JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

“November was
the fourth
consecutive
month of yearover-year
growth in
General Fund
revenue
collections.”

December 2010

Summary
November was the fourth consecutive month
of year-over-year growth in General Fund
revenue collections. General Fund revenues
totaled $577.0 million. Excluding the
temporary 1-cent sales tax, these collections
were 17.9% above last year.
While the November results were clearly
positive, 17.9% growth overestimates real
economic activity for several reasons. First,
the state incurred extraordinarily large
Corporate Income Tax refunds in November
2009. While refunds remained higher than
normal in November 2010, the revenue loss
was significantly less than the historic low of
November 2009. Second, individual income
tax withholding grew by 8.4% in November,
which is not supported by Arizona’s current
level of job and wage growth. As we have
reported in earlier months, taxpayers appear
to be overwithholding since the withholding
tables changed in July.
Relative to the budget forecast, some of
these gains – like the recovery in Corporate
collections – were expected. As a result,
collections were only above the forecast by
$7.2 million in November. For the 5 months
year-to-date, revenues are $(34.0) million
below forecast.

Fiscal year-to-date, General Fund revenues of
$3.3 billion have been offset by $4.5 billion in
spending. Due to a relatively even cash flow
in November, the state's operating fund
balance stayed almost unchanged at $488.1
million at the end of November. In
comparison, the state was borrowing over
$500 million last November. The state pays its
bills out of the operating fund balance, which
consists of General Fund monies and certain
dedicated funds.
Final FY 2010 Ending Balance
The General Accounting Office released its
Annual Financial Report for FY 2010 on
December 7th. The report showed that the
General Fund ending balance for FY 2010 was
$(5.7) million. FY 2010 is the second
consecutive year of a negative ending
balance, although the FY 2009 shortfall of
$(481.7) million was much more substantial.
While the state is generally thought to have a
balanced budget requirement, the Arizona
Constitution does permit the state to address
any year-end shortfall in the next fiscal year.
As a result, the FY 2010 shortfall will need to be
resolved during FY 2011.

In comparison, November 2010 General Fund
spending was $551.8 million, or $(134.1) million
below last year. November expenditures
were lower than the prior year primarily due
to the timing of Department of Education
spending reductions compared to last year.

Table of Contents

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
December 22, 2010.

Summary

Summary of Recent Agency Reports

• Final FY 2010 Ending Balance ........................... 1

• DES – Domestic Violence Funding................... 8

November Revenues ............................................. 2

• Governor’s Council on Workforce Policy –

Economic Indicators.............................................. 4
JLBC Meeting........................................................... 7
JCCR Meeting ......................................................... 7

Annual Report ..................................................... 8
• DPS – GIITEM Progress......................................... 8
• DPS – Photo Radar.............................................. 8
• DOR – Annual Enforcement Goals .................. 8
November Spending............................................ 10

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

November Revenues
Table 1

November
Year-to-Date

General Fund Revenues ($ in Millions)
FY 2011
Difference From
Difference
Collections
Budget Forecast
From FY 2010
$ 577.0
$ 7.2
$ 159.3
$ 3,251.2
$ (34.0)
$ 574.9

Sales Tax collections were $353.1 million in
November. Excluding the $66.7 million from
the temporary 1-cent increase, collections
were $286.5 million, or 3.8% above November
2009. November is the second consecutive
month to show positive year-over-year growth,
which has not happened since August 2007.
“Given the
relatively flat
growth in wages
and salaries,
however, it is
increasingly

While positive, collections lagged projections.
Including the 1-cent increase, collections were
$(5.9) million below the forecast. The year-todate loss is $(94.7) million.
Table 2 displays the November growth rates for
the largest categories
Table 2

Sales Tax Growth Rates
Compared to Prior Year

likely that
taxpayers are
over-withholding
and some of [the
growth in
Individual
Income Tax
collections] will
result in higher
refunds in April.”

Retail
Contracting
Utilities
Use
Restaurant & Bar

November
(0.1)%
3.8%
6.4%
21.2%
5.0%

YTD
(0.2)%
(15.0)%
1.3%
1.5%
2.7%

Retail and contracting together account for
about 60% of all sales tax revenues. Retail
collections were nearly flat compared to
November of last year. Contracting was
positive compared to November of last year.
This is the first positive month for contracting
since August 2007.
Individual Income Tax net revenues were
$266.2 million in November, or 14.9% above the
prior year. Collections were $26.4 million
above the forecast. Year-to-date, revenues
have grown 10.3% and are $58.2 million above
forecast through November.
As indicated in Table 3 below, withholding tax
payments increased by 8.4% in November,
making 8 of the past 9 months positive. This
increase continues to be difficult to interpret
due to changes in the state withholding
system. (See the August MFH for additional
information.)
Given the relatively flat growth in wages and
salaries, however, it is increasingly likely that

taxpayers are over-withholding and some of
those gains will result in higher refunds in April.
As a result, the Department of Revenue has
further revised the withholding schedule by
adding additional lower withholding options.
These options will be available beginning
January 1, 2011.
Table 3

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

November
8.4%
(17.7)%
(51.9)%

YTD
5.1%
(2.0)%
(24.3)%

Corporate Income Tax net collections were
$(37.2) million in November, or $39.9 million
more than the prior year. Collections were
$(16.9) million below the forecast. Most of the
growth over the prior November is due to lower
refunds, which totaled $(45.6) million. In
November of the prior year, refunds totaled
$(93.9) million, which was the largest refund
month on record (since 1994).
Year-to-date through November, revenues are
up 189.1% and are $10.0 million above
forecast.
The Lottery Commission reports that
November ticket sales were $46.0 million,
which is $3.3 million, or 7.7%, above sales in
the prior year. Year-to-date, ticket sales are
$215.5 million, which is 2.6% above last year’s
sales. The General Fund share of sales has
increased significantly more than sales,
however, due to changes in the distribution
formula.
Non-General Fund
Tobacco Tax revenues were $28.9 million in
November. Collections were up 1.1%
compared to the prior year, and were $0.8
million above the budget estimate for the
month. Year-to-date collections are down
(1.2)% and are $1.3 million above the budget
estimate.

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

November Revenues

(Continued)

Less than 10% of tobacco taxes are deposited directly into
the General Fund. The remainder primarily goes to
AHCCCS and the Department of Health Services to
defray the General Fund cost of operating those
programs, along with funding the Early Childhood
Development and Health Board.

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. HURF
collections of $96.1 million in November were up $0.9
million or 0.9% compared to November of last year.
Year-to-date, revenues have grown 1.2%.
Table 4

General Fund Revenue:
Change from Previous Year and Enacted Budget Forecast
November 2010
Current Month

FY 2011 YTD (Five Months)

Change From
Actual

November 2009

November 2010

Amount

Change from
Actual

Forecast

Percent

Amount

Percent

November 2009

November 2010

Amount

Forecast

Percent

Amount

Percent

Taxes
Sales and Use w/o 1¢ *
Income - Individual
- Corporate

$286,485,609

$10,491,181

266,193,368

34,587,420

(37,178,120)

39,874,746

3.8 %
14.9
--

$1,410,306,045

($9,659,966)

(0.7) %

26,391,723

$691,617

11.0

0.2 %

1,251,937,167

116,901,449

10.3

58,187,354

(16,913,020)

83.5

142,222,040

93,019,501

189.1

9,960,540

7.5

17.2

5,890,616

1,240,616

26.7

4.9

3,750,758

(653,069)

(14.8)

550,758

Luxury - Tobacco

2,540,489

578,921

29.5

(141,511)

(5.3)

10,581,779

(555,952)

(5.0)

(2,728,221)

(20.5)

2,315,733

(60,837)

(2.6)

(346,267)

(13.0)

10,552,193

(100,218)

(0.9)

(1,000,807)

(8.7)

(780,668)

--

(628,059)

--

136,034,663

3,166,144

2.4

7,934,663

6.2

0

(39,278)

(100.0)

--

437,372

103,988

31.2

437,372

23,982

(15,380)

(39.1)

(54.3)

243,548

(16,726)

(6.4)

(18,952)

Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

(628,059)

$523,503,760

$83,983,036

Lottery

4,566,155

1,506,755

License, Fees and Permits

1,897,646

19.1 %

0
(28,518)
$9,576,723

1.9 %

$2,968,205,423

$202,520,492

(5.4)

(3.9) %

Property
- Liquor

(337,728)

($57,799,696)

7.3 %

$16,212,869

-(7.2)
0.5 %

Other Revenue

Interest

(132,566)

49.3

(633,845)

(12.2)

17,522,419

5,216,119

42.4

(6.5)

(102,354)

(5.1)

11,244,892

386,434

3.6

744,892

--

1,956,254

815,537

71.5

1,956,254

279,253

247,685

784.6

279,253

Sales and Services

2,550,658

1,613,266

172.1

550,658

Other Miscellaneous

2,352,494

(1,468,225)

(38.4)

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

0
9,325,852
20,972,058
$544,475,818

0
(3,168,505)
(1,401,590)
$82,581,446

(2,847,506)

--

0

(25.4)

6,925,852

(3,277,581)

(15.8)
7.1
--

27.5

8,718,468

(2,064,241)

(19.1)

(2,781,533)

(24.2)

(54.8)

12,743,995

(8,055,952)

(38.7)

(11,356,005)

(47.1)

--

0

288.6

13,367,053

(6.3) %

4,172,058

24.8 %

65,553,081

17.9 %

$13,748,781

2.6 %

$3,033,758,504

0

--

0

(14,768,118)

(52.5)

1,367,053

(18,470,220)

(22.0) %

$184,050,272

6.5 %

(13,346,919)
$2,865,950

-11.4
(16.9) %
0.1 %

Other Adjustments
Urban Revenue Sharing
1¢ TPT Increase*
Budget Plan Transfers

(39,500,543)

12,886,509

--

66,653,153

66,653,153

--

5,405,208

(2,805,453)

32,557,817

76,734,208

-- %

$577,033,636

$159,315,655

38.1 %

Highway User Revenue Fund

$96,148,000

$881,000

0.9 %

Tobacco Tax (All Funds Total)

$28,945,611

$316,330

1.1 %

Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(34.2)

0
(6,579,053)
0

0.0

(197,502,716)

64,432,545

--

(9.0)

327,907,726

327,907,726

--

0.0

87,073,008
217,478,017

390,861,174

-- %

(36,887,212)

(14.5) %

1.3 %

$3,251,236,521

$574,911,446

21.5 %

($34,021,262)

(1.0) %

($548,000)

(0.6) %

$490,446,000

$5,943,000

1.2 %

($1,325,000)

(0.3) %

$774,377

2.7 %

$137,215,534

($1,675,584)

(1.2) %

$1,339,337

1.0 %

$7,169,728

(1.7)

0

0.0
(10.1)

(16.8) %

(6,579,053)

(1,479,096)

0
(36,887,212)

0.0

Non-General Funds

__________
* Sales and Use line excludes revenue from the temporary 1¢ increase approved by the voter in May 2010. That revenue is shown under One-Time Revenues. Total November collections including the 1¢ increase
were $353.1 million. This amount is $77.1 million, or 28.0%, above November 2009 and $(5.9) million, or (1.6)%, below forecast. Year to date, total collections including the 1¢ increase were $1.74 billion. This amount is
$318.2 million, or 22.4%, above November 2009 and $(94.7) million, or (5.2)%, below forecast.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

Economic Indicators
NATIONAL

“November
marked the
fourth straight
month with a
year-over-year
growth in
nonfarm
employment.
Compared to the
same month in
the prior year, the

The Conference Board’s U.S. Index of Leading
Economic Indicators rose 1.1% in November,
the largest gain in 8 months, signaling the
economy might be strengthening early next
year. A decrease in unemployment claims,
improvements in vendor performance, and
favorable interest rate spread, along with
positive contributions from all but one indicator
pushed the index to its highest point in a year.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), increased by 0.1%
in November. Excluding food and energy,
core consumer prices rose by 0.1% after being
flat for 3 consecutive months. While November
producer prices exerted upward pressure on
input costs due to rising commodity prices, the
continued restraint in consumer prices suggests
that there is still considerable slack in the
economy.
The Semiconductor Industry Association (SIA)
reported that Semiconductor Billings (3-month
moving average) in the U.S. were $4.81 billion
in October, or essentially at the same level as in
the prior month. Year over year, chip sales
have grown by 30.7%. The trade association
expects sales growth to moderate in 2011 and
2012.

state has now
ARIZONA

added 24,900
jobs (a net gain
of 1%).”

Employment
According to the Arizona Department of
Commerce, the state had a net gain of 12,800
nonfarm jobs in November. This represented a
0.5% increase over the prior month. November
marked the fourth straight month with a yearover-year growth in nonfarm employment.
Compared to the same month in the prior
year, the state has now added 24,900 jobs (a
net gain of 1%). Since the beginning of the
recession in December 2007, the state has
shed (265,600) jobs, or (9.8)% of its workforce.
See Tracking Arizona’s Recovery, for additional
historical information.
Most of November’s job gain was attributable
to the retail sector (8,700), followed by
employment services (1,800) and health care
services (1,300).

The state’s year-over-year growth rate of 1.0%
in November exceeded the national average
of 0.6%, suggesting that the recovery in Arizona
is strengthening.
While 6 sectors of the economy have yet to
experience year-over- year job gains
(manufacturing, financial activities,
information, leisure and hospitality, other
services, and government), there are still many
positive signs, such as the expansion of the
retail sector and increased use of temporary
employees, which suggest that Arizona’s
overall employment situation will continue to
improve in the coming months.
The state’s unemployment rate fell from 9.5% to
9.4% in November. This marked the second
consecutive decline of Arizona’s jobless rate.
By way of comparison, the national
unemployment rate increased from 9.6% to
9.8% during the same month.
The state’s unemployed filed a total of 23,332
initial claims for unemployment insurance in
November, a (11.6)% decline over the prior
month. Initial claims typically decrease in
November due to the seasonal hiring of retail
workers. November also marked the lowest
level of initial claims since August 2008.
Compared to the same month in the prior
year, first-time claims in November were down
by (18.9)%, the 13th consecutive month with
year-over-year declines.
Claims peaked in April 2009 when more than
41,000 individuals filed for initial jobless
benefits. 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 November was
40.6 hours, a 1.0% increase over the prior
month, and a 3.6% improvement since last
year. November typically sees a sharp
increase in the average work week due to
seasonal hiring. Prior to the recession, the
average work week for the month of
November was 40.8 hours.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

Economic Indicators
Housing
In November, the number of new Maricopa
County foreclosure notices declined (16.8)%
from October levels to 5,891. The total is the
lowest for a single month since 5,339 new
notices were recorded in March 2008.

“In November,
the number of
new Maricopa
County
foreclosure
notices declined
(16.8)% from
October levels to

The number of Maricopa County pending
foreclosures increased slightly in November.
The November total of 41,771 is (18.8)% below
the peak in December 2009 (51,466). See
Tracking Arizona’s Recovery, for additional
historical information.
While foreclosure notices and pending
foreclosures continue their decline from
recent highs, they continue to be a major
influence on existing home sales and the
respective prices. In the Metropolitan Phoenix
area in November, there were a total of 6,845
existing single-family home sales that resulted
in a median resale home price of $135,000.
Relative to the prior year, the number of sales
and prices are down (17.9)% and (5.9)%
respectively. Of the existing sales, 30.6%, or
2,095 were foreclosures.

5,891. The total is

State Agency Data

the lowest for a

In December AHCCCS caseloads equaled
1.35 million members, a (0.7)% decrease over
the prior month. AHCCCS caseloads are
currently (1.4)% below December 2009 levels.
The FY 2011 budget funded a projected
December 2010 caseload of 1.41 million
members.

single month
since 5,339 new
notices were
recorded in
March 2008.”

There were 44,949 TANF recipients in the state
in November, a monthly caseload decrease
of (0.2)%. Year-over-year, the number of TANF
recipients has declined by (48.7)%. This
decline is the result of changes to the
statutory lifetime limit a person may receive
cash assistance. Beginning in July, recipients
can only receive benefits for a maximum of
36 months in a lifetime. Previously, the
maximum had been 60 months. This change
resulted in a caseload decline of
approximately (16,000) recipients. The FY 2011
budget assumed caseloads of approximately
70,000 in FY 2011.
The Supplemental Nutrition Assistance
Program (SNAP), formerly known as Food
Stamps, provides assistance to low-income
households to purchase food. In November,
there were a total 1.08 million food stamp
recipients in the state, a (0.5)% decrease over
the prior month. Compared to the same

(Continued)

month last year, food stamp participation was
up by 6.1%. 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 rose
to 40,307 inmates between September and
November 2010. Relative to the prior month
the population has increased by 25, and
compared to a year ago the population has
declined by (380) inmates.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 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

November
November
October
November
November
November
November
Sept-Nov
Sept-Nov

9.4%
23,332
73,259
2.45 million
148,700
117,300
40.6
$33.2 million
$127.8 million

(0.1)%
(11.6)%
(2.7)%
0.5%
0.4%
(2.5)%
1.0%
7.0%
(1.2)%

0.1%
(18.9)%
(30.1)%
1.0%
(0.3)%
0.5%
3.6%
(6.6)%
0.8%

Aug-Oct
Aug-Oct

792
164

(6.0)%
15.3%

(29.3)%
255.8%

November
November

6,845
1,025

(15.2)%
(15.6)%

(17.9)%
(12.4)%

November
November

$135,000
$81,000

(2.6)%
(4.7)%

(5.9)%
(23.5)%

November
November
September

5,891
41,771
107.16

(16.8)%
0.5%
(1.5)%

(17.6)%
(17.3)%
(1.9)%

November
October
September

6.7 months
3.26 million
$5.69

4th Quarter 2010
October
3RD Quarter 2010
July 1, 2009
December
November
November
Sept-Nov

56.3
179.83
$225.4 billion
6.60 million
1,347,631
44,949
1,081,346
40,307

14.7%
0.3%
0.7%
N/A
(0.7)%
(0.2)%
(0.5)%
25 inmates

N/A
1.0%
3.4%
1.5%
(1.4)%
(48.7)%
6.1%
(380) inmates

October
October

19,530
26,447

(98)
(227)

(195)
(2,658)

3rd Quarter 2010
(Second Estimate)
November
November
Aug-Oct
November

$13.3 trillion

2.5%

3.2%

54.1
112.4
$4.81 billion
219.1

8.4%
1.1%
0.0%
0.1%

6.9%
6.2%
30.7%
1.1%

(0.2) months
11.7%
(7.3)%

1.3 months
2.1%
(3.6)%

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

JLBC Meeting
At its December 14, 2010 meeting, the Joint
Legislative Budget Committee considered the
following issues:
Attorney General – Review of Allocation of
Settlement Monies – The Committee gave a
favorable review of a total of $1,431,400 from
2 settlements: 1) a $250,000 settlement
resulting from mediation as part of ongoing
Average Wholesale Price litigation with
pharmaceutical companies, of which
$227,500 will be deposited into the Consumer

Protection-Consumer Fraud Revolving Fund
and $22,500 will go toward outside counsel
compensation; and 2) a $1,181,400 settlement
from a consent judgment with Pulte Homes, of
which $281,400 is designated to compensate
Arizona consumers, $500,000 will be deposited
into the Consumer Protection-Consumer
Fraud Revolving Fund, $100,000 will fund the
publication of new educational materials,
and $300,000 will go toward Attorney General
costs and investigative expenses.

JCCR Meeting
At its December 14, 2010 meeting, the Joint
Committee on Capital Review considered the
following issues:
School Facilities Board – Review of Laveen
Elementary School District Enrollment Counts –
The Committee gave a favorable review of
the Laveen Elementary School District project.
The Committee favorably reviewed the leasepurchase issuance that will finance this
project at its June 2010 meeting.
Arizona State University – Review of Student
Health Services Center and Other Projects –
The Committee favorably reviewed the
university’s request to issue a $14.8 million
revenue bond to fund new construction and
building renewal projects. Of this amount, $10
million will be for the Student Health Services
Center new construction and renovation at
the Tempe campus, $1.5 million for walkway
renovations and lighting improvements at the
Tempe campus, and $3.3 million for research
and office space renovations at the
Downtown campus.
Arizona Game and Fish Department – Review
of FY 2011Building Renewal and Ben Avery
Shooting Facility Projects – The Committee
gave a favorable review of the department’s
proposed FY 2011 Building Renewal Allocation
Plan totaling $506,800 and their request to
expend $800,000 for improvements to the Ben
Avery Shooting Facility.

Arizona Department of Transportation –
Review of FY 2011 Building Renewal Allocation
Plan – The Committee gave a favorable
review to the department’s $1,050,000 FY 2011
Building Renewal Allocation Plan, including
$1,000,000 from the State Highway Fund and
$50,000 from the State Aviation Fund.
Arizona Department of Administration –
FY 2011 – FY 2013 Rent Exemptions – The
Committee recommended the proposed
FY 2011, FY 2012, and FY 2013 semi-annual
payment plan for the Office of Pest
Management and the quarterly payment
plan for the Board of Respiratory Care
Examiners.

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

Summary of Recent Agency Reports
Department of Economic Security –
Report on Available State and
Federal Domestic Violence Funding
- Pursuant to a General
Appropriation Act Footnote, the
Department of Economic Security
(DES) is submitting its annual report
on state and federal domestic
violence funds. There is a total of
$24.0 million currently used by 6 state
entities for domestic violence
services, an increase of $0.1 million,
or 0.4%, from FY 2009. (Aaron
Galeener)
Governor’s Council on Workforce
Policy – Report on FY 2010 Annual
Report – Pursuant to A.R.S. § 411542, the Governor’s Council on
Workforce Policy (GCWP) submitted
its annual report on workforce
development. The total workforce
spending from state, federal, and
local sources for FY 2009 was $250
million. Of this total, the
Department of Economic Security
accounted for $193.5 million,
Department of Education for $17.5
million, and Department of
Commerce for $39.0 million.
Additionally, the Community
Colleges are estimating FY 2010
expenditures of $180.7 million.
Excluding the community colleges,
the largest programs in FY 2009
include the JOBS program, which
provides employment and training
services to Temporary Assistance to
Needy Families (TANF) recipients
($27.5 million), Vocational
Rehabilitation ($69.5 million), the
Workforce Investment Act program
($37.6 million), and the Department
of Commerce Job Training program
($38.3 million), which provides
incentives to companies to provide
training programs. (Eric Billings)
Department of Public Safety –
Quarterly Report on GIITEM –
Pursuant to the General
Appropriation Act, the Department
of Public Safety (DPS) is required to
report quarterly on the Gang and
Immigration Intelligence Team
Enforcement Mission (GIITEM). In

the first quarter of FY 2011, DPS
spent or encumbered $2.3 million of
the $9.2 million appropriation for the
direct DPS immigration staff. In
terms of local law enforcement
grants, DPS spent $1.3 million of the
non-lapsing FY 2010 $2.6 million
appropriation. The $2.6 million in
new FY 2011 local law enforcement
grants will be available for use
through FY 2012. (Eric Billings)
Department of Public Safety –
Quarterly Report on Photo
Enforcement – Pursuant to a
footnote in the General
Appropriation Act, the Department
of Public Safety (DPS) is required to
report quarterly on the Photo
Enforcement program in FY 2011.
Since the inception of the program
in September 2008, a total of
1,695,625 Notices of Violation
(NOVs) and citations have been
issued and 452,147, or 26.7%, have
been paid.
The NOVs and citations issued by
the Photo Enforcement Program
generated $6.4 million in revenue
for the first quarter of FY 2011 and
$74.4 million since the program’s
inception. The General Fund
received no monies in the first
quarter, although future transfers
are planned, and $39.9 million since
the program’s start.
During the first quarter of FY 2011,
the Photo Enforcement Program
issued 30,621 citations that occurred
prior to July 15. A total of 912 NOVs
were paid during the quarter. DPS
ended the photo radar program
effective July 15. (Eric Billings)
Department of Revenue – Annual
Enforcement Goals Report –
Pursuant to a General
Appropriation Act footnote, the
Department of Revenue (DOR) is
required to report on their FY 2011
revenue enforcement goals, and to
provide an annual progress report
to the Committee as to the
effectiveness of the department’s

overall enforcement and
collections program for FY 2010.
DOR’s General Fund FY 2011
revenue enforcement goal is $360.9
million, which is $25.6 million, or 7.6%,
above FY 2010 actual collections.
This figure includes a $49.8 million
increase due to a FY 2011
appropriation of $7.5 million to hire
approximately 70 temporary
collectors and 70 auditors.
According to DOR, these targets
were based on the assumption that
they would not experience further
budget reductions.
Compared to actual FY 2010
General Fund enforcement
revenue, DOR’s FY 2011 goals
consist of:
•
•
•

An increase in audit revenue of
$1.8 million, or 1.6%.
An increase in collections
revenue of $30.9 million, or
20.9%.
A decrease in accounts
receivables revenues of $(7.1)
million, or (9.7)%.

Table 6 compares DOR’s General
Fund revenue enforcement goals
for FY 2011 to their goals and results
for FY 2010.
The 3 main categories of
enforcement revenue are audit,
collections, and accounts
receivable. Audit enforcement
revenue includes revenue due to
DOR’s auditing of taxpayer returns,
and finding and licensing
unlicensed businesses. Accounts
receivable revenue includes
taxpayer accounts paid before
they would have been moved to
collections, which allows DOR’s
collectors to work on other
accounts. After certain periods of
time, unpaid taxpayer accounts are
moved from accounts receivable to
DOR’s Collections Section. (Eric
Billings)

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

Summary of Recent Agency Reports

(Continued)

Table 6

DOR's General Fund Enforcement Revenue Goals in FY 2011
Compared to FY 2010 (Net of Duplications)
FY 2010
Goals
Audit Division
Corporate Tax
Nexus/Discovery 1/2/
Individual Tax
Transaction Privilege Tax
Luxury Tax
License Compliance
Subtotal

$ 14,937,100
25,099,200
4,379,400
7,496,100
318,200
12,114,200
64,344,200

FY 2010
Actual
$ 35,984,800
21,608,200
7,156,700
30,338,400
1,865,100
17,228,700
114,181,900

FY 2011
Goals
$ 35,864,700
25,899,500
8,121,900
18,327,000
1,008,500
26,811,300
116,032,900

Collections
122,208,700
147,341,700
178,180,900
Accounts Receivable 3/
65,724,800
73,804,000
66,688,000
Total:
$252,277,700
$335,327,600
$360,901,800
____________
1/ The Nexus program is part of corporate audit, which locates out-of-state businesses with
an Arizona business presence that are not paying Arizona corporate income tax.
2/ Discovery revenue is DOR's term for additional revenue attributed to BRITS, which can be
traced to specific taxpayers. Beginning in FY 2010, these monies are no longer
separated from the Nexus category due to the shift of the administration of BRITS to DOR.
3/ Taxpayer accounts paid before they would have been moved to collections, which
allows collectors to work on other accounts.

10 JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

November Spending
FY 2011 Spending
November 2010 spending of $551.8 million
was $(134.1) million lower than November
2009 (See Table 7).

•

•

•

In November, the Arizona Department of
Education spending was $(144.2) million
lower than the prior year. November
expenditures were lower due to ADE soft
capital reductions being made earlier in
the year compared to last year.
University spending was $56.5 million in
November, or $(21.8) million lower than
the prior year. The decreased
expenditure amount reflects a rollover of
the monthly payment, which is spread out
over the course of the fiscal year.
Department of Health Services (DHS)
spending was $47.3 million in November
or $36.2 more than the prior year. The

•

higher expenditure amount reflects a
transfer to AHCCCS for DHS Medicaid
expenditures occurring in a different
month last year compared to this year.
Department of Economic Security (DES)
spending was $8.2 million in November, or
$(26.7) less than the prior year. This low
expenditure amount reflects technical
transfers of agency funds and does not
reflect actual expenditures.

Table 7
General Fund Spending ($ in Millions)

Nov 11
Agency
AHCCCS
Corrections
Economic Security
Education
Health Services
Public Safety
School Facilities Board
Universities
Leaseback Debt Service
Other
Total

121.4
66.9
8.2
229.1
47.3
1.4
0.2
56.5
20.8
551.8

Change
from
Nov 10

22.8
8.5
(26.7)
(144.2)
36.2
(0.4)
0.1
(21.8)
(8.6)
(134.1)

Year to
Date
643.3
367.5
431.9
1,923.7
223.2
27.8
33.2
491.0
52.1
309.4
4,503.1

YTD Change
from FY 10
27.4
26.0
(11.9)
(42.2)
(61.4)
(12.3)
(48.9)
13.1
52.1
(37.0)
(95.1)

11 JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010
Table 8

Agency
Department of Administration
Department of Admin Sale/Leaseback D/S
Office of Administrative Hearings
Department of Agriculture
AHCCCS
Arizona Commission on the Arts
Attorney General
AZ Capital Post Conviction Public
Defender
State Board of Charter Schools
Board of Chiropractic Examiners
Department of Commerce
Community Colleges
Corporation Commission
Department of Corrections
Board of Cosmetology
AZ Criminal Justice Commission
AZ State Schools for the Deaf & Blind
Department of Economic Security
Department of Education
DEMA
Department. of Environmental Quality
DEQ – WQARF
Office of Equal Opportunity
State Board of Equalization
Board of Executive Clemency
Department of Financial Institutions
Department of Fire, Life, Bldg Safety
Office of the State Forrester
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.
Commission on Indian Affairs
Department of Insurance
Judiciary
Supreme Court
Superior Court
Court of Appeals
Department of Juvenile Corrections
State Land Department
Law Enforcement Merit System

General Fund Spending
($ in Thousands)
Change from
November 11
November 10
1,173.2
(491.9)
41.7
(6.6)
446.0
(76.5)
121,351.6
22,762.2
47.8
(14.7)
1,133.5
206.1
46.9
(28.7)
36.2
226.2
36.5
66,916.8
1,033.0
8,231.0
229,064.6
659.4
9.0
29.1
41.4
144.2
123.5
161.2
33.3
25.6
398.1
130.2
47,305.7
165.9
68.0
10.1
300.5

0.9
(864.3)
4.2
8,463.5
(252.0)
675.3
(26,674.9)
(144,182.6)
(98.4)
(349.4)
(18.3)
(17.4)
(6.3)
(39.2)
102.9
161.2
(9.4)
(6.8)
(763.5)
(30.9)
36,165.3
26.2
35.6
(0.7)
(36.5)
(13.1)

481.7
1,287.5
902.9
3,212.5
416.8
5.1

(168.7)
(907.2)
(932.5)
(1,298.6)
(576.9)
(0.4)

Year-to-Date
11,516.3
52,066.9
459.7
4,658.7
643,296.1
325.5
9,233.2
266.3

YTD Change from
FY 10
2,272.8
52,066.9
(54.0)
(229.7)
27,435.2
(6.8)
(697.9)
(35.5)

395.7
2,637.9
66,213.2
256.1
367,543.5
10,079.4
431,896.0
1,923,706.1
4,668.0
0.6
7,000.0
98.9
240.7
469.6
1,427.5
1,339.1
1,362.9
264.0
231.7
3,794.6
969.9
223,232.0
4,029.0
284.8
24.3
2,976.7

18.1
(148.0)
1,012.4
33.3
26,041.0
(252.0)
4.6
462.2
(11,978.7)
(42,202.4)
600.1
(2,557.8)
(11.6)
(96.0)
(80.9)
(323.6)
123.1
1,362.9
(100.0)
(132.5)
11.9
(279.2)
308.5
(61,444.6)
1,663.3
20.4
(25.5)
33.8
(79.6)

12,975.2
36,003.3
7,628.3
27,750.6
1,541.1
35.1

3,124.5
(4,558.4)
755.6
(6,514.5)
(5,890.9)
(2.1)

12 JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2010

Agency
Legislature
Auditor General
House of Representatives
Joint Legislative Budget Comm.
Legislative Council
Senate
Department of Liquor Licenses
Board of Medical Student Loans
Mine Inspector
Department of Mines & Mineral Resources
Nav. Streams & Adjudication
OSHA
Board of Osteopathic Examiners
Arizona State Parks Board
Pioneers’ Home
Board of Psychologist Examiners
Comm. for Postsecondary Ed.
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
Veterinary Medical Examiners Board
Department of Veteran Services
Department of Water Resources
Department of Weights & Measures
Other
Grand Total

November 10

Change from
November 09

1,107.7
711.9
125.5
259.7
487.1
3.3
73.1
18.4
4.9
171.1
25.0
1,434.7
269.4
70.4
1.2
135.9
(434.3)
199.9
1,052.1
16.5
1.4
0

(2.7)
(5.1)
(27.0)
(12.6)
(30.8)
(72.8)
(49.1)
1.3
(18.7)
(0.2)
171.1
25.0
(81.8)
(370.9)
145.4
97.8
0.1
(64.6)
(1,437.9)
122.7
(53.9)
0.2
1.3
(117.8)

419.3
25,400.9
8,551.9
22,135.0
3,253.8
560.6
63.8
42.3
551,829.2

(3,412.9)
(8,295.5)
(2,823.8)
(7,268.9)
2,054.3
(520.7)
(16.0)
(2,723.7)
(134,051.2)

Year-to-Date

YTD Change from
FY 10

8,368.9
5,768.2
1,048.2
2,380.3
4,078.7
3.3
744.1
555.2
744.1
83.6
20,000.0
529.0
25.0
157.7
27,792.9
3,041.1
696.7
5.9
1,615.2
17,978.5
33,150.4
9,434.5
129.8
17.3
0

1,039.7
(38.6)
(78.7)
(287.1)
(46.5)
(732.7)
(223.4)
(78.3)
371.2
3.9
(4.0)
(100.0)
(1,900.3)
529.0
(275.0)
(730.2)
(12,327.4)
(216.7)
(74.6)
0.8
(256.4)
(82.7)
(48,945.7)
5,189.2
(2.3)
(200.0)
(15.5)
(1,296.0)

10,567.7
217,582.0
73,253.1
189,604.2
7,999.4
2,512.0
537.2
(185.1)
4,503,117.6

(3,687.6)
5,652.3
1,911.2
4,936.5
(250.0)
4,389.9
(5,344.7)
(85.0)
(21,542.2)
(95,149.5)