JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

“July collections
were…$(33.0)
million below the
budget
forecast”.

August 2009

Summary
FY 2010 Revenues

July General Fund revenue collections were
$573.3 million. Excluding Urban Revenue
Sharing, July collections were (10.5)% below
the prior year, and $(33.0) million below the
budget forecast. (See Table 2 and page 4 for
more information.)

The (10.5)% decline in July revenues was the
lowest monthly percentage decrease
compared to the prior year since the
September 2008 decrease of (10.4)%.
Among the major revenue categories:

In comparison, July 2009 General Fund
spending was $1.74 billion. July' s expenditures
are significantly higher than normal due to the
$600 million in K-12 payments rolled over from
FY 2009. July spending exceeded the prior
year by $116.6 million. After adjusting for the K12 rollover, Department of Economic Security
(DES) early draw down of funds, and one extra
state employee payroll in July, spending
actually appears to be somewhat less than in
FY 2009. The August 20th budget proposal
transmitted to the Governor envisions year-end
FY 2010 spending to be virtually flat compared
to FY 2009 at $8.4 billion.
The very large General Fund shortfall in July
revenues compared to expenditures
dramatically reduced the state's overall
operating fund balance, which consists of the
General Fund and non-interest bearing
dedicated funds. Having been boosted by
year-end rollovers and fund transfers, the
operating fund balance was $1.1 billion at the
end of June 2009. By July 31st, the operating
fund balance had fallen to a $(65.8) million
shortfall. To cover this shortfall, the Treasurer
issued Treasurer Warrant Notes (TWNs) as it had
done in the spring. These notes represent
borrowing from the state's interest-bearing
dedicated funds, which are kept in a separate
pool of funds from the operating balance.
During August, the highest daily borrowing was
$397 million.

•

July sales tax collections were down
(18.4)% compared to July 2008, and were
$(22.9) million short of the monthly forecast.

•

July individual income tax collections were
down (11.5)% compared to July 2008, and
were $(29.1) million below forecast.

•

July corporate income tax collections
were up 44.4% compared to July 2008,
which was $11.1 million above the forecast
for the month. July is a relatively small
collection month for corporate income tax
collections. The increase over last year is
due to unusual audit activity during the
month.

The FY 2010 budget as transmitted to the
Governor on August 20th assumed a base
revenue decrease of (1.0)% below the FY 2009
forecast (excluding tax law changes and onetime revenues).
Based on preliminary collections, however,
FY 2009 revenue growth was lower than
forecast. As a result of this shortfall, FY 2010
base revenues will now have to grow by 0.9%
to meet the budgeted revenue level of $8.38
billion.

Table of Contents
July Revenues..........................................................4
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on August
31, 2009.

Economic Indicators ..............................................5
Summary of Recent Agency Reports
• ADC - Bed Plans ..................................................9

•
•
•
•

Arizona Historical Society Funds ....................... 9
Lottery - Performance Incentive Plan ............. 9
DPS - Quarterly Report on GIITEM .................... 9
DWR -Assured & Adequate Water Fees ......... 9

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

Summary

(continued)

•

FY 2010 Spending
Table 1

General Fund Spending
Increase/(Decrease) – FY 10 over FY 09

“After accounting
for the K12, DES and
payroll
adjustments, July
2009 expenditures
go from exceeding
July 2008
expenditures by
$116.6 million to
being $105 million

Agency
ADE
AHCCCS
DHS
DPS
ADC
SFB
DES
All Other

($ in millions)
$221.2
16.3
12.4
10.7
(4.8)
(19.5)
(102.7)
(16.9)

Total

$116.6

Of the $116.6 million increase in July 2009
spending over 2008, the main spending
changes were as follows:
•

less than July
2008”.

•

•

The Arizona Department of Education
(ADE) spent $921 million in July 2009, or
$221 million more than the $700 million in
July 2008. Because July 2009 had an extra
rollover payment of $282 million, however,
the ADOA figures suggest that ADE’s
spending on an equivalent basis was $61
million below FY 2009 levels.
DES spent $103 million less in July 2009 than
it did in July 2008. DES’ July expenditures
are disproportionately high because it
transfers its entire match for the federal
Long Term Care program for the year to
AHCCCS in that month. As a result of the
higher federal stimulus match for services,
DES’ transfer was reduced by $101 million.
Setting aside that issue, DES expenditures
were virtually flat between July 2008 and
July 2009.
Given the lack of enacted Budget
Reconciliation Bills (BRB), the need for cash
flow management has increased General
Fund spending. For example, the
Department of Public Safety typically
spends additional funds from the Highway
User Revenue Fund and the State Highway
Fund above existing statutory caps.
Because a provision suspending these
caps has not yet been signed into law, the
Department has been “front-loading” its
General Fund spending. As a result, DPS
General Fund spending in July 2009 was
$10.7 million higher than it was in July 2008.

Due to a different number of state agency
payrolls, July 2008 and 2009 are not
comparable. July 2009 included 3 payrolls,
1 more than in July 2008. Including
benefits, each biweekly General Fund
payroll is around $40-$45 million.

After accounting for the K12, DES and payroll
adjustments, July 2009 expenditures go from
exceeding July 2008 expenditures by $116.6
million to being $105 million less than July 2008.
Even with these adjustments, the normal
fluctuations in day-to-day spending make
fiscal year comparisons difficult. For
example, on August 17th, FY 2010 year-to-date
state spending was $164 million higher than in
FY 2009 after adjusting for the rollover. On
August 18th, FY 2010 spending was $(38)
million lower than the prior year.
As a result, JLBC Staff will provide spending
information in the future based on the end of
the month total. While there can still be issues
of comparability with month-end estimates,
this reporting timeframe does eliminate some
of the timing problems that occur with daily
figures.
FY 2010 Status
The Legislature transmitted the FY 2010 budget
plan to the Governor on July 1st. While the
total package of bills was designed to be
balanced, the Governor line item vetoed
some spending reductions and vetoed entire
Budget Reconciliation Bills (BRBs). While every
state agency has a budget to operate, the
overall budget remains unbalanced.
Based on the agency FY 2010 appropriations
enacted in the regular session as part of
Chapter 11 and Chapter 12, plus the Arizona
Department of Education appropriation in
Chapter 1 of the 3rd Special Session, the
nominal FY 2010 shortfall is currently $(2.3)
billion. This includes the impact of vetoed BRB
provisions which directly authorized elements
of the $3.2 billion deficit reduction plan, such
as the state asset sale and leaseback of $735
million.
In addition, BRBs also authorize certain
statutory changes that allow agencies to meet
the spending levels in Chapters 11 and 12.
Without these “indirect” BRB provisions, the

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JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

Summary

(continued)

shortfall grows to $(3.3) billion. (This amount is
higher than the baseline shortfall of $3.2 billion
which had presumed the continuation of some
prior year BRBs.)
Even once the FY 2010 budget is finally
approved, there will likely be a new shortfall
since the baseline estimates do no incorporate
the following factors:

•

•

•

•

The remaining FY 2009 shortfall of $(479)
million (see below). This amount has yet to
be finalized. Once it has been
determined, the shortfall will need to be
addressed during FY 2010.
Any new FY 2010 revenue shortfall. With
only one month of data, it is too early to
project the status of FY 2010 baseline
revenues. As described above, the
FY 2010 baseline revenue estimate
assumes growth of 0.9% over FY 2009. To
the extent that July revenues were $(33)
million less than that forecast, however, it is
unlikely that amount will be recovered in
the remaining 11 months. FY 2010 revenue
will next be re-estimated as part of the 4sector consensus forecast to be released
in conjunction with the Finance Advisory
Committee meeting in the fall.
Lost budget savings due to delayed
implementation. Certain budget savings
in the July transmittal were premised on an
October 1st implementation date. Given
that some provisions cannot go into effect
until 90 days after sine die, we will not
achieve all of the budgeted reductions.
The effective date of other provisions,
however, is retroactive to October 1st and
some of those savings will still occur.
The workability of other budgeted

Table 2

assumptions. As with revenues, it is still too
early to tell whether some of the budget
proposals will generate the expected
revenues or savings. For example, the
FY 2009 budget reduced K-12 payments
by $300 million and assumed that local
district cash balances would be sufficient
to cover all the difference. If local cash
balances are insufficient to fully cover the
$300 million, the General Fund is to pay the
difference. That amount will not be known
until October. Based on the level of
FY 2008 cash balances ($186 million), the
state will likely owe the districts some
funding.
FY 2009 Shortfall
The FY 2009 ending balance will not be
finalized until December when the Department
of Administration publishes the state’s Annual
Financial Report.
In the June MFH, JLBC Staff reported that the
FY 2009 shortfall was $(479) million. Of that
amount, $(250) million was due to the late
arrival of federal stabilization funds from the
American Recovery and Reinvestment Act
(ARRA).
In the July MFH, we noted that shifting the $250
million in unpaid FY 2009 K-12 federal
stabilization funds to FY 2010 would help offset
the FY 2009 carryover shortfall. Due to federal
maintenance of effort requirements, however,
this entire offset may not occur.

General Fund Revenues
Compared to Forecast and FY 2009 Collections
($ in Millions)

July
Year-to-Date

FY 2010
Collections
$ 573.3
$ 573.3

Difference From
June ’09 Forecast
$ (33.0)
$ (33.0)

Difference
From FY 2009
$ (65.5)
$ (65.5)

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

July Revenues

“The July decline
[in sales taxes]
marked the 18th
consecutive
month of year-

Sales Tax collections were $290.6 million in July.
These revenues were down (18.4)% compared
to last July, and were $(22.9) million below the
budget forecast. The July decline marked the
18th consecutive month of year-over-year
reductions, and the 9th consecutive month of
double digit declines compared to the
previous year.
Table 3 displays the July growth rates for the
largest categories.
Table 3

Sales Tax Growth Rates
Compared to Prior Year

over-year
reductions, and
the 9th
consecutive
month of double
digit declines
compared to the
previous year.”

Retail
Contracting
Utilities
Use
Restaurant & Bar

July
(12.2)%
(37.2)%
5.0%
(42.0)%
(3.2)%

YTD
(12.2)%
(37.2)%
5.0%
(42.0)%
(3.2)%

As noted in previous months, retail and contracting together account for two-thirds of all
sales tax revenues. The retail sector decreased
by (12.2)% in July, and contracting fell by
(37.2)%.
As noted in Table 4, July taxable sales in the
retail category are down (12.2)% from July of
the prior year. The largest subcategory within
retail is the General Merchandise and
Miscellaneous Retail category, which is down
(6.6)%. Motor Vehicles, which represents 20.6%
of the total, is down (14.6)% compared to July
of the prior year. This decrease in Motor
Vehicles is an improvement from the (32.9)%
decrease in this category for all of FY 2009.
We have yet to see results from the “cash for
clunkers” vehicle program, which began in
late July. Sales tax from this program will be
collected in August and September.
Individual Income Tax net revenues were
$234.8 million in July. Collections were down
(11.5)% compared to the prior year, and were
$(29.1) million below the budget forecast.
Table 5 displays July growth rates for
individual categories.

Table 5

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

July
(6.7)%
(29.2)%

YTD
(6.7)%
(29.2)%

26.0%

26.0%

Corporate Income Tax collections were $33.6
million in July, or 44.4% above last year.
Collections were $11.1 million above forecast
for the month. While collections are
significantly over the forecast, July is a relatively
small collection month. The increase over the
budget forecast was due almost entirely to
unusual audit collections.
The Lottery Commission reports that ticket sales
for the month of July were $38.1 million, which
was $4.1 million above sales in July 2008, an
increase of 12.1%. No transfers of lottery
proceeds were made in the month of July.

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JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

July Revenues
Table 4

(continued)

July 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
30.7%
20.6%
7.5%
7.4%
6.9%
5.8%
5.5%
15.6%
100.0%

% Change
Over FY 2008
(6.6)%
(14.6)%
(23.0)%
(14.5)%
(28.6)%
(10.4)%
(6.8)%
(9.4)%
(12.2)%

Economic Indicators
NATIONAL

“Year over year,
the CPI is down
by (1.9)%, the
largest price
decline since
January 1950”.

According to the second (“preliminary”)
estimate 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 the
same as the initial estimate that was released
in the previous month. This month’s GDP
release, which is based on more complete
source data, showed that inventories fell by
more than previously estimated. The
improvement of final sales and leaner
inventories bode well for a return to positive
GDP growth in the third quarter.
The Conference Board’s U.S. Consumer
Confidence Index, a measure based on a
survey of 5,000 U.S. households, increased by
6.7 points in August to a reading of 54.1. This
followed two consecutive months of declines
in the index. The consumer confidence index
has more than doubled since it fell to a recordlow reading of 25.3 in February. The August
improvement in consumer confidence points
to a gradual recovery in consumer spending.
The Conference Board’s U.S. Index of Leading
Economic Indicators rose for the fourth
consecutive month in July, with a month-overmonth increase of 0.6%. The index, which is
designed to anticipate economic activity 3 to
6 months in advance, appears to signal that
the national economy is bottoming out and
about to enter its recovery phase. The July
reading of 101.6 was the highest since June
2008. Year over year, the index grew by 0.2%,
the first such increase in almost two years. Six
of the 10 components that make up the index
improved in July. The largest positive

contributors in July were the steepening yield
curve, increase of the average work week,
and a reduction of initial jobless benefits.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), were unchanged
in July. Year over year, the CPI is down by
(1.9)%, the largest price decline since January
1950. The core CPI, which excludes food and
energy prices, increased by 0.1% in July. The
corresponding year-over-year increase was
1.6%, the lowest rate of core inflation in more
than 5 years.
The Semiconductor Industry Association (SIA)
reported that Semiconductor Billings (3-month
moving average) in the U.S. increased by 4.8%
between May and June, from $2.77 billion to
$2.91 billion. June marked the fourth
consecutive month with month-over-month
increases in semiconductor sales. Despite this
improvement, sales in June were still close to
25% below pre-recession levels.
ARIZONA
While there are signs that the national
economy may be starting to emerge from the
longest and deepest recession in postwar
history, Arizona’s economy may have not yet
reached bottom.
This is suggested by a relatively new set of
indexes developed by the Federal Reserve
Bank of Philadelphia, known as “state
coincident indexes.” The index combines four
state-level indicators to summarize current
economic conditions into a single statistic for
each of the 50 states in the nation. The
measures included in the coincident index are:

JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

Economic Indicators
nonfarm payroll employment, average hours
worked in manufacturing, unemployment rate,
and inflation-adjusted wage and salary
disbursements. For comparison purposes, the
fed has also developed a national coincident
index, which closely tracks the peaks and
troughs of the national business cycle, as
determined by the National Bureau of
Economic Research (NBER).
“Since the onset
of the national
recession in
December of
2007, the state
has shed
(335,000) jobs, or
(12.3)% of its
workforce”.

The state coincident index is designed to track
the business cycles of individual states, and as
such it allows for a comparison among states
with respect to both the timing and severity of
state recessions. The Fed uses the following
criteria to define recessions at the state level:
(1) the cumulative decline of the index must
be at least 0.5% and (2) the period from the
state index’s peak to its trough must be at least
3 months.
Under the fed’s definition of a state recession,
Arizona has only experienced one recession in
the last 30 years that was more severe than the
national recession, namely the 1981/82
recession. The other 3 recessions over the last 3
decades (1980, 1990/91, and 2001 recessions)
were either milder or comparable in terms of
depth and duration.
The coincident index also suggests that Arizona
entered its current recession in August 2007, or
about 4 months ahead of the national
recession, as defined by NBER. Since this time,
the Arizona state coincident index has fallen
by (10.7)% compared to (3.5)% for the nation
as a whole. The steepest decline prior to the
current recession occurred during the 1981/82
recession when the Arizona coincident index
decreased by (2.4)%. According to the index,
only 9 other states have experienced a steeper
decline in the current business cycle. Oregon
and Michigan are on the top of this list with
declines in the index of (23.3)% and (22.6)%,
respectively. North Dakota appears to be the
only state in the nation that has escaped the
recession thus far.
The graph of the Arizona coincident index
below shows that this measure reached its
peak half way through CY 2007, or for
budgetary purposes, around the end of FY
2007. This also coincides with the time when
General Fund revenues peaked. The decline
in revenues since this time has also matched
the decline in the coincident index. Thus, this
index can serve as proxy for gauging not only
the state of the economy but also the
collection of state tax revenues.

(Continued)

Arizona Coincident Economic Activity Index
230
225
(July 1992 = 100)

6

220
215
210
205
200
Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

The July reading of the Arizona coincident
index shows a month-over-month decline of
(0.6)% and year-over-year decrease of (8.1)%.
By way of comparison, 15 other states
recorded either no change in the index or a
slight increase in July. This suggests that
Arizona is still mired in a recession when many
other states appear to be entering the
recovery phase of the next business cycle.
The most recent employment data released by
the Arizona Department of Commerce shows
that nonfarm payroll employment in July
declined by (1.1)% from the prior month.
Compared to July 2008, nonfarm payroll
employment has fallen by (7.7)%. The only
larger year-over-year decline was recorded in
December 1945 when the state’s payroll
employment decreased by (8.2)%.
According to the federal Bureau of Labor
Statistics (BLS), Arizona suffered the nation’s
largest year-over-year job loss (in percentage
terms) in July. Since the onset of the national
recession in December of 2007, the state has
shed (335,000) jobs, or (12.3)% of its workforce.
The corresponding decline at the national level
is less than half of Arizona’s, or (5.6)%.
In June the construction sector broke a string of
21 months of consecutive job losses and thus
offered hope that the bottom of this industry
had been reached. The release of July
employment data dashed such hope as the
industry saw the return of further job losses.
Specifically, the construction sector shrank by
(1.9)%, or 2,700 jobs, compared to the prior
month. The industry now employs fewer
workers than at any time since May 1997.
The July report shows that job losses in the
manufacturing sector have been accelerating
over the last 3 months. Instead of monthly
declines of (0.5)% or less, as previously
observed, the pace of job losses since May has

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JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

Economic Indicators

(Continued)

increased to more than (1.0)%. The July
month-over-month decline of (1.4)% was the
fourth largest on record (data is available from
January 1960). Manufacturing employment in
the state was 160,800 in July, the same level as
in October 1983. At that time, the
manufacturing sector employed 14.4% of the
Arizona workforce compared to 6.8% today.

1.1% between May (103.56) and June(104.73).
The index, however, has fallen (53.9)% from its
all time high and is currently at levels last seen
in July and August 2000. The 20 metropolitan
area index, which includes Phoenix, increased
for the second straight month to 206.52. The
20 metropolitan area index is down (31.3)%
from its peak in July 2006.

The Department of Commerce reported that
38,827 initial claims for unemployment
insurance were filed in July, an increase of
45.2% over last year. Year-over-year increases
in new claims have tapered off somewhat
over the last few months. However, some or
all of that improvement may be due to a
reported back-log of claims. For the week
ending on August 8, more than 114,000
Arizona residents filed continued claims for
jobless benefits.

While an economic downturn tends to
adversely affect state revenue collections, it is
also often accompanied by increased state
spending related to health and welfare as
evident from the caseload data presented
below.

Based on data released by the U.S. Census
Bureau, an average of 1,604 building permits
were issued each month between May and
July 2009. This amount includes an average
of 1,485 single-family residential building
permits authorized and 119 multi-family
permits. In percentage terms, the 1,271
single-family permits represent an increase of
16.9% above the prior month but a decrease
of (23.7)% over the same period a year ago.
In the multi-family segment, however, the
average of 119 permits authorized, was nearly
all driven by permitting activity in July, where
the number of permits issued totaled 335,
significantly higher than the number issued in
May (8) and June (14). Despite this jump,
year-over-year , multi-family permitting
activity is down (83.5).
Utilizing the most recent MLS data available, it
is estimated that the month’s supply of
housing in July was 5.5 months. Stated
differently, at the current rate of existing
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 July 2008 was 10.3
months. The measure reached a high of 16.7
months in September 2007.
The S&P/Case-Shiller Home Price Index
measures the change in housing prices based
on repeat sales. For the first time since the
index for the Phoenix metropolitan area
peaked in June 2006 (227.42), the monthover-month change in the index in Phoenix
increased. Specifically, the index increased

In August, AHCCCS caseloads increased to a
total of 1,301,848 members, 2.1% above the
number of recipients in July 2009. At current
levels, AHCCCS caseloads are 16.4% above
August 2008 levels. The FY 2010 budget funded
a projected caseload growth of 10.7%, or a
total of 1,388,147 members.
There were a reported 83,298 TANF recipients
in the state in June, which represented a
month-over-month caseload decline of
(1.3)% but a year-over-year increase of 8.9%.
The FY 2010 budget assumed that the TANF
caseload would be flat.
The Supplemental Nutrition Assistance
Program (SNAP), formerly known as Food
Stamps, provides assistance to low-income
households to purchase food. In June, there
were a total 894,600 food stamp recipients in
the state, an increase of 3.0% over the prior
month. Compared to the same month last
year, food stamp participation was up by
33.3%. The number of food stamp recipients
began increasing steadily in July 2007, after
several years in the 550,000 – 575,000 range.
Between May and July, the Department of
Correction’s (ADC) inmate population
increased by an average of 126 inmates per
month. In FY 2010, the department received
funding for inmate growth of 4.5%, equivalent
to a net increase of 1,812 inmates, or 151
inmates per month. In FY 2009, the ADC
inmate population grew by 3.9%, or 1,515
inmates. (Hans Olofsson, Martin Lorenzo)

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JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 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
Townhouse/Condominium
- Greater Phoenix Median Home Sales Price
Single-Family
Townhouse/Condominium
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)
- Arizona Consumer Confidence Index (1985 = 100)
- Arizona Coincident Index (July 1992 = 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

July
July
July
July
July
July
May-July
May-July

9.2%
38,827
2.38 million
160,800
138,700
39.3
$41.9 million
$135.8 million

0.5%
0.2%
(1.1)%
(1.4)%
(1.9)%
(0.3)%
(0.9)%
(2.1)%

3.5%
45.2%
(7.7)%
(7.9)%
(27.7)%
(2.7)%
(38.8)%
(12.2)%

May-July
May-July

1,485
119

16.9%
981.8%

(23.7)%
(83.5)%

June
June

11,820
1,390

18.4%
28.1%

50.8%
62.6%

June
June
June
July
June
May

$140,000
$110,000
104.73
5.5 months
3.2 million
$6.16

1ST Quarter 2009
July
1ST Quarter 2009
July 1, 2008
August
June
June
May-Jul

44.2
200.46
$211.5 billion
6.50 million
1,301,848
83,298
894,600
40,440

N/A
(0.6)%
(0.7)%
146,759
2.1%
(1.3)%
3.0%
126 inmates

(58.4)%
(8.1)%
(0.6)%
2.3%
16.4%
8.9%
33.3%
1,574 inmates

2nd Quarter 2009

$12.9 trillion

(1.0)%

(3.9)%

August
July
Apr-Jun
July

54.1
101.6
$2.91 billion
214.47

14.1%
0.6%
4.8%
0.0%

(7.5)%
0.2%
(14.5)%
(1.9)%

3.7%
(4.3)%
1.1%
(0.4) months
(0.1)%
23.0%

(28.1)%
(27.5)%
(31.6)%
(4.8) months
(7.1)%
(37.9)%

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

Summary of Recent Agency Reports
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. Highlights of the
report, as of July 31, 2009, are as
follows:
•

•

ADC has 4,521 inmates
assigned to 5 in-state facilities
that have a combined
capacity of 4,544 permanent
(3,850) and temporary (694)
beds. This total includes a
temporary increase of 80 beds
at the Central Arizona
Correction Facility.
ADC initiated a cost savings
effort and returned 363 inmates
back to Arizona from out-ofstate facilities. In total, 4,529
beds of 4,892 funded beds
were being utilized. The 4,529
beds include:
o 2,054 beds of 2,160 funded
beds were filled at the
Diamondback Facility in
Oklahoma;
o 1,799 beds of 1,980 funded
beds were utilized at the
Great Plains Facility in
Oklahoma;
o 676 beds of 752 funded beds
were occupied at the
Huerfano County Facility in
Colorado.

Arizona Historical Society – Report
on Non-Appropriated Expenditures
– Pursuant to A.R.S. § 41-821E, the
Arizona Historical Society is required
to report on non-appropriated fund
expenditures for the society. Nonappropriated expenditures for FY
2009 were $1,002,300, an increase
of $145,800 above the FY 2008 total
of $856,500. (Caitlin Acker)
Arizona State Lottery Commission –
Report on Performance Incentive
Plan – Pursuant to A.R.S. § 5-507B,
the Arizona State Lottery
Commission submitted an annual
report on their performance

incentive plan. Laws 2008, Chapter
287, Section 38 appropriated
$750,000 from the State Lottery Fund
in FY 2009 for an agencywide
performance based compensation
plan.
The Arizona State Lottery
Commission reports that due to the
uncertainty and potential reduction
to their budget appropriation, the
performance incentive plan was
not implemented in FY 2009.
However, of the $750,000 appropriation, the Arizona State Lottery
Commission expended $21,250 to
outsource the development of a
strategy to implement, administer
and measure the impact of a
performance incentive plan. The
remaining balance of $728,750 was
returned as operational savings and
became part of Lottery’s profit
distribution to fund beneficiaries.
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 fourth
quarter of FY 2009, DPS had spent or
encumbered $8.8 million of the $9.4
million appropriation for the direct
DPS immigration staff. In terms of
local law enforcement grants, DPS
spent $58,700 of the FY 2009 $4.1
million appropriation and the
remaining $9.7 million in non-lapsing
FY 2008 monies. The $4.0 million in
unspent FY 2009 local grants
remains available through FY 2010.
(Kim Cordes-Sween)
Department of Water Resources –
Report on Fees Collections in the
Assured and Adequate Water
Supply Fund – Pursuant to a FY 2008
General Appropriation Act
footnote, the Department of Water
Resources (DWR) has submitted the
amount of fees collected by the
Assured and Adequate Water

Supply (AAWS) program. The AAWS
Administration Fund consists of
monies that are paid to DWR for
applications related to assured and
adequate water supplies. DWR
reports the total revenue for FY 2009
amounted to approximately
$285,200. This amount is $(293,900),
or (51)% below total collections in
FY 2008. (Leah Kritzer)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – AUGUST 2009

State of Arizona
General Fund Revenue:

Change from Previous Year and Budget Forecast
July 2009
Current Month

FY 2010 YTD (One Month)

Change From
July 2008

Actual
July 2009

Percent

Amount

Change from
Forecast
Percent

Amount

July 2008

Actual
July 2009

Forecast
Percent

Amount

Percent

Amount

Taxes
Sales and Use

290,628,634

($65,625,084)

Income - Individual

234,779,284

(30,581,606)

(11.5)

(29,143,304)

33,640,711

10,345,933

44.4

11,082,711

169,202

1,335

0.8

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

(18.4) %

($22,915,329)

(51,798)

$290,628,634

($65,625,084)

(11.0)

(7.3) %

234,779,284

(30,581,606)

(11.5)

(29,143,304)

49.1

33,640,711

10,345,933

44.4

11,082,711

169,202

1,335

0.8

(23.4)

(18.4) %

($22,915,329)

(51,798)

2,692,000

77,975

3.0

0

0.0

2,692,000

77,975

3.0

0

2,600,000

(28,644)

(1.1)

0

0.0

2,600,000

(28,644)

(1.1)

0

41,880,188

(220,126)

(0.5)

(6.1)

41,880,188

(220,126)

(0.5)

0

(3,048)

(100.0)

59,881
$606,449,900

3,039
($86,030,226)

5.3
(12.4) %

(2,704,812)
0
7,381
($43,725,151)

-14.1
(6.7) %

0
59,881
$606,449,900

(3,048) (100.0)
3,039
($86,030,226)

5.3
(12.4) %

(2,704,812)
0
7,381
($43,725,151)

(7.3) %
(11.0)
49.1
(23.4)
0.0
0.0
(6.1)
-14.1
(6.7) %

Other Revenue
Lottery
License, Fees and Permits
Interest

0

0

2,508,604

608,226

(455)

114,429

0
373,604

--

1,746,223

83.3

3,666,711

1,280,930

0

0

--

0

11,315,439

10,423,321

--

8,915,439

1,280,930
0

--

0

11,315,439

10,423,321

--

8,915,439

19,236,522
$625,686,422

12,247,222
($73,783,004)

53.7

175.2 %
(10.5) %

1,666,711

10,711,522
($33,013,629)

-371.5
125.6 %

19,236,522

(5.0) %

$625,686,422

114,429

0
373,604

(12.3)

0

(455)

-32.0

(455)

3,666,711

TOTAL BASE REVENUE

0
608,226

(243,777)

Other Miscellaneous

Sub-Total Other Revenue

0
2,508,604

--

1,746,223

Transfers and Reimbursements

-17.5

(9.3)

Sales and Services
Disproportionate Share

(179,684)

-32.0

(179,684)

12,247,222
($73,783,004)

-17.5

--

(455)

--

(9.3)

(243,777)

(12.3)

53.7

175.2 %
(10.5) %

1,666,711

10,711,522
($33,013,629)

83.3
-371.5
125.6 %
(5.0) %

Other Adjustments
Urban Revenue Sharing

(52,387,052)

8,252,731

--

0

0.0

(52,387,052)

8,252,731

--

0

0.0

Sub-Total Other Adjustments

(52,387,052)

8,252,731

-- %

0

0.0 %

(52,387,052)

8,252,731

-- %

0

0.0 %

TOTAL REVENUE

$573,299,370

($65,530,273)

(10.3) %

($33,013,629)

(5.4) %

$573,299,370

($65,530,273)

(10.3) %

($33,013,629)

(5.4) %