JLBC - Monthly Fiscal Highlights

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

Summary
The state’s fiscal year ended on June 30th.
While the books are still not closed on FY 2010,
we can draw several preliminary conclusions
from the data:

• General Fund base revenues declined by

•
www.azleg.gov/jlbc.htm

“The budgeted

•

balance of $48
million appears

•

sufficient to offset
the revenue
shortfall, which
will allow the
state to end
FY 2010 with a
positive cash

July 2010

•

(10.3)% during the course of FY 2010, which
represented an unprecedented 3rd
consecutive year of General Fund losses.
After positive revenue months in April and
May, June base revenues fell (5.8)% below
last year.
Base revenues were supplemented by
one-time proceeds from the state asset
sale/leaseback and other financing. After
accounting for these one-time monies,
FY 2010 total revenues equal $8.3 billion, or
0.9% above FY 2009.
After having experienced a $(480) million
cash shortfall at the end of FY 2009, the
General Fund will likely be positive at the
end of FY 2010.
Due to a recent modification in the K-12
payment schedule, the state appears to
have sufficient funds to pay its bills from
the operating fund through at least the first
half of FY 2011.
Based on the preliminary FY 2010 results,
the projected FY 2011 budget shortfall has
been updated to between $0 and $(1.0)
billion. The actual magnitude will depend
on Congressional action to enact the
enhanced Medicaid match rate, the
outcome of 2 November ballot
propositions, the magnitude of a potential
K-12 shortfall, and a potential revenue
shortfall. The updated projection of the
FY 2012 shortfall is $(1.1) billion.

balance.”

• The state’s bond rating was reduced in
July as concerns remain about the
structural deficit. The rating agency,
however, changed the state’s credit
outlook from “negative” to “stable”.

These issues are also summarized in a Budget
Status Update slideshow presentation on the
JLBC website.
In addition to its regular features, this edition
of the MFH provides a summary of the federal
government’s new high risk health insurance
pool, which is scheduled to begin operation
in August. In addition, the JLBC Staff has
compiled a comprehensive listing of the $12.5
billion in solutions used to eliminate the FY
2008 - FY 2011 budget shortfalls (see page 13).
FY 2010 Ending Balance
While FY 2010 ended on June 30th, the state's
books do not officially close until July 30th.
Even at that point, it will take several weeks to
confirm the final numbers for the year. The
FY 2011 budget assumed a FY 2010 ending
balance of $48 million. As of now, revenues
are projected to be below forecast and
spending appears to be near budgeted
levels. The budgeted balance of $48 million
appears sufficient to offset the revenue
shortfall, which will allow the state to end
FY 2010 with a positive cash balance.
Based on preliminary June data, FY 2010
revenues equaled $8.3 billion (see page 7).
This amount is $(27.1) million below forecast.
Base revenues without one-time adjustments
were actually $(68.4) million below forecast.
The state generated $41.3 million more than

Table of Contents
Summary
• FY 2010 Ending Balance……………..…............ 1
• State Overnight Borrowing……………..… ....... 2
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
July 28, 2010.

• Potential FY 2011 Shortfall……………..… ......... 3
• FY 2012 – 2014 Projections……………..…......... 4
• State Debt Rating……………..…....................... 4

June Revenues........................................................ 5
Economic Indicators .............................................. 8

Summary of Recent Agency Reports
• AHCCCS – Healthcare Group........................ 12
• DES – Coolidge Placements .......................... 12
• ADE – English Learner Federal Monies .......... 12
• Public Programs Eligibility Report ................... 12
Staff Updates
• Comprehensive Budget Solutions.................. 13
• High Risk Insurance Pools ................................ 13

June Spending ...................................................... 14

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Summary

(continued)

Table 1

June
Year-to-Date

General Fund Revenues ($ in Millions)
FY 2010
Difference From
Difference
Collections
Budget Forecast
From FY 2009
$ 1,715.0
$ (34.3)
$ 305.9
$ 8,319.1
$ (27.1)
$ 71.5

expected in one-time revenue, however,
primarily due to shortening the time period for
unclaimed property.
While below forecast, revenues did not fall as
much as expected. In April, JLBC Staff
projected collections could fall $(200) million
short.
“[The state’s]
revised payment
schedule is
expected to
keep the
operating fund
balance positive
through at least
the first half of
the fiscal year.”

State spending appears on target at the
budgeted level of $7.8 billion (see page 14).
While the state collected $8.3 billion in
revenues, $480 million of that amount will pay
off the FY 2009 shortfall. Once that
adjustment is made, FY 2010 revenues are
approximately equal to spending. The state's
ending balance could be between $0 and
$48 million based on the preliminary June
data.
State Overnight Borrowing
As opposed to the cash balance, the
operating fund balance at the end of FY 2010
is approximately $1.5 billion. The cash
balance reflects General Fund revenues
minus General Fund spending on a fiscal year
basis. In contrast, the state pays its bills out of
the operating fund balance, which consists of
General Fund monies and certain dedicated
funds.
As expected, the operating balance grew
rapidly at the end of the year as the various
one-time financing mechanisms, such as
lottery bonds, were deposited into the
General Fund and state expenditures were
deferred from FY 2010 to FY 2011. In addition,
state agencies moved some of their nonGeneral Fund monies into the operating fund
at the end of the fiscal year.
As quickly as the operating fund balance
grew, it declined as the fiscal year began. As
of mid-July, the operating fund has already
declined to $1.1 billion. Given that deferred
rollover payments have to be made in the 1st
quarter, the Treasurer and the General
Accounting Office (GAO) had been
forecasting that the operating fund would be
negative again in either September or
October.

As we noted in an earlier MFH, the State Loan
Commission has not taken action to extend
the state’s $700 million outside bank loan to
cover any operating fund shortfalls. To
address this lack of an outside bank loan, the
state has rearranged its payments to school
districts. This revised payment schedule is
expected to keep the operating fund
balance positive through at least the first half
of the fiscal year.
The FY 2010 budget deferred $953 million of
state aid payments to school districts. The
Executive implemented this provision by
deferring a portion of the April payment,
along with the entire May and June
payments.
To aid cash flow, the Executive has
developed a revised FY 2011 payment
schedule and will defer state aid payments to
school districts in September and November
(as opposed to April - June) until next fiscal
year. To summarize, the payment schedule in
the upcoming several months will be as
follows:
•

•
•

Districts will receive $953 million in state aid
payment deferred from FY 2010 by the
end of August (of this amount, $350 million
has already been received).
Scheduled state aid payments of
approximately $250 million will go out to
districts in both August and October.
The scheduled September and November
state aid payments will be deferred until
July/August of FY 2012.

The revised state aid payment schedule is not
expected to affect school operations as
districts will receive 33% of their annual
funding prior to September. In addition, in
lieu of the November payment, districts will
receive their regularly scheduled twice yearly
property tax distribution in mid-November,
which is approximately $1.2 billion statewide.
The possible exception is a few of the smallest
school districts, which may be affected by the
revised state aid payment schedule. These
smaller districts are being monitored for any
adverse cash flow impacts.

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JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Summary

“The estimated
[FY 2011] shortfall
is now between
$0 and $(1.0)
billion depending
on Congressional
action, the fate of
2 November
ballot
propositions, the
action plan for a
potential K-12
shortfall, and a
potential revenue
shortfall.”

(continued)

Without the bank contract, the state will utilize
its internal funds if the operating fund has
insufficient funds to pay state obligations. This
method was used prior to the outside bank
contract. These internal funds, known as
“Pool 3”, consist of interest earning funds, the
largest of which are: the Early Childhood
Development and Health Fund, the Parks
Board’s Land Conservation Fund, the Heritage
Fund, and the DES Long Term Care System
Fund.

•

Pool 3 funds are invested in Treasurer’s
Warrant Notes (TWNs), which are short-term
overnight investments that give the Treasurer
additional funds to pay state obligations. The
State Loan Commission sets the maximum
interest rate for TWNs, and approves overnight
borrowing agreements. The typical borrowing
capacity of Pool 3 is 50% of the fund’s current
balance. Because Pool 3’s balance is
currently estimated at $1 billion, the state’s
internal overnight borrowing capacity is $500
million.
While there is currently no projected need to
use Pool 3 through at least the first half of
FY 2011, the Commission would have to meet
to set the interest rate before these funds
could be utilized.
Potential FY 2011 Shortfall
The JLBC Staff previously estimated that the
FY 2011 budget could have a shortfall of
between $(400) million to $(1.2) billion. With
stronger than expected 4th quarter revenues,
the shortfall estimate has now improved
slightly.
The estimated shortfall is now between $0 and
$(1.0) billion depending on Congressional
action, the fate of 2 November ballot
propositions, the action plan for a potential
K-12 shortfall, and a potential revenue
shortfall. The possible problems are as follows:
•

•

$394 million - No extended enhanced
federal Medicaid match rate. Contingent
upon Congressional approval, these extra
federal funds would help pay for the
continuation of AHCCCS’ Proposition 204
program through the end of FY 2011. As of
this writing, Congress has yet to approve
these funds.
$469 million - Possible failure of the
November ballot propositions concerning
the Early Childhood Development and
Health Board and the Land Conservation
Fund. These 2 ballot propositions would:

•

1) Repeal the Early Childhood
Development and Health Board and
transfer the remaining fund balance to the
General Fund and shift the ongoing
tobacco tax revenues to the General
Fund for health and human services for
children; 2) Transfer any unexpended
monies in the Land Conservation Fund to
the General Fund.
$100 million - Potential K-12 Shortfall. The
Arizona Department of Education (ADE)
recently reported an estimated $(70)
million shortfall for FY 2010. ADE partially
addressed this situation by pulling forward
into FY 2010 approximately $49 million in
federal “stimulus” monies originally
budgeted for FY 2011. The remaining $21
million represents unpaid “Homeowner’s
Rebate” funding for FY 2010. If the latter
amount was paid in FY 2011, ADE may
have a potential shortfall of up to $100
million in FY 2011 depending on how the
Legislature addresses the following: 1) $49
million in federal “stimulus” monies used
early, and 2) the $30 million of the FY 2010
shortfall that is expected to be recurring in
nature.
$0 to $130 million - Potential revenue
shortfall. While 4th quarter revenue growth
was stronger than expected, the state
may not achieve its budgeted FY 2011
revenue levels. The April forecast
predicted a (1.0)% decline in 4th quarter
FY 2010 revenues. Instead, FY 2010
revenue grew by 1.0%. While this change
was encouraging, FY 2010 revenues still
ended up $(68.4) million below forecast.
Due to lower than forecasted FY 2010
base revenues, FY 2011 revenue levels
would need to grow by 5.3% to reach the
budgeted levels. This is higher than the
originally budgeted increase of 4.2%. At its
April meeting, the FAC consensus forecast
estimated base revenues to grow 3.4% in
FY 2011.
Due to the recent mixed economic news,
there are concerns about the State
achieving the budgeted revenue growth.
April and May revenues broke a streak of
30 consecutive months with losses in
revenues compared to the prior year, but
June revenues turned negative again. In
addition, economic policymakers have
raised concerns about the economic
recovery, with the Federal Reserve
Chairman stating the U.S economic
outlook is “unusually uncertain”.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Summary

(continued)

If revenues were to be in line with the FAC
forecast, the FY 2011 shortfall would
increase by $130 million.
The potential problems discussed above would
be offset by the budgeted FY 2011 ending
balance of $63.2 million, leaving the state with
a potential shortfall of $0 to $(1.0) billion.

“The JLBC
Staff now
estimates the FY
2012 baseline
budget shortfall
at $(1.1) billion
and FY 2014 at
$(2.0) billion.”

FY 2012 - FY 2014 Projections
Along with FY 2011, the JLBC Staff has also
revised its FY 2012 - FY 2014 baseline
estimates. The baseline compares projected
revenue collections to funding formula
expenditures. The JLBC Staff Report - LongTerm Budget Projections forecasted a FY 2012
shortfall of over $(800) million that would grow
to $(1.0) billion with the expiration of the 1
cent sales tax increase in FY 2014.
The JLBC Staff now estimates the FY 2012
baseline budget shortfall at $(1.1) billion and
FY 2014 at $(2.0) billion. These estimates are
up from the April report due to a decline in
the long-term revenue projection. While the
FY 2010 revenue shortfall was less than
anticipated, April's long term revenue
estimates appear to be overstated.
The April revenue estimates were based on
the 4-sector consensus forecast from the
Finance Advisory Committee (FAC) meeting.
That forecast had strong revenue growth of
9.6% in FY 2012 that tapered off to 7.5% by FY
2014. Given the slow pace of the economic
recovery, however, those estimates appear
optimistic, especially for FY 2012.
As with the FY 2011 estimates, the 4-sector
consensus for FY 2012 – FY 2014 will next be
updated at the September FAC meeting. In
anticipation of the growth rate being lowered
in September, revenue growth has now been
reestimated at 5% annually through 2014.
The baseline spending projections of funding
formula requirements essentially remain the
same as in the April analysis. If the FY 2011
budget modified these requirements, the
estimates assume the continuation of these
changes through FY 2014. For example, the
long-term projections continue the FY 2011
budget policy of little or no inflation funding.
As noted in the April report, the ability to
sustain this policy is uncertain.
These estimates assume the state continues
General Fund support for the Proposition 204
program. The FY 2011 budget originally
ended General Fund support of Proposition

204 beginning January 1, 2011. After passage
of the state budget, the federal government
enacted major modifications to the nation's
health care system. The federal legislation
has a maintenance of effort (MOE)
provision which appears to require Arizona to
retain its low-income Proposition 204 health
care program or risk losing its $7 billion in
federal matching funds for all Medicaid
programs.
Subsequent to passage of the federal health
care legislation, the state restored Proposition
204 funding for the remainder of FY 2011
conditional upon the extension of the
enhanced federal Medicaid match rate. At
the time, Congress was actively considering
such a proposal. The higher federal match
rate essentially generates enough savings to
pay for another 6 months of the Proposition
204 program through the end of FY 2011. As
noted earlier, however, Congress has not yet
approved this extension. The latest U.S.
Senate proposal would scale back this
assistance by 40%.
If Congress does not act, continuation of the
Proposition 204 program would require a
legislative appropriation. If the Proposition 204
program were discontinued, the projected
$(1.1) billion FY 2012 budget shortfall would
decline by $(750) million pending state
decisions on how to address the loss of federal
matching funds for the rest of the AHCCCS
program.
State Debt Rating
On July 15th, Moody’s Investor Services
lowered Arizona’s rating for General Fund
backed issuances from Aa3 to A1, the 5th
highest of 10 investment grade levels. The
state is also assigned an overall credit rating,
including non-General Fund obligations. This
rating was also downgraded one level, and
now sits at Aa3.
The state already had its General Fund rating
reduced from Aa3 to A1 in December 2009.
Moody's then raised the rating back to Aa3 as
part of a general recalibration to a different
rating scale.
Along with a rating, the credit agency also
provided an outlook in terms of the future
direction of rating changes. Since September
2009, Moody's outlook for the state has been
negative. With this recent downgrade,
Moody's has changed their outlook to stable.
In downgrading the state, Moody's continues

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Summary

(continued)

to express the same concerns about the
state's fiscal policies as in the past, including:
•
•

Limited financial flexibility due to
constitutional limits on raising revenue
and reducing spending.
Structural budget imbalances and a
reliance on one-time budget solutions.

•
•
•

Continued economic difficulties related
to the slowdown in the housing sector.
Significant revenue declines in the past
several fiscal years.
Liquidity concerns which have caused
the need for short-term borrowing.

June Revenues

“The overall 3year [sales tax]
loss is (25.1)%.
Prior to the last 3
years, sales tax
collections had
not declined on
an annual basis
since 1981, when
the sales tax on
food was
eliminated.”

Sales Tax collections were $242.7 million in
June. Prior to the change in the estimated
payment threshold (discussed below), these
“base” collections were down (5.1)% compared to last June and were $(37.9) million
below the forecast. As noted last month, April
and May collections were about equal to April
and May of the prior year, breaking a trend of
26 consecutive months of declines.
For the entire fiscal year, base sales tax
revenues are down (10.1)% compared to last
year. FY 2010 marks the third consecutive year
of sales tax declines. The overall 3-year loss is
(25.1)%. Prior to the last 3 years, sales tax
collections had not declined on an annual
basis since 1981, when the sales tax on food
was eliminated.
Table 2 displays the June growth rates for the
largest categories.
Table 2

June
(3.4)%
(27.2)%
1.1%
44.5%
3.2%

The March budget legislation reduced the
liability threshold for making estimated
payments from $1 million to $100,000 for
FY 2010 through FY 2013. The budget assumed
this would generate $48 million, while actual
collections are estimated at $45 million.
Excluding revenue from the lower threshold,
however, estimated payments were $(19)
million lower than in June 2009. This makes the
third year in a row that June declines were
further worsened by the estimated payment
factor.
After accounting for the additional estimated
payment revenues, FY 2010 sales tax revenues
fell (8.9)% compared to FY 2009.

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Utilities
Use
Restaurant & Bar

payment based on actual collections in May
or June. This payment is then credited against
July tax liabilities. 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.

YTD
(7.0)%
(37.5)%
0.5%
(7.2)%
(0.8)%

As noted in previous months, retail and
contracting together account for about 30% of
all sales tax revenues. Contracting continued
its poor performance, with a (27.2)% decrease
compared to June of last year, while the retail
category fell by (3.4)%.
While retail and contracting activity explains a
portion of the sales tax drop, estimated
payments also played a role. In June, larger
retailers are required to make an estimated

With the passage of Proposition 100 in May, the
sales tax rate increased by 1% in June. The
impact of the tax increase will essentially begin
with the July collections.
Individual Income Tax net revenues were
$270.5 million in June. Collections were $(9.4)
million below the forecast.
As indicated in Table 3 below, withholding tax
payments decreased by (2.5)% in June, after 4
consecutive months of increases. For the fiscal
year, withholding tax collections are down
(2.3)% from last fiscal year.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

June Revenues
Table 3

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

June
(2.5)%
(3.2)%

YTD
(2.3)%
(21.0)%

0.0%

(8.2)%

For the fiscal year, total individual income tax
collections were $(151.5) million, or (5.9)%
below last fiscal year. Decreases in
withholding tax collections and payments
were partially offset by decreased refunds.
“Over the last 3
years, corporate
income tax
collections have
declined
(47.3)%, and
have reached
the lowest level
since FY 2003.”

As with sales tax, individual income tax
collections have declined for 3 consecutive
years. The 3-year loss is (35.5)%.
Corporate Income Tax net collections were
$90.5 million in June. This amount was (6.2)%
below June 2009, but $13.5 million above the
forecast for the month.
For the fiscal year, corporate collections of
$413.2 million are (30.2)% below last year. This
amount is $31.8 million above the budget
forecast for the year.
Over the last 3 years, corporate income tax
collections have declined (47.3)%, and have
reached the lowest level since FY 2003.
The Lottery Commission reports that June
ticket sales were $44.3 million, which is 15.9%
above sales last year. Total FY 2010 ticket
sales were $67 million or 13.8% above FY 2009.
For FY 2010, $46.6 million in revenue has been
distributed to the General Fund. This
distribution was $4.8 million, or 11.5% above
the budgeted distribution for FY 2010 and
$15.6 million, or 50.5% above FY 2009.
As we have noted in previous months, it
appears that sales have increased at a
greater rate than distributions as prize payouts
have increased (which reduces payments to
state beneficiaries).
Disproportionate Share (DSH) revenue
represents supplementary federal payments
to hospitals that serve a large, or
disproportionate, number of low-income
patients. The $18.7 million amount reflects

DSH payments to the Arizona State Hospital
that are deposited to the General Fund to
offset its operating expenses.
Most DSH monies generated by Maricopa
Integrated Health System (MIHS) are also
deposited into the General Fund pursuant to
statute. At this time, the FY 2010 payments do
not include any of the $50.4 million in
budgeted MIHS revenues. The MIHS
allocation is still being determined, but will be
less than the FY 2010 budgeted amount due
to a decline in uncompensated care.
If the final determination of the FY 2010
payment is made in the next several days,
some additional General Fund revenue could
still be booked in FY 2010. If this issue is not
resolved soon, these monies will be deposited
into the General Fund in FY 2011.
Revenues related to budget legislation
totaled $176.2 million for FY 2010, all of which
was collected in June. This amount was $41.3
million, or 30.6% above forecast.
Laws 2009, 4th Special Session, Chapter 3
accelerated the abandonment schedule for
certain types of unclaimed property by 1-3
years. For many types of abandoned
property, the state will now receive possession
after 2 years. The provisions of Chapter 3
were expected to generate additional onetime General Fund revenues of $39.4 million in
FY 2010. Based on preliminary numbers from
the Department of Revenue, the accelerated
abandonment schedule resulted in
significantly more revenue than anticipated,
with collections totaling an estimated $83.7
million, or $44.3 million more than budgeted.
The $41.3 million of revenue collected above
the forecast consists of the $44.3 million
related to unclaimed property along with
$(3.0) million due to a technical adjustment
related to sales tax estimated payments.
In June, leaseback proceeds totaled $750
million. These revenues were received from 2
issuances: 1)$300 million related to the sale
and leaseback of state properties (above
and beyond the $735 million originally
authorized); and 2)$450 million from the sale
of lottery revenue bonds. Total FY 2010
leaseback proceeds were $1.5 billion.

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

June Revenues
HURF collections of $102.6 million in June were
down $(2.7) million or (2.5)% compared to June
of last year. Total FY 2010 HURF collections of
$1.19 billion were down $(54.2) million or (4.3)%
compared to FY 2009.

Highway User Revenue Fund (HURF) revenues
consist of gasoline and use fuel (diesel) tax,
motor carrier fees (commercial carriers),
vehicle license tax and registration fees, and
various other fees.

Table 4

State of Arizona
General Fund Revenue:
Change from Previous Year and Enacted Budget Forecast
June 2010

Current Month

FY 2010 YTD (Twelve Months)

Change From
Actual

June 2009

June 2010

Amount

Change from
Actual

Forecast
Percent

Amount

Percent

June 2009

June 2010

Amount

Forecast
Percent

Amount

Percent

Taxes
Sales and Use
Income - Individual
- Corporate

$242,708,085

($13,023,720)

(13.5) %

$3,377,528,509

($378,878,729)

(10.1) %

($62,623,291)

270,545,462

(8,864,748)

(5.1) %
(3.2)

(9,355,546)

(3.3)

2,416,296,308

(151,458,048)

(5.9)

14,062,708

90,549,750

(5,987,265)

(6.2)

13,505,171

17.5

413,193,307

(178,963,946)

(30.2)

31,832,707

8.3

1,120,166

46.2

20,269,632

2,025,150

11.1

3,269,632

19.2

Property

3,542,939

111,983

3.3

Luxury - Tobacco

3,666,091

1,157,882

46.2

2,630,493

324,303

14.1

- Liquor
Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

71,954,438

(8,756,613)

4,760

4,760

30,510

(7,556)

$685,632,528

($35,040,974)

($37,856,203)

0.6

(0.0)

27,582,135

(2,226,250)

(7.5)

(2,956,665)

(9.7)

0

0.0

28,854,959

(1,067)

(0.0)

(983,541)

(3.3)

(10.8)

2,885,731

4.2

405,107,893

(6,262,960)

(1.5)

--

338,144

(19.8)

2,419

(4.9) %

(118)

(1.8) %

($29,360,236)

-8.6
(4.1) %

7,107,893

363,755

153,383

72.9

363,755

1,446,307

280,540

24.1

816,307

$6,690,642,805

($715,331,927)

(9.7) %

($9,110,495)

1.8
-129.6
(0.1) %

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

15,645,000

15,645,000

--

4,835,400

44.7

46,645,000

15,645,000

50.5

4,797,800

11.5

2,694,107

(1,304,593)

(32.6)

537,435

24.9

26,654,097

(7,877,455)

(22.8)

2,654,097

11.1

7,806

(140,612)

(94.7)

1,182,343

--

472,767

(19,196,682)

(97.6)

472,767

4,089,962

(4,175,590)

(50.5)

(11,487,148)

(73.7)

28,302,557

(19,939,134)

(41.3)

(16,697,443)

-(37.1)

Other Miscellaneous

21,708,956

9,537,936

78.4

9,860,521

83.2

53,276,853

(423,703)

(0.8)

5,753,753

12.1

Disproportionate Share

18,700,000

(30,259,603)

(61.8)

(50,404,900)

(72.9)

18,700,000

(48,987,545)

(72.4)

(50,404,900)

(72.9)

Transfers and Reimbursements
Sub-Total Other Revenue
TOTAL BASE REVENUE

1.7

(5,828,734)

62,926,041

80,210

(10,672,363)

25,099

(14.5) %

45.5

(46,233,501)

(757,152)

(42.4) %

(90.4)

208,381,540

34,330,266

(80,219,645)

559,874

(27.8) %

(59,252,660)

(22.1) %

(14.5)

$748,558,569

($45,713,337)

(5.8) %

($75,593,737)

(9.2) %

$6,899,024,345

($795,551,572)

(10.3) %

($68,363,155)

(1.0) %

Other Adjustments
Urban Revenue Sharing
Budget Plan Transfers

(52,387,052)

8,252,737

--

4,473

(0.0)

(628,644,630)

99,032,775

(86.3)

0

0.0

387,085,500

(893,557,600)

--

41,300,000

30.6

176,178,100

176,178,100

0

0.0

1,485,419,300

1,485,419,300

4.5 %

1,420,038,270

867,072,575

156.8 %

($34,289,264)

(2.0) %

$8,319,062,615

$71,521,003

0.9 %

($27,058,685)

(0.3) %

($5,657,000)

(5.2) %

$1,194,417,000

($54,166,000)

(4.3) %

($53,383,000)

(4.3) %

92,609,775

(582,830,805)

Budget Legislation

176,178,100

176,178,100

Leaseback Proceeds

750,000,000

750,000,000

--

966,400,823

351,600,032

57.2 %

$1,714,959,392

$305,886,695

21.7 %

(2.5) %

Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

41,304,473

--

4,470

(69.8)

0

0.0

--

41,300,000

30.6

--

0
41,304,470

(0.0)

0.0
3.0 %

Non-General Funds
Highway User Revenue Fund

$102,577,000

($2,655,000)

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Economic Indicators
According to the U.S. Department of
Commerce Bureau of Economic Analysis (BEA),
the third and final estimate of the U.S. Real
Gross Domestic Product (GDP) for the first
quarter of 2010 was revised down from 3.0% to
2.7%. The key downward revision was to
consumer spending on services. Economic
growth was even more dependent on the
inventory cycle than previously estimated.
Inventories contributed 1.9 percentage points
to real GDP growth. Final sales were revised
down from 1.4% to 0.8%.

“The state had
(53,100) or (2.2)%
fewer nonfarm
payroll
employees in
June than in the
previous month.”

In July, the Conference Board’s U.S. Consumer
Confidence Index declined to 50.4, down 3.9
points from a revised June level of 54.3. Most
of the decline in consumer sentiments in July
was driven by deteriorating expectations
about the coming 6 months. After having
improved for 4 consecutive months, the index
retreated in both June and July suggesting
that consumers are beginning to lose
confidence in the economic outlook.
Unfavorable perceptions of the job market
were a key factor in July’s decline in consumer
confidence.
The Conference Board’s U.S. Index of Leading
Economic Indicators fell by (0.2)% in June, thus
reversing a portion of May’s 0.5% gain. For the
month of June, a shrinking workweek, shorter
delivery times, and falling stock prices
outweighed the positive contributions from a
rising money supply and the continuation of a
favorable interest rate spread. After the sharp
turnaround that started in April 2009, the index
has remained largely unchanged over the last
4 months, suggesting that the pace of the
economic recovery is slowing.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), decreased by
(0.1)% in June, following declines of (0.1)% and
(0.2)% in April and May, respectively. The drop
in consumer prices is primarily due to falling
energy prices. The core CPI, which excludes
food and energy prices, inched up 0.2% in
June and is now 1.0% above last year’s level.
Core inflation is now much lower than the
Fed’s comfort zone for inflation of 1.5% to 2.0%.
The Semiconductor Industry Association (SIA)
reported that Semiconductor Billings (3-month
moving average) in the U.S. reached $4.27

billion in May, the highest level since February
2001. This was a 8.2% improvement from the
prior month and a 52.9% increase over May
2009 levels. According to SIA, chip sales have
been buoyed by strength in sales of personal
computers, cell phones, corporate information
technology, industrial applications, and autos.
ARIZONA
The Federal Reserve Bank of Philadelphia’s
coincident index gauges current economic
activity in each state. The index combines 4
indicators: employment, average hours
worked in manufacturing, unemployment rate,
and inflation-adjusted wages.
The state coincident index for Arizona
remained unchanged in June, making Arizona
one of only 4 states in the nation for which this
measure did not increase last month. The
index is down by (0.2)% compared to the same
month in the prior year and almost (11)% off its
pre-recession level. As seen in the graph, the
Arizona coincident index reached a trough in
December 2009. See Tracking Arizona’s
Recovery, for additional historical information.
Arizona Coincident Economic Activity Index
230

220
(July 1992 = 100)

NATIONAL

210

200

190
Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Employment
According to latest release of employment
data by Arizona Department of Commerce,
the state had (53,100) or (2.2)% fewer nonfarm
payroll employees in June than in the previous
month. By way of comparison, the average
job loss for June in the 10-year period before
the start of the recession was (1.1)%. The
primary reason that the state typically
experiences a net job loss in June is that this is
the month when most schools start their
summer recess. During this time, some
teachers and most non-teaching staff are not
included in the official employment count.

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Economic Indicators
Some of the workforce reduction in June (15%
of the total, or 8,100 positions) was attributable
to the loss of temporary Census 2010 workers.
A smaller portion (9% of the total, or 4,800
positions) was attributable to the loss of private
sector jobs.

“Year-over-year,
total nonfarm
employment was
down by (0.3)%,
or (7,900) jobs in
June. This
marked the 29th
consecutive
month with yearover-year job
losses in the
state”

Year-over-year, total nonfarm employment
was down by (0.3)%, or (7,900) jobs in June.
This marked the 29th consecutive month with
year-over-year job losses in the state, the
longest streak in recorded history (data
available from 1939). Year-over-year job losses
peaked in June 2009 when there were
reportedly (217,200), or (8.4)%, fewer people
on the payrolls than in the previous year. Since
the onset of the recession in December 2007,
the state has lost (339,300) jobs, or (12.5)% of its
workforce. See Tracking Arizona’s Recovery,
for additional historical information.
The average weekly hours of production
workers in manufacturing industries is a leading
indicator since “factory hours” tend to lead
the business cycle as employers usually adjust
work hours before increasing or decreasing
the size of their workforce. According to the
Arizona Department of Commerce, preliminary data indicates that the average work
week in May was 39.5 hours, a (1.3)%
decrease from the prior month. This was a
sharp reversal from last month’s gain. June’s
decline cannot be attributed to seasonal
factors, however, since the work week for this
month historically increases by about 0.2%.
Data released in the coming months will help
determine whether June’s reading was an
anomaly or not.
The state’s unemployment rate remained
unchanged at 9.6% in June. This means that
the jobless rate in the state has been
essentially flat over the last 5 months. The
state’s unemployment rate in June exceeded
the national average for the first time since
April 2009.
The Department of Commerce reported that
30,999 initial claims for unemployment
insurance were filed in June. At this level,
there were 3,464, or 12.6%, more claims than
in the prior month. While this was a smaller
month-over-month increase than in the prior
year, it still remained significantly above the
comparable pre-recession average increase
of 700 claims. June marked the 8th
consecutive month with a year-over-year
decline in claims. Initial jobless claims peaked
in April 2009 when more than 41,000

(Continued)

individuals filed for benefits. See Tracking
Arizona’s Recovery, for additional historical
information.
According to Department of Commerce, the
state had a total of 87,787 claimants
receiving unemployment insurance benefits in
June. This figure was 4.4% above the prior
month, a significantly smaller increase than
reported for the same month in the prior 7
years. The number of persons receiving
jobless benefits is down by (23.4)% compared
to last year. It should be noted, however, that
the figure above only reflects claims received
by individuals under the state’s regular
unemployment insurance (UI) benefit
program. Under this program, qualified
individuals may receive jobless benefits for up
to 26 weeks.
After the 26 weeks of regular UI benefits have
been exhausted, unemployed persons in the
state may qualify for up to an additional 53
weeks of Emergency Unemployment
Compensation (EUC) plus another 20 weeks
of Extended Benefits (EB), for a total of 99
weeks of jobless benefits. The UI benefits
under the EUC and EB programs are federally
funded. Data provided by the Arizona
Department of Economic Security (DES)
suggests that regular UI benefits make up
about 40% of all claims paid.
Housing
In Maricopa County, foreclosure related data
continued to improve in June. The number of
new foreclosure notices – the initial step in the
foreclosure process – totaled 6,170, its lowest
level since April 2008. The number of pending
foreclosures – inventory at risk of being sold
by the trustee at some point in the future –
declined for the 4th straight month to 42,324.
June 2010 marks the first month in which the
year-over-year change in pending
foreclosures has been negative (-7.3%) since
August 2006. Pending foreclosures peaked at
51,466 in December 2009. See Tracking
Arizona’s Recovery, for additional historical
information.
ASU’s June real estate report suggests that in
Metropolitan Phoenix, the single-family
median resale home price was $147,500
based on a total of 10,720 single-family
existing home sales. Relative to the prior
month, the measures were up 1.7% and
11.0%, respectively. On a year-over-year

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Economic Indicators
basis, the median resale price rose 5.4% while
the total number of units bought and sold
declined (9.3)% due to sales activity reaching
a recent high of 11,820 in June 2009. The
median resale price peaked in June 2006 at
$267,000.
Other Economic Data

“Consumer
confidence in
the state
decreased by
(0.5) points
(relative to the
April 2010 report)
to a level of 49.1,
the second
lowest reading
on record.”

According to the Behavior Research Center’s
July Arizona Consumer Confidence Index
report, consumer confidence in the state
decreased by (0.5) points (relative to the April
2010 report) to a level of 49.1, the second
lowest reading on record. The decline in
consumer confidence was entirely
attributable to growing pessimism about
business and employment conditions, as well
as expected earnings over the next 6 months.
A deteriorating outlook on the economy is
typically associated with reduced growth in
consumer spending on durable goods, such
as autos and computer equipment.
A total of 16.1 million passengers entered and
exited aircraft at the Phoenix Sky Harbor
International Airport in the first 5 months of
2010, a 2.2% increase over the comparable
period in the prior year but still (8.0)% below
pre-recession levels. The industry outlook is
improving as evidenced by the fact that May
marked the 8th consecutive month with yearover-year growth in air passenger traffic at Sky
Harbor.
State Agency Data
Participation in income driven programs has
either moderated or declined somewhat in
the last few months, as evidenced by the
data presented below.
In July, AHCCCS caseloads equaled 1.35
million members, a (0.7)% decrease over the
prior month. AHCCCS caseloads are currently
6.1% above July 2009 levels. Total enrollment
has stayed essentially unchanged since
December 2009. The FY 2010 budget funded a
projected June caseload growth of 14.4%, for
a total of 1,435,445 members.
There were 72,257 TANF recipients in the
state in May, a monthly caseload decrease
of (2.7)%. Year-over-year, the number of
TANF recipients has declined by (14.4)%. The
FY 2010 budget assumed that the June 2010
TANF caseload would be 84,287.

(Continued)

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 1.06 million food stamp
recipients in the state, an increase of 3.3%
over the prior month. Compared to the
same month last year, food stamp
participation was up by 22.8%. The number
of food stamp recipients began increasing
steadily in July 2007, after several years in the
550,000 to 575,000 range.
The 3-month average count of the Department
of Correction’s (ADC) inmate population
totaled 40,574 inmates between April and
June 2010 - an average decline of (10) inmates
per month. At the close of FY 2010, however,
the department’s population totaled 40,571
inmates or 65 inmates more than were in the
ADC custody at the close of FY 2009.
Population growth during FY 2010 averaged 5
inmates per month, the lowest rate of growth
experienced since at least 1973. Data prior to
1973 was unavailable.
Based on adult and juvenile probation data
from March and May, respectively, the nonMaricopa probation caseload was 19,602
individuals – 14 less probationers than the prior
month and 648 probationers less than a year
ago. In Maricopa County, there were 28,285
probationers during the period, 596 less than
the prior month and 1,172 less than a year
ago. With the excerption of Maricopa
County, who assumes all costs related to
probation programs, the state and counties
share the costs of probation programs.

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Economic Indicators

(Continued)

Table 5

ECONOMIC INDICATORS
Indicator
Arizona
- Unemployment Rate
- Initial Unemployment Insurance Claims
- Unemployment Insurance Claimants
- 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
- Foreclosure Activity, Maricopa County
Foreclosure Notices (Notice of Trustee’s Sales Recorded)
Pending Foreclosures (Active Notices)
Greater Phoenix S&P/Case-Shiller Home Price Index
(Jan. 2000 = 100)
- Arizona 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
- ADC Inmate Growth (3-month average)
- Probation Caseload (Adult/Juvenile)
Non-Maricopa
Maricopa County
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
June
Apr-Jun
Apr-Jun

9.6%
30,999
87,787
2.37 million
150,500
113,800
39.5
$30.9 million
$129.1 million

0.0%
12.6%
4.4%
(2.2)%
1.0%
(0.8)%
(1.3)%
5.9%
9.7%

0.3%
(20.0)%
(23.4)%
(0.3)%
(1.1)%
(12.9)%
0.3%
(27.0)%
(6.9)%

Apr-Jun
Apr-Jun

1,002
69

(13.1)%
(38.9)%

(21.2)%
524.2%

June
June

10,720
1,725

11.0%
14.2%

(9.3)%
24.1%

June
June

$147,500
$99,900

1.7%
(3.0)%

5.4%
(9.2)%

June
June
May

6,170
42,324
111.0

(4.7)%
(5.9)%
0.9%

(29.1)%
(7.3)%
7.2%

June
April
April

6.5 months
3.31 million
$5.45

3rd Quarter 2010
June
1st Quarter 2010
July 1, 2009
July
May
May
Apr-Jun

49.1
199.02
$220.0 billion
6.60 million
1,352,829
72,257
1,056,752
40,574

(1.0)%
0.0%
1.1%
N/A
(0.7)%
(2.7)%
3.3%
(10) inmates

(18.4)%
(0.2)%
1.0%
1.5%
6.1%
(14.4)%
22.8%
260 inmates

Mar/May
Mar/May

19,602
28,285

(14)
(596)

(648)
(1,172)

1st Quarter 2010
(Final Estimate)
July
June
Mar-May
June

$13.2 trillion

2.7%

2.4%

50.4
109.8
$4.27 billion
216.9

(7.2)%
(0.2)%
8.2%
(0.1)%

6.3%
8.6%
52.9%
1.1%

(0.3) months
(4.3)%
(26.5)%

0.6 months
0.4%
8.8%

12

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Summary of Recent Agency Reports
AHCCCS – Report on Healthcare
Group – Pursuant to A.R.S. § 362912Z, the Arizona Health Care Cost
Containment System (AHCCCS)
submitted its quarterly financial
report for Healthcare Group (HCG)
for the period January 1, 2010 to
March 1, 2010. The agency reports
that HCG’s revenues were $1.3
million greater than their
expenditures after adjustments and
fund transfers for the first 3 quarters
of FY 2010. Of this amount, about
$319,000 was from the third quarter.
HCG began FY 2010 with total
unpaid prior year obligations and
other liabilities of $13.4 million. As of
March 31 2010, total liability was
$12.9 million.
AHCCCS reports that, as of May
2010, total statewide HCG medical
plan enrollment was 10,977, with
participating members from 4,046
employers. This is a decline of (3,793)
participating members and (1,057)
employers from a year earlier.
AHCCCS acknowledges that the
worsening economy and selectivity
in outreach has contributed to the
declining enrollment. (Amy Upston)
Department of Economic Security —
Report on Arizona Training Program
at Coolidge (ATP-C) Campus and
Other Placements — A footnote in
the FY 2010 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 2010.
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
2010. 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. (Aaron Galeener)

Department of Education – Report
on Federal Monies for English
Learners – Pursuant to A.R.S. § 15756.10, paragraph 3, the
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 2010. 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 $24.9
million in federal Title III (Language
Instruction for Limited English
Proficient and Immigrant Students)
funding for FY 2010. Of that
amount, approximately $23.4 million
was distributed directly to school
districts and charter schools. The
remaining $1.5 million was used for
state administration, technical
assistance, and to meet federal setaside requirements for immigrant
education. (Steve Schimpp)
Public Programs Eligibility Report –
As enacted in the 2006 election,
Proposition 300 limits participation in
certain state programs to citizens,
legal residents, and other persons
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 – Statewide
for the spring 2010 semester, the
Community Colleges reported a
total of 255,720 students classified
as in-state. They reported 1,962
students who were not entitled to
be classified as in-state because of
a lack of lawful immigration status.
Additionally, 85,974 students
applied for financial aid. Of those
who applied, the community
colleges reported that 306 were not
entitled to any aid because they
were not lawfully present in the
United States.

Universities – At the 3 universities,
121,737 students registered for the
spring 2010 semester. Of the total
students registered, the universities
were able to verify the legal
immigration status of 111,005
students. Additionally, the
universities reported that 7,730 of
these students did not require
verification because they had
either not requested or received instate tuition or state supported
financial aid. The universities
reported that a total of 248 students
were unverifiable due to their
inability to provide the requisite
documentation.
Department of Economic Security –
The department reported that 6,402
applications were received for child
care assistance during the reporting
period of December 1, 2009 to May
31, 2010. Of this number, 7 were
denied because criteria for
citizenship or legal residency were
not met.
Department of Education – The
department reported that 19,652
people applied for instruction in
Arizona Adult Education during the
reporting period of December 1,
2009 to May 31, 2010. Of this
amount, 503 were denied
instruction because they failed to
provide acceptable evidence of
citizenship or legal residence in the
United States. Previously, the
Department of Education reported
the number of applicants and
applicants ineligible for enrollment
for the Family Literacy Program. This
program, however, was
discontinued as of December 1,
2009 resulting in no information to
report. (James Alcantar)

13

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Staff Updates
FY 2008 – 2011 Comprehensive Solutions - In
July, the JLBC Staff released a report on how
the state resolved its budget shortfalls
between FY 2008 and FY 2011. See
Comprehensive Budget Solutions for more
information.

“During that time
[FY 2008 – FY
2011], the state
eliminated $12.5
billion in
cumulative
shortfalls. Of that
amount, $9.0
billion, or 72%,
were one-time
solutions."

During that time, the state eliminated $12.5
billion in cumulative shortfalls. Of that
amount, $9.0 billion, or 72%, were one-time
solutions. Ongoing solutions represented
another $2.7 billion, or 21% (including $2.2
billion of spending reductions). The 1-cent
sales tax increase, a one-time solution lasting
for 3 years, generates the final 7%.
The 3 largest one-time solutions were federal
stimulus savings of $2.4 billion, debt and leasepurchase financing of $2.1 billion, and fund
transfers of $2.0 billion.
High Risk Insurance Pools - The Patient
Protection and Affordable Care Act (PPACA)
established a national plan to cover adults
with pre-existing conditions. The PPACA
allocated $5 billion in federal funding through
2014 to help each state provide
coverage until health insurance exchanges
become available. States could chose to set
up their own plan, or opt to let the federal
Department of Health and Human Services
run a plan in their state. Arizona, along with
20 other states, has chosen to let HHS run their
plan. On July 1, HHS established the PreExisting Condition Insurance Plan (PCIP).
Coverage for individuals in the HHS plan will
begin August 1, 2010. While AHCCCS is not
responsible, the federal government has not
yet announced whether the coverage
will be provided through local health plans or
through a fee for service model.
Beginning July 1, 2010, individuals could begin
applying for coverage through the federal
government's HealthCare.gov website.
Applicants must provide documentation
proving they meet the following eligibility
requirements:
•
•

Citizenship or lawful presence in the United
States.
Uninsured for at least the last six months
due to a pre-existing condition.

Once approved, individuals will have access
to a broad range of health care services,

including primary care physicians, specialists,
hospitals, and prescription drugs. Covered
individuals will be responsible for premiums, a
$2,500 deductible on covered benefits, and
co-payments. Individuals enrolled in the
Arizona PCIP would have the following
premiums:
Age

00-34

35-44

45-54

55+

$323

$387

$495

$688

Premiums are based upon a standard rate for
a standard population, and vary by no more
than 4:1 due to age. The maximum out-ofpocket costs cannot exceed $5,950 per year.
The PCIP is different from the State of Arizona's
current high-risk pool, Healthcare Group, in
several ways:

• Healthcare Group is only available to

•

•

•

employees at a company with between
2 - 50 employees. There is no restriction
based on employment for the PCIP.
Healthcare Group requires an individual to
have gone without insurance for at least
90 days, while the PCIP has a minimum
requirement of 180 days.
The PCIP is only open to individuals who
have been denied coverage because of
a pre-existing condition. Healthcare
Group does not have a similar
requirement.
Healthcare Group may require individuals
with pre-existing conditions to wait up to
12 months to receive coverage, while the
PCIP has no waiting period.

14

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

June Spending
the FY 2010 budget assumption that
caseload growth in Medicaid spending in
those agencies would be offset by
varying degrees by enhanced federal
match from the federal stimulus
legislation.

FY 2010 Spending
June 2010 spending of $145 million was $241.3
million higher than June 2009. For the yearto-date, spending of $7.8 billion is ($957.2)
million below 2009 (See Table 6 and 7).

•

“For the year-todate, spending
of $7.8 billion is
($957.2) million
below 2009.”

•

The Arizona Department of Education
(ADE) has spent $3.2 billion year-to-date
in 2010, or $(573) million less than 2009.
The $(573) million amount includes a
$(350) million increase in the K-12 rollover,
a $(472) million shift to federal "stimulus"
monies, $300 million to restore a one-time
"cash balances" decrease from FY 2009,
$116 million for "cash balance" related
reimbursements, $(144) million for midyear Soft Capital reductions, and $(23)
million for miscellaneous other adjustments and caseload changes. June
payments were $(86) million below
FY 2009 primarily because charter schools
had already received 12 months of
payments prior to June in FY 2010 due to
a mid-year statutory change in the
monthly payment schedule.

•

AHCCCS June spending was $218.7
million above June 2009. June 2009
spending of $(180.3) million was the result
of AHCCCS receiving a lump sum
payment of 8 months of ARRA federal
funding.

•

DES June spending of $(5.1) million was
the result of operating transfers to re-align
agency funding sources. Similar transfers
occurred in June of the prior year.

•

University spending was $8.9 million in
June. The low expenditure amount
reflects a rollover of the monthly
payment. Year-to-date University
spending is $794.1 million, or $(43.4) million
below FY 2009.

Spending in AHCCCS, and DES is a
combined $33.3 million. The low monthly
spending reflects June payment deferrals
to providers. Year-to-date spending is a
combined $(149.4) million lower than
FY 2009. This is generally consistent with

Table 6
General Fund Spending ($ in Millions)

Agency
AHCCCS
Corrections
Economic
Security
Education
Health Services
Public Safety
School Facilities
Board
Universities
Other
Total

June 10

Change
from
June 09

Year to
Date

YTD Change
from FY 09

$38.4
79.2
(5.1)

$218.7
(2.6)
57.9

$1,228.8
858.8
522.4

$(14.8)
(43.5)
(134.6)

(13.0)
0.6
2.1
0.6

(86.0)
58.4
(1.4)
(12.9)

3,157.1
477.7
42.6
104.8

(572.6)
(31.3)
(14.9)
3.5

8.9
33.3
145.0

3.4
5.8
241.3

794.1
634.9
7,821.2

(43.4)
(105.6)
(957.2)

15

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Table 7

Agency
Department of Administration
Office of Administrative Hearings
Department of Agriculture
AHCCCS
Arizona Commission on the Arts
Arizona Exposition and State Fair
Board
Attorney General
AZ Capital Post Conviction Public
Defender
State Board of Charter Schools
State Bd. of Chiropractic Exam.
Department of Commerce
Community Colleges
Corporation Commission
Department of Corrections
AZ Criminal Justice Commission
AZ State Board of Cosmetology
AZ St. Schools for the Deaf & Blind
Dept. of Economic Security
Department of Education
DEMA
Dept. of Environmental Quality
DEQ-WQARF
Office of Equal Opportunity
State Board of Equalization
Board of Executive Clemency
Dept. of Financial Institutions
Department of Fire, Life, Bldg Safety
State Board of Funeral Directors
Arizona Geological Survey
Government Information Tech.
Governor
Gov. - OSPB
Department of Health Services
Arizona Historical Society
Prescott Historical Society of AZ
Independent Redistricting Comm.
AZ Commission of Indian Affairs
Department of Insurance
Judiciary
Supreme Court
Superior Court
Court of Appeals
Dept. of Juvenile Corrections
State Land Department
Law Enforcement Merit System

General Fund Spending
($ in Thousands)
Change from
June 10
June 09
976.5
868.4
56.0
(7.8)
584.0
21.4
38,357.4
218,729.5
(3.8)
(95.8)
-

Year-to-Date
18,823.5
933.3
8,361.0
1,228,838.1
817.1
400.0
17,732.6
646.3

YTD Change from
FY ‘09
(5,136.2)
(184.6)
(1,756.9)
(14,789.2)
(690.2)
400.0

1,416.0
39.5

(552.3)
(12.3)

(3,366.1)
(104.6)

43.9
211.3
60.6
79,179.1
761.6
(5,134.9)
(12,952.5)
1,545.7
700.6
9.6
41.4
41.1
176.5
95.4
101.6
31.2
381.6
115.8
600.3
185.8
45.1
33.5
305.6

(167.0)
(39.5)
(140.3)
(2,648.9)
410.0
57,938.7
(85,979.8)
771.8
372.7
(2.4)
12.1
(21.0)
3.5
(216.4)
26.8
(134.2)
(89.8)
(69.3)
58,444.8
44.9
17.4
(12.3)
6.1
81.1

686.0
148.0
3,432.6
132,426.3
583.3
858,841.7
(4.6)
252.0
20,970.5
522,351.3
3,157,149.5
10,301.2
5,770.2
7,000.0
190.2
645.3
874.8
2,957.3
2,119.6
100.0
800.9
444.8
6,901.2
1,913.3
477,698.4
3,865.1
655.6
26.1
116.0
5,538.6

(306.1)
148.0
(23,077.8)
(3,309.5)
(3,620.2)
(43,501.1)
(1,190.2)
252.0
(1,422.7)
(134,611.9)
(572,568.8)
(992.2)
(67.6)
(6,000.0)
(26.2)
44.8
(159.0)
(335.7)
(991.8)
100.0
(111.7)
(1,048.8)
(53.5)
(204.0)
(31,275.7)
(152.7)
(0.4)
(213.4)
(102.7)
(836.8)

860.29
2,504.01
1,067.1
3,367.9
3,340.2
1.0

(672.60)
693.30
(105.3)
(1,458.9)
2,227.2
(4.2)

16,653.21
86,847.99
14,023.8
61,478.5
13,502.3
71.9

688.46
(3,242.46)
235.4
(9,313.0)
(2,857.6)
(4.9)

16

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2010

Agency
Legislature
Auditor General
House of Representatives
Joint Legislative Budget Comm.
Legislative Council
AZ Library and Archives
Senate
Dpt. of Liquor Licenses
Board of Medical Student Loans
Mine Inspector
Dpt. of Mines & Mineral Resources
Nav. Streams & Adjudication
State Board of Nursing
OSHA
Arizona State Parks Board
Personnel Board
Comm. for Postsecondary Ed.
State Board of Psychologist Exam.
Department of Public Safety
Arizona Department of Racing
Radiation Regulatory Agency
Arizona Rangers Pension
Real Estate Department
Department of Revenue
School Facilities Board
Secretary of State
Tax Appeals Board
Office of Tourism
Department of Transportation
State Treasurer
Universities
Board of Regents
Arizona State University
Northern Arizona University
University of Arizona
Department of Veteran Services
AZ State Veterinary Medical
Examining Board
Department of Water Resources
Dept. of Weights & Measures
Other
Grand Total

Change from
June 09

Year-to-Date

YTD Change from
FY ‘09

1,331.3
700.6
149.2
268.4
505.8
549.3
56.9
70.2
9.5
4.8
136.3
2,147.1
195.6
60.5
1.2
172.1
6,384.1
57.2
411.8
15.3
4.6
157.7

137.5
(188.7)
(4.1)
(23.6)
367.7
(23.7)
(218.3)
134.0
38.9
(9.6)
(2.2)
4.8
(280.2)
(17.0)
(2.5)
(1,375.3)
57.2
60.3
(50.9)
2,815.2
(12,945.7)
111.9
(1.1)
(0.3)
(0.7)

14,947.6
12,015.2
2,231.5
4,802.4
6,356.1
8,574.8
747.7
801.9
1,079.6
855.2
128.3
19.2
20,214.2
3,554.0
300.0
42,585.3
4,864.5
1,416.8
14.0
3,000.2
38,897.2
104,758.4
6,992.5
251.9
200.0
57.4
2,548.1

(1,904.7)
(598.3)
(175.3)
(7,498.0)
27.2
(86.8)
(3,076.1)
(199.1)
(235.0)
(64.5)
(154.5)
(97.6)
19.2
(3,402.5)
(322.9)
(682.2)
300.0
(14,893.4)
2,603.8
(184.9)
0.3
(660.8)
(25,635.6)
3,510.1
586.9
(10.6)
(112.2)
(5.5)
1.2

662.7
4,872.4
492.6
2,920.9
(326.4)
-

1,978.6
1,774.8
(549.6)
222.5
(1,104.2)
-

21,076.3
350,107.0
117,865.4
305,082.1
8,462.8
250.0

3,937.6
(21,518.3)
(7,166.4)
(18,650.9)
944.7
250.0

2,716.9
86.0
1,040.0
145,000.6

1,586.7
1.4
534.9
241,268.3

17,516.7
1,199.8
23,566.9
7,821,225.8

6,724.8
(174.3)
(2,830.3)
(957,192.5)

June 10