JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

“The state
posted its 14th
consecutive
month of growth
in September as
base General
Fund revenues
(excluding onetime
adjustments)
were 6.5%
above the prior

October 2011

Summary
The state posted its 14th consecutive month of
growth in September as base General Fund
revenues (excluding one-time adjustments)
were 6.5% above the prior year. General
Fund revenue collections totaled
$851.4 million.
September collections were driven by 2
factors. First, sales tax collections were 6.8%
over the prior year, with gains seen in the
retail and contracting categories. Individual
income tax (IIT) collections increased by
11.7%, largely due to an increase in estimated
payments. The upward trend in estimated
payments continues the pattern seen earlier
this year during tax filing season.
Year-to-date, FY 2012 General Fund revenues
are $2.38 billion, or 7.7% above FY 2011
excluding one-time adjustments.
September General Fund collections were
$46.3 million above the enacted budget
forecast. Year-to-date, revenues are $125.9
million above the enacted forecast.
It should be noted, however, that pursuant to
the Revenues Budget Reconciliation Bill (Laws
2011, Chapter 28), the Department of
Revenue (DOR) conducted a tax amnesty
program in September. During the month,
taxpayers who owed money to DOR could
avoid some penalties by voluntarily reporting
and paying the back taxes.
These recovery collections are included with
the regular collections reported in this month’s
revenue section. At this point, there is not an
estimate of how much was collected during
the month, though preliminarily it appears to
be less than the budgeted $22 million.

year.”

In comparison to September revenue of
$851.4 million, September 2011 General Fund
spending was $921.0 million. September
expenditures were $101.2 million higher than
the prior year, primarily due to the transfer of
General Fund monies in order to draw down
matching federal Medicaid funds.
Fiscal year-to-date, General Fund revenues of
$2.38 billion have been offset by $3.74 billion
in spending.
Finance Advisory Committee Summary
At its October 18, 2011 meeting, the Finance
Advisory Committee (FAC) heard
presentations on General Fund Revenue
collections, the U.S. economy, and state cash
flows. JLBC Staff provided members with the
latest 4-sector consensus estimates for the
“Big 3” revenue collections, along with longterm budget projections. Among the key
points:
•

•

•

•

Since the FY 2011 shortfall no longer has
to be paid off with FY 2012 revenues, the
state will likely generate a carry-forward
balance at the end of FY 2012.
Due to economic uncertainty and
pending "budget" litigation, it is difficult to
predict the magnitude of the FY 2012
balance. As a result, the JLBC Staff has
developed 2 different scenarios.
The projected carry-forward balance at
the end of FY 2012 is $130 million in one
scenario and $415 million in a second
scenario. Since the balance is one-time
in nature, using these monies for
permanent revenue or spending
initiatives would increase future year
shortfalls.
After estimating revenue and funding
formula changes for next year, it is not yet
clear whether the FY 2013 budget will be

Table of Contents
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
October 20, 2011.

Summary .................................................................. 1
• Finance Advisory Committee Summary......... 1
September Revenues ............................................ 2
Economic Indicators.............................................. 4
Summary of Recent Agency Reports
• DES – Child Care Expenditures ......................... 6
• DES – Annual TANF Diversion Report .............. 6

• DES - Reimbursement Rates ............................. 6
• DEQ - Water Quality Progress Report .............. 6
• DPS - GIITEM Report ............................................ 6
• DOR - Enforcement Goals Report.................... 7
• Water Resources - Interstate Water Banking . 7

September Spending ............................................. 8

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Summary (Continued)

•

•

in balance or in a shortfall. One model
predicts a $140 million surplus while the
second "slow economy" model would result
in a $(375) million shortfall.
With the expiration of the 1-cent sales tax,
however, we are more likely to incur a
shortfall in FY 2014 under either scenario.
The shortfall is $(600) million in the first
scenario and $(1.2) billion in the second.
3-year budget estimates are highly
speculative and subject to considerable

change. For example, a small revenue
forecast error of 1% across 3 years could
result in a $500 million revision to the
projections in either direction. As a result,
the current FY 2014 estimates will probably
change considerably over the next 3 years.
For the long-term budget projections presented
to the FAC, JLBC Staff developed a Revenue
and Budget Update Summary along with a
Budget Update Slideshow.

September Revenues
Table 1

General Fund Revenues ($ in Millions)

September
Year-to-Date

“[Sales tax]
collections were
$301.5 million, or
6.8% above
September
2010.”

FY 2012
Collections
$ 851.4
$ 2,383.6

Sales Tax collections were $376.0 million, or
7.9% above September 2010. Excluding the
$74.5 million from the temporary 1-cent
increase, collections were $301.5 million, or
6.8% above September 2010. The temporary 1cent tax grew significantly more than the base
tax because last year’s 1-cent collections
reflected a 120-day exemption for purchases
under contract prior to the effective date of
the tax.
Table 2 displays the September growth rates
for the largest categories.
Table 2

Retail
Contracting
Utilities
Use
Restaurant & Bar

Difference
From FY 2011
$ 50.6
$ 274.5

Individual Income Tax net revenues were
$320.7 million in September. Collections were
$25.9 million above forecast. Year-to-date,
revenues have grown 9.8% and are $53.4
million above forecast through September.
As indicated in Table 3, withholding grew by
3.7% in September for a year-to-date increase
of 5.1%. The bulk of the growth above
forecast this month comes from higher than
expected estimated payments, which may
reflect the trend seen last tax season of higher
taxpayer liability.
Given the 18.5% increase in liabilities last year,
taxpayers likely adjusted their level of
September estimated payments upward.

Sales Tax Growth Rates
Compared to Prior Year
September
8.8%
21.9%
1.7%
(9.1)%
3.8%

Difference From
Forecast
$ 46.3
$ 125.9

YTD
8.2%
16.7%
0.7%
6.5%
8.3%

Retail and contracting together account for
about 60% of all sales tax revenues. Retail
continues to post significant gains over the
previous year. Contracting’s large gain this
month follows the trend begun in the second
half of FY 2011, which grew 7.6% over the same
period in the prior year. Despite large gains,
the first quarter of this year is still (19.7)% below
the same quarter in FY 2007, which was the
peak year for contracting.

Table 3

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

September
3.7%
17.3%
(42.0)%

YTD
5.1%
15.6%
(31.3)%

Corporate Income Tax net collections were
$118.9 million in September, which is $1.0 million
above the prior year. Collections were $8.1
million above the forecast.
Year-to-date, collections have grown 24.5%
and are $34.8 million above forecast.

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

September 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.

The Lottery Commission reports that September ticket
sales were $45.0 million, which is $3.8 million, or 9.3%,
above sales in the prior year. Year-to-date ticket sales
are $139.1 million, which is 10.3% above last year’s sales.
Non-General Fund

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 $99.8 million in September were up $1.8
million, or 1.8%, compared to September of last year.
Year-to-date revenues are up 0.3%.

Tobacco Tax revenues were $36.1 million in September.
Collections were up 15.8% compared to the prior year.
Year-to-date collections are up 6.9%, and are $18.0
million above forecast.

Table 4

General Fund Revenue:
Change from Previous Year and Enacted April Budget Forecast
September 2011
Current Month

FY 2012 YTD (Three Months)

Change From
Actual

September 2010

September 2011

Amount

Change from
Actual

Forecast

Percent

Amount

Percent

September 2010

September 2011

Amount

Forecast

Percent

Amount

Percent

Taxes
Sales and Use - Base*
- 1¢ Increase*
Income - Individual
- Corporate
Property
Luxury - Tobacco
Insurance Premium
Estate
Other Taxes

$301,493,454

$19,300,646

$901,905,258

$60,262,811

$74,476,988

8,321,958

12.6

6.8 %

4,863,554

7.0

221,688,217

26,712,033

13.7

14,367,230

6.9

320,700,037

33,702,602

11.7

25,877,488

8.8

858,395,930

76,476,331

9.8

53,364,359

6.6

118,854,052

979,341

0.8

8,128,134

7.3

176,867,994

17,328,234

10.9

34,789,055

24.5

49,469

802,951

17,377

54.1

345,904

848,266

(10.4)

(588,284)

(11.6)

14,823,082

1,938,386

(4,349,879)

(8.6)

121,750,992

--

220,652
138,086

--

4,503,465

(523,843)

46,376,199

(6,938,547)

(13.0)

0

(196)

(100.0)

0

33,008

1,587

$866,486,671

$55,646,498

Lottery

5,457,940

1,170,185

27.3

689,851

License, Fees and Permits

2,190,588

23,477

1.1

251,878

(590,925)

(99.6)

(497,695)

Sub-Total Taxes

5.1

$11,815,735

6.9 %

5,724
$45,769,848

4.1 %

21.0
5.6 %

7.2 %

--

$35,217,421

4.1 %

44,301

14.7

15.0

1,763,926

13.5

(12,975,535)

(9.6)

(13,943,156)

(10.3)

(216,720)

(49.6)

220,652

(25,147)

(15.4)

17,734

$2,296,136,115

$170,348,659

8.0 %

$125,841,522

14.5

10,463,980

1,836,370

21.3

843,175

13.0

6,878,458

(111,994)

(1.6)

190,228

(99.5)

5,624

(1,235,503)

(99.5)

(1.7)

4,063,240

(675,947)

(14.3)

62.1

6,743,067

(1,670,204)

(19.9)

2,966,666

--

0

-14.7
5.8 %

Other Revenue

Interest

2,305

Sales and Services

2,214,686

Other Miscellaneous

2,730,279

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

0

79,942
(1,592,239)
0

112,084

(897,960)

12,707,882

(1,807,520)

$879,194,553

$53,838,978

3.7

(38,492)

(36.8)

1,046,404

--

0

(88.9)

(910,218)

--

0

(89.0)

2,449,298

(1,404,801)
(3,262,079)

(12.5) %

541,728

4.5 %

30,603,667

6.5 %

$46,311,576

5.6 %

$2,326,739,782

0

$167,086,580

(36.4)

8.8
2.8

(1,494,376)

(99.6)

(997,033)

(19.7)

(1,451,574)

78.6
-(37.2)

(9.6) %

57,086

0.2 %

7.7 %

$125,898,608

5.7 %

Other Adjustments
Urban Revenue Sharing
Budget Plan Transfers

(35,368,620)

4,131,923

7,540,777

(7,343,234)

--

0

0.0

(106,105,860)

12,395,769

(49.3)

0

0.0

162,983,678

95,002,973

-139.7

0

0.0

0

0.0

Budget Legislation

0

0

--

0

--

0

0

--

0

--

Leaseback Proceeds

0

0

--

0

--

0

0

--

0

--

13.0 %

0

0.0 %

56,877,818

107,398,742

-- %

0

0.0 %

$851,366,710

$50,627,667

6.3 %

$46,311,576

5.8 %

$2,383,617,600

$274,485,322

13.0 %

$125,898,608

5.6 %

Highway User Revenue Fund

$99,800,534

$1,782,321

1.8 %

$312,048

0.3 %

$298,401,805

$988,962

0.3 %

($3,472,231)

(1.2) %

Tobacco Tax (All Funds Total)

$36,072,099

$4,909,645

15.8 %

$10,270,715

39.8 %

$99,739,225

$6,402,595

6.9 %

$17,976,106

22.0 %

Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(27,827,843)

(3,211,311)

Non-General Funds

__________
* Total September collections including the temporary 1¢ increase approved by the voters in May 2010 were $376.0 million. This amount is $27.6 million, or 7.9%, above September 2010 and $16.7 million, or 4.6%, above
forecast. Year to date, total collections including the 1¢ increase were $1,123.6 million. This amount is $87.0 million, or 8.4%, above September 2010 and $49.6 million above forecast.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Economic Indicators
NATIONAL

“The consumer
confidence index
is currently close
to (25)% below
the reading in
July and appears
to have fallen
back to
recession levels.”

The Conference Board’s U.S. Consumer
Confidence Index inched up 0.2 points, or
0.4%, in September to 45.4. The consumer
confidence index is currently close to (25)%
below the reading in July and appears to have
fallen back to recession levels. The slight uptick
in September was attributable to a marginally
better employment outlook than in the
previous month. The September Survey,
however, did not reflect the events in Europe
and the sharp decline in global equity markets
that occurred in the latter part of the month,
as those occurred after the survey cutoff date.
Weak consumer confidence does not bode
well for consumer spending and upcoming
holiday retail sales.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), increased by 0.3%
in September, less than the gains of 0.5% in July
and 0.4% in August. The CPI increase was
primarily due to higher gasoline and food
prices. Compared to the same month in the
prior year, consumer prices were up by 3.9%.
This was the sixth consecutive month with a
year-over-year CPI gain in excess of 3%. Core
inflation, which excludes energy and food
prices, increased by 0.1%. Year-over-year,
core inflation is up by 2.0%.

ARIZONA
Housing
In September, the number of new Maricopa
County foreclosure notices decreased (14.6)%
from August levels to 4,544. The number of
Maricopa County pending foreclosures
decreased from 23,752 in August to 23,299 in
September. The September total is (54.7)%
below the peak in December 2009 (51,466).
See Tracking Arizona’s Recovery for additional
historical information.
While 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 September, there were a
total of 7,940 existing single-family home
sales that resulted in a median resale home
price of $125,000. Relative to the prior year,
the number of sales is down (11.8)%, while
prices are (8.8)% lower. Of the existing sales,
28.9%, or 2,295 were foreclosures.

State Agency Data
The FY 2012 budget included significant
changes to the eligibility of several AHCCCS
populations for services. Because of these
changes, the economic indicators section will
now include an expanded report of AHCCCS
caseloads across several populations.
In October, total AHCCCS caseloads equaled
1.37 million members, a (0.7)% decrease over
the prior month. Overall AHCCCS caseloads
are currently 1.8% above October 2010 levels.
In terms of specific categories, the spend
down and the KidsCare populations saw
significant declines from the prior year of
(93.0)% and (42.8)%, respectively. These
declines are due to enrollment freezes for the
programs. The spend down program has
been frozen since May 2011 while the
KidsCare program has had an enrollment
freeze since January 2010. The Proposition
204 childless adult category has declined
(12.7)% from the prior month as new
enrollment under this category stopped in
early July. Some of this decline results from
members being transferred to other Medicaid
categories. Since July 1, AHCCCS reports that
9,549 Proposition 204 childless adult members
were transferred to the SSI program.
There were 37,798 TANF recipients in the state
in September, a negligible caseload increase
over the prior month. Year-over-year, the
number of TANF recipients has declined by
(12.7)%. This decline is the result of changes to
the statutory lifetime limit a person may
receive cash assistance. The FY 2011 budget
reduced the lifetime limit to 36 months. The FY
2012 budget further reduces this limit to 24
months. Previously, the maximum had been
60 months. The FY 2012 budget assumed
caseloads of approximately 36,000 in FY 2012.
The Supplemental Nutrition Assistance
Program (SNAP), formerly known as Food
Stamps, provides assistance to low-income
households to purchase food. In September,
there were a total 1.1 million food stamp
recipients in the state, a 0.7% increase over
the prior month. Compared to the same
month last year, food stamp participation was
up by 8.3%. The number of food stamp
recipients began increasing steadily in July
2007, after several years in the 550,000 to
575,000 range.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Economic Indicators

(Continued)

The 3-month average count of the Department of
Correction’s (ADC) inmate population decreased to
40,095 inmates between July and September 2011.

Relative to the prior 3-month period, the population has
decreased by (51) inmates. Compared to a year ago
the population has declined by (215) inmates.

Table 5

ECONOMIC INDICATORS
Indicator
Arizona
- Unemployment Rate (SA)
- 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-family
Multi-unit
- Greater Phoenix Existing Home Sales
Single-Family
Townhouse/Condominium
- Greater Phoenix Median Resale Home 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)
- Greater Phoenix Total Housing Inventory, (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
Acute Care Traditional
Spend Down
Prop 204 Childless Adults
Other Prop 204
Kids Care
Long-Term Care – Elderly & DD
Emergency Services
- 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)
*Adjusted for 1¢ sales tax

Time Period

Current Value

Change From
Prior Period

Change From
Prior Year

August
August
June
August
August
August
August
Jul-Sep
Jul-Sep

9.3%
27,959
69,087
2.39 million
151,300
113,700
40.5
$38.3 million
$137.2 million

(0.1)%
(9.3)%
2.1%
2.3%
0.1%
0.9%
2.8%
4.2%
(3.4)%

(0.6)%
(7.7)%
(21.3)%
1.7%
2.6%
1.3%
2.0%
16.7%*
8.2%*

Jun-Aug
Jun-Aug

1,004
368

3.6%
54.6%

9.7%
347.0%

September
September

7,940
1,155

(14.2)%
(9.4)%

(11.8)%
(15.1)%

September
September

$125,000
$76,700

2.1%
(2.7)%

(8.8)%
(11.5)%

September
September
July

4,544
23,299
100.54

(14.6)%
(1.9)%
(0.1)%

(39.4)%
(43.2)%
(8.8)%

August
August
July

26,983
3.41 million
$5.90

(2.5)%
(6.0)%
(5.4)%

(39.1)%
8.9%
(6.2)%

3rd Quarter 2011
August
2nd Quarter 2011
April 1, 2010
September

September
September
Aug-Oct

54.0
178.15
$232.8 billion
6.39 million
1,378,004
892,199
1,553
206,478
159,243
15,752
51,418
51,361
37,798
1,150,059
40,095

4.0%
0.4%
1.2%
N/A
(0.4)%
0.7%
(45.3)%
(4.9)%
0.0%
(5.5)%
0.1%
3.2%
0.0%
0.7%
(51) inmates

10.0%
1.7%
5.5%
N/A
2.0%
5.3%
(73.7)%
(5.8)%
4.6%
(42.4)%
2.0%
6.0%
(12.7)%
8.3%
(215) inmates

August/June
August/June

18,977
26,051

70
(67)

(737)
(969)

2nd Quarter 2011
(3rd Estimate)
September
August
Jun-Aug
September

$13.3 trillion

1.3%

1.6%

45.4
116.2
$4.56 billion
226.96

0.4%
0.3%
(1.6)%
0.3%

(6.6)%
6.5%
(5.3)%
3.9%

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Summary of Recent Agency Reports
Department of Economic Security - Report on
Annual Child Care Expenditures - A.R.S. § 46810 requires the Department of Economic
Security (DES) to provide an annual child care
report to the Committee. The FY 2011 report
shows that the average number of children
served decreased to 29,559, or (11.4)% below
FY 2010; the number of families served
decreased by (12.5)%. Across categories, the
number of children served in the Low Income
Working category decreased (27.6)%, CPSrelated placements increased by 18.3%, and
the number of Temporary Assistance for
Needy Families-related children decreased
by (11.2)%, while the number of children
receiving transitional child care increased by
20.5%.
The amount spent by DES on child care
subsidies decreased to $122.5 million, or (10)%
below FY 2010.
The average monthly subsidy paid per child
increased 1.5% to $345.52. The total amount
of co-payments decreased (22.7)% from
FY 2010 to $8.2 million. (Benjamin F. Beutler)
Department of Economic Security - Annual
Report on Temporary Assistance for Needy
Families (TANF) Grant Diversion Program Pursuant to A.R.S. § 46-298, the Department of
Economic Security (DES) has provided the
2011 annual report on the TANF Grant
Diversion Program. The program’s purpose is
to divert applicants from long-term TANF cash
assistance by offering immediate, one-time
assistance to resolve a financial crisis. In
FY 2011, 22,196 applicant households chose
the grant diversion option and were diverted
from long-term assistance. A total of 6,254
households obtained employment within 90
days of receiving assistance under the
diversion program in FY 2011. Through
January 2011, the most recent month for
which data is available, 1,095 households
reapplied for long-term assistance within 180
days of their participation in the diversion
program. Complete data for FY 2010
indicates 904 households of the total 9,276
households receiving diversion payments
reapplied within 180 days.
(Benjamin F. Beutler)
Department of Economic Security - Report on
Reimbursement Rates for Developmental
Disabilities Programs - Pursuant to A.R.S. § 36-

2959, the Department of Economic Security
(DES) has provided its annual study of
Medicaid reimbursement rates to service
providers in the developmentally disabled
(DD) program. The study states that despite
the previous (10)% provider rate reduction,
the provider network continues to meet the
tests of sufficiency in providing the number,
mix, and distribution of providers of services.
The study also notes that the number of
services provided match the growth in the DD
population. It does not recommend an
inflationary increase. (Amy Upston)
Department of Environmental Quality (DEQ) –
Report on Progress of Water Quality
Assurance Revolving Fund Sites – Pursuant to
a General Appropriation Act footnote, DEQ is
required to report the status of each site listed
on the Water Quality Assurance Revolving
Fund (WQARF) registry sites.
There are 10 steps in the WQARF process,
beginning with a preliminary investigation,
continuing through various studies and
remediation once a site has been placed on
the registry, and ending with the de-listing of a
site once the investigation or cleanup has
been completed.
The FY 2011 report contained a listing of the
35 WQARF sites on the registry. Progress goals
were met at 25 of these sites. Of the 35
reported sites, 13 were listed in the Early
Response Action phase at least partially
during FY 2011. Five sites had advanced to
the Implementation of Remedy Phase or
further during this same period.
There are currently no sites the department
estimates would be de-listed by the end of
FY 2011. (James Alcantar)
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). Through the
fourth quarter of FY 2011, DPS spent or
encumbered $8.6 million of the $9.2 million
appropriation for the direct DPS immigration
staff. In terms of local law enforcement
grants, DPS spent $2.3 million of the nonlapsing FY 2010 $2.6 million appropriation and
$885,300 of the $2.6 million FY 2011

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Summary of Recent Agency Reports
appropriation for a total of $3.2 million. The
remaining $1.7 million in FY 2011 local law
enforcement grants will be available for use
through FY 2012.
The $3.2 million has been distributed as follows
in Table 6:
Table 6

FY 2011 GIITEM Local Illegal Immigration
Enforcement Grant Expenditures
State Organization
Maricopa County Sheriff
Pima County Sheriff
Phoenix Police Department
Other Agencies
Support
Total

$1,600,000
825,400
584,400
179,000
28,800
$3,217,600

(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 2012 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
2011.
In FY 2011, DOR’s enforcement goal was
$360.9 million, but they actually collected
$374.0 million.
DOR’s General Fund FY 2012 revenue
enforcement goal is $395.2 million, which is
$21.2 million, or 5.7%, above FY 2011 actual
collections. According to DOR, these targets
are based on the assumption that they will
not experience further budget reductions.
Compared to actual FY 2011 General Fund
enforcement revenue, DOR’s FY 2012 goals
consist of:
•
•
•

An increase in audit revenue of $14.8
million, or 13.0%.
An increase in collections revenue of $5.7
million, or 3.5%.
An increase in accounts receivables
revenues of $600,000, or 0.6%.

(Continued)

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)
Department of Water Resources – Report on
Interstate Water Banking – Pursuant to A.R.S. §
45-2473, the Department of Water Resources
has submitted a report accounting for all
monies received through the Interstate Water
Banking Agreement with Nevada and other
obligations.
In 2001, the Southern Nevada Water Authority
(SNWA) agreed to pay the Arizona Water
Banking Authority (AWBA) $230 million for
delivery and storage, if available, of 1.25
million acre-feet of unused Arizona water.
Equal payments of $23 million per year from
Nevada to the AWBA were to begin in 2009
and continue through 2018. Pursuant to the
2009 modified agreement, and because no
Arizona water was available to be stored in FY
2009, the payment of $23 million was delayed
upon SNWA’s request. A December 2010
agreement revised the payment schedule to
begin in 2015.
In FY 2010, AWBA received $12.7 million from
SNWA to bank water from Nevada’s unused
Colorado River allocation. In FY 2011, AWBA
banked 19,000 acre-feet of storage credits at
a cost of $3.8 million. This amount was paid
from the $12.7 million received in FY 2010. The
FY 2011 subaccount ending balance was
$18,100.
In 2004, SNWA agreed to pay an additional
$100 million to AWBA in exchange for a
guarantee that the 1.25 million storage credits
would be available for Nevada. If the
additional $100 million is not needed to
guarantee the credits in the short term,
Arizona may use this amount for its own
purposes, subject to legislative appropriation.
AWBA received the $100 million from SNWA in
2 installments in 2005, which were deposited
in a subaccount with the State Treasurer. Of
this amount, approximately $80 million has
been used to bank 541,418 acre-feet of

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Summary of Recent Agency Reports
storage credits for Nevada. The remaining
$20 million has been transferred to the
General Fund, including $11.1 million as part
of the mid-year FY 2010 budget revisions. The
FY 2011 subaccount ending balance was
approximately $5,100.

(Continued)

In total, the AWBA has banked 600,651 acrefeet of storage credits, or 48% of the 1.25
million credits guaranteed to Nevada. The
combined FY 2011 ending balance was
approximately $23,200. (Brett Searle)

September Spending
September 2011 General Fund spending was
$921.0 million. September expenditures were
$101.2 million higher than the prior year
primarily due to a transfer of General Fund
monies in order to draw down matching
federal Medicaid monies.
FY 2012 Spending
September 2011 spending of $921.0 million
was $101.2 million higher than September
2010 (See Table 7).

•

General Fund monies in order to draw
down federal Medicaid matching funds.

•

The Department of Economic Security
spending was $8.0 million in September,
which is a decrease of $(25.4) million from
the prior year. The lower expenditure
amount reflects operating transfers
among agency funds and does not
reflect actual expenditures.

The Department of Health Services spent
$159.0 million in September, which is
$153.3 million more than the previous
year. This increase is due to the transfer of

Table 7

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

General Fund Spending ($ in Millions)

Sept 11

Change
from
Sept 10

Year-toDate

$ 132.4
69.1
8.0

$ 10.6
6.7
(25.4)

$ 440.4
249.5
364.3

$ 9.8
32.2
12.5

276.3
159.0
1.9
0.1

(32.4)
153.3
(0.5)
(0.1)

1,604.3
395.4
24.5
132.6

3.1
272.2
0.3
99.7

245.4
0.0

(9.8)
0.0

331.8
49.1

(38.6)
(3.0)

28.8
$ 921.0

(1.2)
$ 101.2

145.9
$ 3,737.8

(54.3)
$ 333.9

YTD Change
from FY 11

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Table 8

Agency
Department of Administration
Department of Admin Sale/Leaseback D/S
Office of Administrative Hearings
Department of Agriculture
AHCCCS
Attorney General
AZ Capital Post Conviction Public
Defender
State Board of Charter Schools
Department of Commerce/AZ Commerce
Authority
Community Colleges
Corporation Commission
Department of Corrections
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 Forester
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
Legislature
Auditor General
House of Representatives
Joint Legislative Budget Comm.

General Fund Spending
($ in Thousands)
Change from
September 11
September 10
2,547.0
1,597.3
72.1
63.9
553.1
98.8
132,441.9
10,565.3
677.3
(354.7)

Year-to-Date
7,699.1
49,050.7
213.6
2,403.9
440,421.9
5,425.2
136.4
228.8
7,875.0

YTD Change from
FY 11
(1,711.0)
(3,016.2)
(66.7)
(1,317.2)
9,775.1
1,867.0

37.3
53.2
2,625.0

(11.8)
13.6
532.4

46.7
69,135.5
1,492.5
8,015.1
276,264.5
571.1
10.8
41.0
131.6
193.6
15.9
182.0
43.7
(3.1)
490.5
151.7
159,010.3
568.2
43.7
311.8
3.0
328.5

10.2
6,722.4
(547.7)
(25,404.7)
(32,406.1)
(538.8)
0.6
(7,000.0)
2.4
(11.5)
96.8
(332.0)
(595.1)
105.6
24.9
(30.9)
59.0
(87.5)
153,277.8
285.1
10.0
311.8
1.9
32.9

877.4
775.3
859.5
3,073.3
28.2
4.4

579.4
(431.5)
586.2
(391.7)
25.7
(2.7)

4,116.8
18,237.8
3,754.7
13,078.7
186.1
12.0

(8,412.8)
924.8
(1,442.4)
(7,885.3)
(582.1)
(13.0)

1,292.9
828.1
135.2

198.6
(10.2)
(23.3)

4,626.3
2,959.8
529.8

(1,499.1)
309.2
(270.6)

17,144.3
135.6
249,516.1
6,467.6
364,264.5
1,604,285.5
3,079.8
7,000.0
38.9
192.7
262.0
805.7
523.6
803.2
152.1
(3.1)
1,600.6
490.4
395,374.8
1,142.5
153.4
927.9
11.7
1,500.9

(30.3)
9.7
5,531.7
(15,962.3)
(44.0)
32,183.5
888.8
12,517.6
3,093.2
(179.1)
(0.6)
(19.9)
52.6
(118.9)
(324.3)
311.0
82.1
53.5
(152.4)
(756.9)
(61.2)
272,155.8
(2,264.1)
32.8
927.9
0.1
(822.0)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2011

Agency
Legislative Council
Senate
Board of Medical Student Loans
Mine Inspector
Department of Mines & Mineral Resources
Nav. Streams & Adjudication
OSHA
Arizona State Parks Board
Pioneers’ Home
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
Department of Transportation
State Treasurer
Universities
Board of Regents
Arizona State University
Northern Arizona University
University of Arizona
Department of Veteran Services
Department of Water Resources
Department of Weights & Measures
Other
Grand Total

September 11
311.8
595.9
70.4
10.3
610.4
1,839.1
1,873.9
16.3
148.2
4,589.6
72.3
660.1
5.7
3.4
62.4
950.2
112,156.8
36,442.0
95,802.4
339.7
466.7
72.9
(0.1)
921,030.1

Change from
September 10
81.4
(82.5)
(63.7)
27.7
(597.4)
(32.8)
(74.7)
452.7
(466.1)
(67.4)
16.3
(1.2)
(27.6)
3,484.0
(52.3)
(467.9)
(14.3)
2.8
(5.4)
666.3
(2,615.7)
(2,603.3)
(5,261.7)
2,002.9
46.4
(7.7)
(118.3)
101,242.8

Year-to-Date
1,881.4
2,023.6
358.4
59.1
655.8
610.4
24,534.9
2,293.0
407.3
805.7
16,534.8
132,623.6
2,835.2
78.4
10.6
98.4
5,852.4
148,083.5
48,336.5
129,547.5
1,349.5
1,612.3
264.3
126.9
3,737,810.8

YTD Change from
FY 11
49.2
(1,092.0)
(191.8)
(54.8)
(708.5)
3.0
(20,000.0)
374.8
452.7
253.8
(327.7)
10.4
(3.6)
(542.3)
5,213.9
99,738.2
(3,117.5)
(19.4)
(1.5)
(20.8)
79.5
(15,078.7)
(7,812.7)
(15,786.6)
(584.4)
(42.2)
35.1
(79.5)
333,888.6