
FY 2008 interest income. The operating fund
balances decreased throughout the fiscal
year, which resulted in the state earning less
interest.

Economic Indicators
NATIONAL
According to the first (“advance”) release of
the U.S. Real Gross Domestic Product (GDP) for
the 2nd quarter of 2009, the nation’s economy
contracted at an annual rate of (1.0)% during
this period. This was a much smaller
contraction than the (6.4)% decline in the
previous quarter. Additionally, revised data
shows a real GDP decline of (3.9)% over the
past four quarters, the steepest peak-tothrough decline in postwar history.
The Conference Board’s U.S. Consumer
Confidence Index, a measure based on a

survey of 5,000 U.S. households, declined from
a reading of 49.3 in June to 46.6 in July. After
strong advances in April and May, consumer
confidence retreated somewhat in both June
and July. The decline in the index over the last
two months is primarily a reflection of rising
unemployment and deteriorating labor market
assessments.
The Conference Board’s U.S. Index of Leading
Economic Indicators increased by 0.7% in
June, following advances of 1.3% in May and
1.0% in April. At a reading of 100.9, the index
recorded its best performance since July 2008.
Seven of the 10 components that make up the

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

Economic Indicators
index improved in June. The largest positive
contributors to the index in June were the
interest spread between 10-year Treasury
bonds and the federal funds rate, building
permits, and stock prices.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), rose by 0.7% in
June largely due to a 17.3% surge in gasoline
prices. Year over year, the CPI is down by
(1.2)%, the largest price decline since February
1950. The core CPI, which excludes food and
energy prices, increased by 0.2% in June. The
corresponding year-over-year increase was
1.7%.
The Semiconductor Industry Association (SIA)
reported that Semiconductor Billings (3-month
moving average) in the U.S. increased by 3.9%
between April and May, from $2.62 billion to
$2.72 billion. However, despite the
improvement in semiconductor sales over the
prior 3 months, May sales remained (19.4)%
below the level reported a year ago.
ARIZONA
The most recent release of economic data for
the state points to a further weakening of the
labor market. According to the Commerce
Department’s monthly Workforce Report,
nonfarm payroll employment in June declined
by (2.0)% from the prior month. Compared to
June 2008, nonfarm payroll employment has
fallen by (7.6)%. In the last 70 years, the only
larger year-over-year decline was December
1945 when the state’s payroll employment
decreased by (8.2)%.
Arizona suffered the nation’s second largest
year-over-year job loss in June after Michigan.
Since the onset of the national recession in
December of 2007, the state has shed more
than (308,000) jobs, or 11.4% of its workforce.
The construction sector added 2,400 jobs
between May and June, which was the first
monthly gain in construction employment
since August 2007. Despite this gain, the
construction sector currently employs (50,400)
fewer workers than a year ago.
The manufacturing sector lost another (2,100)
jobs between May and June. The industry has
shed jobs in 30 of the last 36 months and
currently employs the same level of workers
(162,800) as in December 1983. This means

(Continued)

that the state has lost almost (51,000)
manufacturing jobs since the industry reached
its peak employment in June 1998.
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 in June reached a level of 39.3, an
improvement of 0.3% over the prior month.
The average work week in the manufacturing
industry was (4.8)% less than in June 2008.
The state’s seasonally adjusted
unemployment rate increased from 8.2% in
May to 8.7% in June. This is the highest
recorded unemployment rate since August
1983 when 9.8% of the state’s labor force was
out of work. More than 282,000 individuals
were unemployed in June 2009, a 60%
increase from the same month in the prior
year.
The Department of Commerce reported that
38,758 initial claims for unemployment
insurance were filed in June, an increase of
58.1% over last year. Monthly claims have
varied between 35,000 and 41,000 in the
current calendar year. This is more than 60%
above the levels seen before the start of the
recession. For the week ending on July 11, a
new record-high of 112,918 Arizona residents
filed continued claims for jobless benefits.
While more and more Arizona residents are
joining the ranks of unemployed as the state’s
labor market continues to deteriorate, there
are some tenuous signs that suggest that the
real estate market may have reached its low
mark. For example, building permits for single
family homes have increased for 4
consecutive months after having reached a
bottom-low of 556 permits in February. Sales
of existing single family homes in the Greater
Phoenix area reached a record-high of 30,905
units in the second quarter of the current
calendar year. While foreclosures still make
up a large percentage of total homes sales,
this figure nonetheless fell from a high of 45%
in the last quarter of 2008 to 31% in the
second quarter of 2009. Additionally, data

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

Economic Indicators
from the Arizona Regional Multiple Listing
Services, Inc. suggests that the housing
market no longer suffers from the level of
oversupply reported a year ago.
Based on data released by the U.S. Census
Bureau, an average of 1,282 building permits
were issued each month between April and
June 2009. This amount includes an average
of 1,271 single-family residential building
permits authorized and 11 multi-family
permits. In percentage terms, the 1,271
single-family permits represent an increase of
28.0% above the prior month but a decrease
of (37.2)% over the same period a year ago.
In the multi-family segment, however, the
average of 11 permits authorized each month
during the 3-month period represented
month-over-month and year-over-year
declines of (73.8)% and (98.7)%, respectively.
ASU’s real estate report indicates that in the
Greater Phoenix area, a total of 11,820 singlefamily existing home sales occurred in June
and resulting in an average single-family
median resale home price of $140,000. The
11,820 sales is comprised of 7,760 traditional
home sales and 4,060 foreclosed transactions.
The average resale home price for both
traditional and foreclosed transactions was
$134,000 and $154,000. The average resale
price of foreclosed transactions has now
exceed that of traditional transactions since
February 2009 and continues to be attributed
to more expensive homes being foreclosed
(22 with values in excess of $1 million) and
previously foreclosed homes being resold at a
median price reduction of (24.0)%.
In the multi-family segment, ASU’s June report
suggests there were 1,390 townhousecondominium median transactions with an
average sales price of $110,000. The 1,390
transactions included 880 traditional and 510
foreclosed transactions. Traditional
transactions had a median price of $107,000,
while foreclosed transactions had a median
price of $112,100. The total number of units
bought and sold represents an increase of
28.1% above levels a year ago, while the yearover-year median resale price decreased
(27.5)%.
Based on the most recent MLS data available,
it is estimated that the month’s supply of
housing in June was 5.9 months. Stated
differently, at the current rate of existing

(Continued)

home sales (on a seasonally adjusted basis), it
would take slightly less than 6 months to
unload the current inventory of unsold homes.
The comparable figure in June 2008 was 10.9
months.
The S&P/Case-Shiller Home Price Index
measures the change in housing prices based
on repeat sales. Between April and May, the
20 metropolitan area index, which includes
Phoenix, increased (by 0.5%)for the first time
since July 2006. The home price index in
Phoenix, however, fell (0.9)% to a reading of
103.56 during the same period. Phoenix was
one of five areas included in the 20
metropolitan area index that experienced
month-over-month declines. Year-over-year,
the 20 metropolitan area index is down
(17.1)%, while Phoenix is down (34.2)%.
While an economic downturn tends to
adversely affect state revenue collections, it
also often accompanied by increased state
spending related to health and welfare as
evident from the caseload data presented
below.
In July, AHCCCS caseloads increased to a total
of 1,275,134 members, 1.6% above the number
of recipients in June 2009. At current levels,
AHCCCS caseloads are 14.4% above July 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 84,411 TANF recipients
in the state in May, about the same number
as in the prior month but a year-over-year
caseload increase of 6.5%. The FY 2009
budget assumes the TANF caseload would
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 May, there
were a total 868,502 food stamp recipients in
the state, an increase of 3.5% over the prior
month. Compared to the same month last
year, food stamp participation was up by
31.1%. The number of food stamp recipients
began increasing steadily in July 2007, after
several years in the 550,000 – 575,000 range.
During FY 2009, the Department of Correction’s
(ADC) inmate population increased by an
average of 134 inmates per month. As of June

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

Economic Indicators

(Continued)

30, 2009, the department’s inmate population
totaled 40,412 inmates, 1,515 (or 3.9%) more
inmates than on the same day last year.
(Hans Olofsson, Martin Lorenzo)

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)
- 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 2005 dollars, SAAR)
- 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

June
June
June
June
June
June
Apr-Jun
Apr-Jun

8.7%
38,758
2.41 million
162,800
141,600
39.3
$43.3 million
$138.7 million

0.5%
11.2%
2.0%
(1.3)%
1.7%
0.3%
2.9%
3.3%

3.2%
58.1%
(7.6)%
(6.8)%
(26.3)%
(4.8)%
(37.5)%
(14.2)%

Apr-Jun
Apr-Jun

1,271
11

28.0%
(73.8)%

(37.2)%
(98.7)%

June
June
June
June

7,760
4,060
880
510

11.7%
33.8%
18..1%
50.0%

70.0%
24.0%
40.8%
121.7%

June
June
June
June
May
June
May
April

$134,000
$154,000
$107,000
$112,100
103.56
5.9 months
3.2 million
$5.01

1st Quarter 2009
1ST Quarter 2009
July 1, 2008
July
May
May
Apr-Jun

44.2
$211.5 billion
6.50 million
1,275,134
84,411
868,502
40,314

N/A
(0.7)%
146,759
1.6%
0.0%
3.5%
134 inmates

(58.4)%
(0.6)%
2.3%
14.4%
6.5%
31.1%
1,544 inmates

2nd Quarter 2009

$12.9 trillion

(1.0)%

(3.9)%

July
June
Mar-May
June

46.6
100.9
$2.72 billion
214.459

(5.5)%
0.7%
3.9%
0.7%

(10.3)%
(1.2)%
(19.4)%
(1.2)%

3.1%
2.6%
(2.7)%
(9.9)%
(0.9)%
(0.3) months
(3.7)%
(38.8)%

(38.5)%
(9.4)%
(35.1)%
(15.9)%
(34.2)%
(5.0) months
(9.2)%
(41.3)%

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

Summary of Recent Agency Reports
AHCCCS – Report on Graduate
Medical Education Residency
Positions – Pursuant to A.R.S. § 362903.01, the Arizona Health Care
Cost Containment System
(AHCCCS) has submitted its annual
report on the number of new
residency positions funded by local,
county, or tribal governments. Due
to information requests by the
Centers for Medicare and Medicaid
Services, no local monies have yet
been contributed or matched for FY
2009. AHCCCS anticipates that
contributions in FY 2009 will provide
partial funding for an additional 555
residency positions. These positions
will be located at Maricopa
Medical Center, University Medical
Center, and University Physicians
Healthcare Hospital. The positions
will be funded by local contributions
of $10,200,400 and a federal match
of $32,177,500, resulting in
$42,377,900 total new funding.
(Amy Upston)
AHCCCS – Semi-Annual Report on
Healthcare Group – Pursuant to
A.R.S. § 36-2912, the Arizona Health
Care Cost Containment System
(AHCCCS) submitted its semi-annual
report on the number and types of
businesses participating in
Healthcare Group (HCG). AHCCCS
reports that, as of May 2009, total
statewide HCG medical plan
enrollment was 14,770, down by
(6,028) from 3 years prior and down
(652) from March 1, 2009. (Amy
Upston)
Corporation Commission – Report
on Corporations Division Filings –
Pursuant to a General
Appropriation Act footnote, the
Corporation Commission submitted
an annual report on the total
number of filings received and
processed by the Corporations
Division and the amount of time, in
business days, to process each type
of service.
For expedited filings, the amount of
time required to process corporate

filings increased from an average of
3.5 business days in FY 2008 to 4.0
business days in FY 2009. The
commission’s goal for processing
expedited filings is 5 business days or
less.
For regular filings, the amount of
time required to process corporate
filings increased from an average of
21.8 business days in FY 2008 to 22.0
business days in FY 2009. The
commission’s goal for processing
regular filings is 30 business days or
less.
The commission also reported that
in FY 2009 all of the 78,589
corporate filings received were
processed and all of the 136,485
annual report filings received were
processed. These figures declined
from the 102,040 corporate filings
and 183,638 annual reports
received in FY 2008. (Juan Beltran)

Education (ADE) recently provided
an update regarding its budget
status for FY 2009. In that report,
ADE estimates that it will experience
a $55.1 million net funding surplus for
FY 2009. This figure is based on data
from the June 15, 2009 state aid
payment to school districts and
charter schools, which is the final
scheduled payment for FY 2009
(apart from rollover payments,
which are factored into the $55.1
million estimate). The estimated
surplus amount is not final, however,
because of corrections and
adjustments that typically occur
after the close of a fiscal year. The
extent to which the surplus estimate
will change, however, is not known
at this time. (Steve Schimpp)

Department of Economic Security –
Report on Arizona Training Program
at Coolidge (ATP-C) Campus and
Other Placements – A footnote in
the FY 2009 General Appropriation
Act requires the Department of
Economic Security (DES) to report
on placements of developmentallydisabled (DD) clients into stateowned Intermediate Care Facilities
for the Mentally Retarded (ICF-MR)
or at the ATP-C campus in FY 2009.
DES reports that there were no new
permanent placements at the ATPC campus, but that there was 1
new placement into a stateoperated ICF-MR in Phoenix in FY
2009. This placement was deemed
to be appropriate because the
private ICF-MR and community
residential settings denied
placement due to the significant
medical and behavioral needs of
the person. (Jay Chilton)

Department of Education – Report
on Federal Monies for English
Learners – Pursuant to A.R.S. § 15756.10, paragraph 3, the Arizona
Department of Education (ADE)
recently submitted a report that
includes an itemized list of all
federal monies received by the
department for English language
learners in FY 2009. As required by
statute, the report includes a list of
how much of these monies were
distributed to school districts on a
district-by-district basis and the
purposes for which these federal
monies are designated. The report
indicates that ADE received $22.0
million in federal Title III (“Language
Instruction for Limited English
Proficient and Immigrant Students”)
funding for FY 2009. Of that
amount, approximately $20.7 million
was distributed directly to school
districts and charter schools. The
remaining $1.3 million was used for
state administration, technical
assistance, and to meet federal setaside requirements for immigrant
education. (Steve Schimpp)

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

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

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

Summary of Recent Agency Reports
lawfully present in the United States,
and requires semi-annual reports to
the Joint Legislative Budget
Committee. Below is a summary of
the reports:
Community Colleges – District-wide,
the Community Colleges reported a
total of 369,213 students classified
as in-state. They reported 3,420
students who were not entitled to
be classified as in-state because of
a lack of lawful immigration status.
Additionally, 121,045 students
applied for financial aid. Of those
who applied, the community
colleges reported that 191 were not
entitled to any aid because they
were not lawfully present in the
United States.
Universities – At the 3 universities,
119,179 students registered for the
spring 2009 semester. Of the total
students registered, the universities
were able to verify the legal
immigration status of 108,404
students. Additionally, the
universities reported that 10,471 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 304 students
were unverifiable due to their
inability to provide the requisite
documentation.
Department of Economic Security –
The department reported that
10,588 applications were received
for child care assistance during the
reporting period of December 1,
2008 to May 31, 2009. Of this
number, 32 were denied because
criteria for citizenship or legal
residency were not met.
Arizona Department of Education –
The department reported that
19,040 people applied for
instruction in Arizona Adult
Education during the reporting
period of December 1, 2008 to June
1, 2009. Of this amount, 890 were

denied instruction because they
failed to provide acceptable
evidence of citizenship or legal
residence in the United States. The
Department of Education will not
have information available on FY
2009 Family Literacy Program
applicants until August 2009. (Kim
Cordes-Sween)
Arizona Department of
Transportation – STAN Annual Report
– Pursuant to A.R.S. § 28-7009M, the
State Transportation Board has
submitted their third annual report
on the Statewide Transportation
Acceleration Needs (STAN)
Account activities.
The Arizona Department of
Transportation (ADOT) reports that
all appropriations have been fully
deposited to or transferred from the
STAN account, and the total
amount available for expenditure is
$254.4 million. As of June 30, 2009,
the STAN Account had an ending
balance of $101.4 million. This
balance reflects $31.4 million in
earned interest and $153 million in
disbursements.
The State Transportation Board had
originally approved spending a
total of $339.5 million of STAN
monies to accelerate a total of 14
projects. ADOT further reports that
as a result of an FY 2009 transfer of
$(104) million from the STAN
account to the State General Fund,
STAN funding for 3 projects in
Maricopa County was eliminated.
The remaining 11 projects across the
state are currently underway. (Juan
Beltran)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2009

State of Arizona
General Fund Revenue:

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

FY 2009 YTD (Twelve Months)

Change From
June 2008

Actual
June 2009

Amount

Change from
Forecast

Percent

Percent

Amount

June 2008

Actual
June 2009

Amount

Forecast
Percent

Percent

Amount

Taxes
Sales and Use

255,731,805

($43,063,023)

(14.4) %

($58,093,775)

(18.5) %

$3,756,407,238

($597,157,610)

Income - Individual

279,619,636

(23,445,888)

(7.7)

(24,717,391)

(8.1)

2,567,963,782

(838,519,536)

(24.6)

(588,782,718)

8,346,439

96,537,015

(53,914,184)

(35.8)

Property

- Corporate

3,430,956

(1,391,923)

(28.9)

Luxury - Tobacco

2,508,209

(252,184)

(9.1)

2,306,190

69,400

3.1

80,711,051

5,204,656

6.9

- Liquor
Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

($240,165,262)

(6.0) %
(18.7)

9.5

592,157,253

(192,353,528)

(24.5)

18,163,952

3.2

(18.9)

18,244,482

(1,796,856)

(9.0)

244,482

1.4

0

0.0

58,664,410

26,190,021

80.6

28,125,610

92.1

0

0.0

0

6,939,516

9.4

411,370,853

(798,557)

0

(200)

(100.0)

0

38,066

(157,035)

(80.5)

14,488

$720,882,928

($116,950,381)

0

(14,644,300)

(14.0) %

(13.7) %

($68,309,280)

-61.4
(8.7) %

(28,562,811) (100.0)
4,327,858

1.1

(29,253,400) (100.0)
(5,629,147)

(1.3)

210,372

(109,831)

(34.3)

106,059

101.7

1,165,767

(318,987)

(21.5)

640,080

121.8

$7,406,184,157

($1,628,301,280)

(18.0) %

($816,550,344)

(9.9) %

Other Revenue
Lottery
License, Fees and Permits
Interest
Sales and Services

3,998,700

3,052

(100.0)

31,000,000

(17,449,619)

(36.0)

(19,376,000)

(38.5)

0.1

(19,376,000) (100.0)
(1,236,999)

(23.6)

34,531,552

(3,239,536)

(8.6)

(4,526,448)

(11.6)

148,418

(9,443,064)

(98.5)

(3,139,197)

(95.5)

19,669,449

(75,397,530)

(79.3)

(330,551)

(1.7)

8,265,552

(4,355,761)

(34.5)

(6,923,674)

(45.6)

48,241,691

(9,009,895)

(15.7)

(6,139,209)

(11.3)
14.3

Other Miscellaneous

12,171,020

(1,687,131)

(12.2)

(3,030,218)

(19.9)

53,700,556

7,981,299

17.5

6,700,556

Disproportionate Share

48,959,603

(23,229,997)

(32.2)

(5,882,755)

(10.7)

67,687,545

(4,502,055)

(6.2)

(5,882,755)

(8.0)

55,111

(81,756)

(59.7)

(1,482,224)

(96.4)

33,770,392

(264,700)

(0.8)

5,190,592

18.2

Transfers and Reimbursements
Sub-Total Other Revenue
TOTAL BASE REVENUE

73,598,404

(53,438,957)

(42.1) %

(41,071,067)

(35.8) %

288,601,185

(101,882,036)

(26.1) %

(24,363,815)

(7.8) %

$794,481,332

($170,389,338)

(17.7) %

($109,380,347)

(12.1) %

$7,694,785,342

($1,730,183,316)

(18.4) %

($840,914,159)

(9.9) %

Other Adjustments
Urban Revenue Sharing

(60,639,787)

0.0

(727,677,400)

(43,138,471)

'09 Budget Plan Transfers

407,732,667

407,732,667

--

(24,421,868)

(5.7)

660,010,732

660,010,732

--

(24,421,868)

(3.6)

'09 Budget Revision Transfers

264,638,818

264,638,818

--

(28,562,531)

(9.7)

617,563,272

617,563,272

--

(28,562,528)

(4.4)

Sub-Total Other Adjustments
TOTAL REVENUE

611,731,698
$1,406,213,030

(3,594,876)

32,860,657
($137,528,681)

6.3

0

5.7 %

(52,984,399)

(8.0) %

549,896,604

(8.9) %

($162,364,746)

(10.4) %

$8,244,681,946

408,117,030
($1,322,066,286)

6.3

0

0.0

287.9 %

(52,984,396)

(8.8) %

(13.8) %

($893,898,555)

(9.8) %