JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

“October
continued the
state’s trend of
revenue growth
as base General
Fund collections
(excluding onetime
adjustments)
grew for the 15th
consecutive

November 2011

Summary
October continued the state’s trend of
revenue growth as base General Fund
collections (excluding one-time adjustments)
grew for the 15th consecutive month and
were 16.6% above the prior year. General
Fund revenues totaled $667.7 million.
The significant increase in October collections
was driven by growth in the individual income
tax category, with that segment of revenues
posting a 29.9% gain in October. Because
October 15 is the deadline to file individual
returns under an extension, this increase
continues the pattern of higher final tax
payments that was seen in the April tax
season.
Year-to-date, FY 2012 General Fund revenues
are $3.05 billion, or 9.6% above FY 2011
excluding one-time adjustments.
October General Fund collections were $49.5
million above the enacted budget forecast.
Year-to-date, revenues are $174.7 million
above the enacted forecast.
In comparison to October revenue of $667.7
million, October 2011 General Fund spending
was $458.7 million. This was $(88.7) million less
than the prior year, largely due to budget
reductions and changes in the timing of
transfers for the Medicaid state match.
Fiscal year-to-date, General Fund revenues of
$3.05 billion have been offset by $4.20 billion
in spending.

State Funds Report
On November 1, JLBC Staff published the
biennial state funds report. Statute requires
that every 2 years, JLBC Staff recommend the
elimination of not more than 7% of the total
number of state funds and the conversion of
not more than 7% of the total dollar value of
non-appropriated funds to appropriated
status.
In terms of the elimination of funds, JLBC Staff
recommend the elimination of 90 funds based
on state agency feedback regarding funds
that are inactive or obsolete for other reasons.
Regarding changing the status of nonappropriated funds, the report included a list
of all non-appropriated funds with projected
spending of greater than $20 million in FY
2012. These funds constitute about 98% of
overall non-appropriated expenditures.
Since FY 2000, the proportion of the total
funds budget appropriated by the Legislature
has fallen from 56% to 42%. The number of
separate dedicated funds also continues to
grow over time. During the last 10 years, the
number of separately tracked dedicated
funds has expanded from 520 in FY 2002 to
631 in FY 2012. Of the 111 net new funds, 24
are appropriated and 87 are nonappropriated.
Given the recent trend of declining legislative
oversight of funds, the JLBC Staff noted that
the Legislature may want to reconsider
continuation of this reporting requirement.

month and were
16.6% above the

Table of Contents

prior year.”

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
November 18, 2011.

Summary ..................................................................1

• Commerce Authority – Annual Report ........... 7

• State Funds Report..............................................1

• Comm. Colleges – Dual Enrollment................. 8

October Revenues..................................................2

• Corrections – Transition Release Program ...... 8

Economic Indicators ..............................................4

• DPS – GIITEM ....................................................... 8

JCCR Meeting..........................................................7

• Judiciary – Report on Probation Services ...... 8

Summary of Recent Agency Reports

• Universities – Research Infrastructure .............. 8

• ADOA – Motor Vehicle Fleet.............................7

October Spending.................................................. 9

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

October Revenues
Table 1

October
Year-to-Date

“Individual
Income Tax
net revenues
were $264.7
million in
October, or
29.9% above
the prior year.
Collections
were $54.8

General Fund Revenues ($ in Millions)
FY 2012
Collections
$ 667.7
$ 3,050.7

Sales Tax collections were $378.7 million, or
8.7% above October 2010 and $20.7 million
above forecast. Excluding the $74.7 million
from the temporary 1-cent increase,
collections were $304.0 million, or 7.7% above
October 2010. The temporary 1-cent tax grew
significantly more than the base tax because
last year’s 1-cent collections reflected a 120day exemption for purchases under contract
prior to the effective date of the tax.
Year-to-date, base sales tax collections are
7.3% above the prior year and are $51.0 million
above forecast.
Table 2 displays the October growth rates for
the largest categories.

million above
Table 2

forecast.”

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Utilities
Use
Restaurant & Bar

October
7.8%
15.5%
6.3%
12.2%
8.2%

YTD
8.1%
16.4%
2.2%
7.7%
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,
year-to-date revenues are still (19.6)% below
the same period in FY 2007, which was the
peak year for contracting.
Individual Income Tax net revenues were
$264.7 million in October, or 29.9% above the
prior year. Collections were $54.8 million
above forecast. Year-to-date, revenues have
grown 13.9% and are $108.2 million above
forecast through October.

Difference From
Forecast
$ 49.5
$ 174.7

Difference
From FY 2011
$ 102.7
$ 376.5

As indicated in Table 3, withholding grew by
7.9% in October for a year-to-date increase of
5.8%. While the withholding increase is
significant, two-thirds of the overall Individual
Income Tax increase this month was due to
lower refunds and higher final payments.
October 15 is the deadline to file individual
returns under an extension. This increase
reflects the trend seen last tax season of
higher taxpayer liability.
Table 3

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

October
7.9%
33.2%
(31.1)%

YTD
5.8%
20.0%
(31.2)%

Corporate Income Tax net collections were
$25.3 million in October, which is $5.4 million
above the prior year. Collections were
$501,700 above the forecast.
Year-to-date, collections have grown 12.7%
and are $35.3 million above forecast.
Tax Amnesty – Pursuant to Laws 2011, Chapter
28, the Department of Revenue operated a
Tax Recovery program between September 1
and October 1. During that period, taxpayers
who owed money to DOR could avoid some
penalties by voluntarily reporting and paying
the back taxes. These recovery collections
are reported with the regular collections for
each category. At this time, there is not an
estimate of the distribution of collections by
category.
The Lottery Commission reports that October
ticket sales were $48.5 million, which is $5.0
million, or 11.5%, above sales in the prior year.
Year-to-date ticket sales are $187.5 million,
which is 10.7% above last year’s sales.

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

October Revenues (Continued)
programs, along with funding the Early Childhood
Development and Health Board.

Non-General Fund
Tobacco Tax revenues were $26.4 million in October.
Collections were up 1.9% compared to the prior year.
Year-to-date collections are up 2.4%, and are $3.2
million above forecast.

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 $97.0 million in October were up $114,263,
or 0.1%, compared to October of last year. Year-todate revenues are up 0.3%.

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

Table 4

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

FY 2012 YTD (Four Months)

Change From
October 2010

Actual
October 2011

Percent

Amount

Change from
Forecast
Percent

Amount

October 2010

Actual
October 2011

Forecast
Percent

Amount

Percent

Amount

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

$303,972,395

$21,794,407

$1,205,877,653

$82,057,218

$74,682,481

8,404,092

12.7

4,933,114

7.1

296,370,698

35,116,125

13.4

19,300,344

7.0

264,736,993

60,912,771

29.9

54,814,520

26.1

1,123,132,923

137,389,102

13.9

108,178,879

10.7

25,252,509

5,392,064

2,179,303
(697,522)

(462,917)

$15,756,876

5.5 %

7.3 %

$50,974,297

4.4 %

27.1

501,659

2.0

202,120,503

22,720,298

12.7

35,290,714

21.2

(17.5)

211,998

10.8

2,525,207

385,349

18.0

256,299

11.3

6,006,883

(2,034,406)

(25.3)

(2,077,077)

3,096,276

867,385

38.9

816,196

35.8

10,530,787

2,294,326

27.9

2,105,169

25.0

1,490,142

(446,054)

(23.0)

(983,831)

(39.8)

123,241,134

(13,421,589)

(9.8)

(14,926,987)

(10.8)

--

220,825

(216,547)

(49.5)

220,825

(20.1)

189,215

(30,352)

(13.8)

4,857

173
51,129
$674,763,879

(1,861,687)

7.7 %

173
(5,205)
$94,595,029

--

-(9.2)
16.3 %

(1,867,864)

173
(12,877)
$74,169,964

--

12.3 %

$2,970,215,827

$264,259,524

1,558,955

9.8 %

$199,327,319

(25.7)

-2.6
7.2 %

Other Revenue
Lottery

4,051,240

(277,415)

(6.4)

(19.9)

14,515,220

12.0

(164,787)

License, Fees and Permits

2,273,613

(83,182)

(3.5)

165,472

7.8

9,152,071

(195,176)

(2.1)

355,700

17,556

(418,318)

(96.0)

(482,444)

(96.5)

23,180

(1,653,821)

(98.6)

(1,976,820)

(98.8)

(736,277)

(11.9)

(1,368,844)

(20.1)

29.5

6,443,032

91.8

Interest
Sales and Services

1,368,293

Other Miscellaneous

6,719,022

4,740,792

0

0

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

(302,795)

(60,330)

(489,897)

(4.2)
239.6
---

14,126,929

3,411,650

31.8 %

$688,890,808

$98,006,679

16.6 %

(1,007,962)

(371,811)
3,476,366
0
(4,486,768)
(2,707,147)
$71,462,817

(21.4)

5,431,533

107.2

13,462,089

3,070,588

--

0

0

--

2,146,503

(1,894,698)

-(46.9)

(16.1) %

44,730,596

149,571

0.3 %

11.6 %

$3,014,946,423

$264,409,095

9.6 %

(1.1)
4.0

0
(5,938,342)
(2,650,061)
$196,677,258

-(73.5)
(5.6) %
7.0 %

Other Adjustments
Urban Revenue Sharing
Budget Plan Transfers

(35,368,620)

4,131,923

--

14,215,306

528,212

Tax Amnesty **

0

0

--

Leaseback Proceeds

0

0

--

4,660,135

-- %

$667,737,494

$102,666,814

18.2 %

Highway User Revenue Fund

$96,999,533

$114,263

0.1 %

Tobacco Tax (All Funds Total)

$26,366,849

$483,539

1.9 %

Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(21,153,314)

3.9

0

0.0

(141,474,480)

16,527,692

0

0.0

177,198,984

95,531,185

(100.0)

0

0

--

--

0

0

--

(22,000,000)
0
(22,000,000)
$49,462,817

-117.0

0

0.0

0

0.0

(22,000,000)

(100.0)

0
(22,000,000)

--

-- %

35,724,504

112,058,877

-- %

8.0 %

$3,050,670,927

$376,467,972

14.1 %

(1.4) %

$395,401,338

$1,103,225

0.3 %

($4,811,247)

(1.2) %

1.6 %

$110,881,881

$2,611,959

2.4 %

$3,176,918

2.9 %

$174,677,258

(38.1) %
6.1 %

Non-General Funds
($1,339,016)
$425,005

__________
* Total October collections including the temporary 1¢ increase approved by the voters in May 2010 were $378.7 million. This amount is $30.2 million, or 8.7%, above October 2010 and $20.7 million, or 5.8%, above
forecast. Year to date, total collections including the 1¢ increase were $1,502.2 million. This amount is $117.2 million, or 8.5%, above October 2010 and $70.3 million above forecast.
** The Budget Legislation forecast includes $22 million of Tax Recovery Collection in October. The actual collections are reported in the individual categories above and not in the Budget Legislation line at this time as
the actual distribution and total are not yet known.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

Economic Indicators
NATIONAL

“[The Consumer
Confidence
survey indicated]
people are
becoming
increasingly
more pessimistic
about their
financial and
economic
prospects. This
explains why
consumer

The Conference Board’s U.S. Consumer
Confidence Index declined by (6.6) points in
October, to a reading of 39.8, the lowest level
since March 2009. The steep decline in
consumer confidence was likely in response to
the European debt problems and continued
volatility in equity markets. Additionally, the
survey also indicated that people are
becoming increasingly more pessimistic about
their financial and economic prospects. This
explains why consumer confidence has fallen
by more than 35% since the beginning of the
summer. This deterioration in consumer
sentiments, however, has not yet resulted in a
pullback in consumer spending and retail sales.
This appears to be less related to consumer
confidence, however, than a necessity to
replace aging durables, such as autos and
home appliances.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), declined by (0.1)%
in October, following 3 consecutive months
with price increases of 0.3% or more. The CPI
decrease in October was due to lower energy
prices, especially for gasoline. While food
prices rose by 0.1%, the increase was
nonetheless the smallest since December 2010.
Compared to the same month in the prior
year, consumer prices were up by 3.6%. Core
inflation, which excludes energy and food
prices, increased by 0.1% in October. Yearover-year, core inflation is up by 2.1%.

confidence has

ARIZONA

fallen by more

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.

than 35% since
the beginning of
the summer.”

Arizona was 1 of 30 states for which the
coincident index increased in September. The
Arizona coincident index increased by 0.3% in
September, which was 0.1% above the
national average. Year over year, the Arizona
index is 2.1% above last year.
While Arizona's index has improved compared
to the same time period last year, the index
remains (12.8)% below its peak reading in
August 2007. Only 4 other states (Florida,
Idaho, Michigan, and Nevada) have had a
larger decline than Arizona. By way of

comparison, the national coincident index has
declined (4.0)% since its historical peak in
January 2008. See Tracking Arizona’s Recovery
for additional historical information.
Housing
In October, the number of new Maricopa
County foreclosure notices decreased (4.2)%
from September levels to 4,354. The number
of Maricopa County pending foreclosures
decreased from 23,299 in September to
22,901 in October. The October total is
(55.5)% 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 October, there were a total
of 7,215 existing single-family home sales that
resulted in a median resale home price of
$124,900. Relative to the prior year, the
number of sales is down (10.7)%, while prices
are (9.9)% lower.
Of the existing sales, 26.3%, or 1,900 were
foreclosures. This is a significant improvement
from the peak in February 2009 when 50.5% of
existing home sales were foreclosures. There
are indications, however, that lenders are
increasingly agreeing to short sales rather
than foreclosing properties. This suggests that
the housing market is still weighed down by a
large volume of distressed sales, and
therefore may not return to normal conditions
for some time.
In terms of permitting activity in the state, it
appears that single-family housing permits will
decline for the sixth consecutive year in 2011.
Through September, a total of 8,051 singlefamily building permits had been issued
statewide, a (7.3)% decrease from last year.
By contrast, the multi-family housing sector
appears to be poised for significant growth in
2011. As of September, multi-family building
permits for a total of 1,895 units had been
issued in the state, an almost 67% increase
from the prior year. While this percentage
increase is impressive, it bears to note that in
terms of the actual volume, multi-family
permitting activity still remains 70% below the
levels recorded 3 years earlier.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

Economic Indicators

(Continued)

Employment
According to the Employment and Population Statistics
Unit (EPSU) of the Department of Administration, the
state added 15,500 nonfarm jobs in October over
September. This was a month-over-month gain of 0.6%,
the same as the average growth rate for October over
the prior 10 years. Most of these gains (82%) occurred in
the private sector of the economy, with most of these
gains being concentrated to the health care (3,500
jobs) and trade (2,100 jobs) industries.
In October, the state’s employers had 44,700, or 1.9%,
more individuals on the payrolls than 12 months earlier.
October marked the 10th straight month with year-overyear gains in employment. The 1.9% growth in October
followed job gains of 2.3% in September and 1.7% in
August. The average nonfarm employment gain for the
first 10 months of 2011 was 0.8%, or 19,400 jobs.
The construction sector added 2,300 net new jobs in
October over September. This represented a monthover-month gain of 2.0%. Typically, the construction
sector sheds jobs in October, as evident by a 10-year
average loss of (0.5)% for this month. October marked
the eighth consecutive month with gains in construction
employment. Year over year, construction employment
is up by 4.0%, or 4,600 jobs. In spite of this improvement
in the construction sector, it should be noted that with
118,600 employees currently on the payrolls, this industry
still remains more than 50% below peak employment
levels in the summer of 2006.
The manufacturing industry had a net gain of 600 jobs in
October, with most of these gains coming from the
fabricated metal industry. The manufacturing sector
added jobs in 7 of the last 10 months. Compared to
October 2010, manufacturing employment has grown
by 3.2%, or 4,700 jobs. This was the highest year-overyear gain since May 2006. All sub-sectors of the industry
except for aerospace are expanding their payrolls.
While nonfarm employment in Arizona has grown faster,
year over year, than the national average in the prior 4
months, it is important to note that the state’s job gains
remain small by historical standards. As noted above,
the state had an average monthly gain of 19,400 jobs
for the first 10 months of the current calendar year. With
283,400 jobs below pre-recession levels, and still modest
job gains, the state appears to be years away from
recovering the jobs lost since the end of 2007. See
Tracking Arizona’s Recovery for additional historical
information.
The state’s seasonally adjusted unemployment rate was
9.0% in October, a (0.1)% decline from the previous
month and the lowest reading since March 2009.
October marked the 32nd consecutive month with an
unemployment rate at or above 9%. At the start of the

recession in December 2007, the state’s unemployment
rate was 4.1%, or (0.9)% below the national average.
Since this time, Arizona’s jobless rate has equaled or
exceeded the national average in 41 out of 46 months.
State Agency Data
In November, total AHCCCS caseloads equaled 1.35
million members, a (1.0)% decrease over the prior
month. Overall AHCCCS caseloads are currently (0.3)%
below November 2010 levels.
The traditional AHCCCS population, which consists
primarily of lower-income children and their parents, was
up 0.2% in October and 5.2% higher than a year ago.
The total population in this program is almost 900,000.
This growth has been offset by declines in other
populations. The Proposition 204 childless adult program
has not allowed new participants since July and this
population has declined (40,138) since July 1 to 177,580.
Of the decline, (9,910) is attributed to members who
were transferred to the SSI program. The Proposition 204
program has declined (7.5)% compared to the prior
month, and (20.6)% from the prior year.
While significantly smaller, the spend down and the
KidsCare populations saw significant declines from the
prior year of (98.9)% and (43.2)% due to enrollment
freezes. There are now 65 individuals in the spend down
program and 14,238 in the KidsCare program.
There were 38,170 TANF recipients in the state in
October, a monthly caseload increase of 1.0%. Yearover-year, the number of TANF recipients has declined
by (15.3)%. This decline is the result of the statutory
lifetime limit a person may receive cash assistance. The
FY 2012 budget reduced the lifetime 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 October,
there were a total 1.1 million food stamp recipients in
the state, a 0.6% increase over the prior month.
Compared to the same month last year, food stamp
participation was up by 7.9%. 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 decreased to
40,008 inmates between September and November
2011. Relative to the prior 3-month period, the population
has decreased by (8) inmates. Compared to a year ago
the population has declined by (194) inmates.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

Economic Indicators

(Continued)

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
- Greater Phoenix S&P/Case-Shiller Home Price Index
(Jan. 2000 = 100)
- Foreclosure Activity, Maricopa County
Foreclosure Notices (Notice of Trustee’s Sales Recorded)
Pending Foreclosures (Active Notices)
- 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

October
September
September
October
October
October
September
Aug-Oct
Aug-Oct

9.0%
21,516
64,739
2.43 million
151,800
118,600
40.9
$36.4 million
$136.8 million

(0.1)%
(15.2)%
(13.0)%
0.6%
0.4%
2.0%
1.2%
1.2%
(0.3)%

(0.8)%
(8.7)%
(14.0)%
1.9%
3.2%
4.0%
1.5%
17.3%*
8.3%*

Jul-Sep
Jul-Sep

967
409

(3.7)%
11.2%

14.8%
188.3%

October
October

7,215
1,025

(9.1)%
(11.3)%

(10.7)%
(15.6)%

October
October
August

$124,900
$77,300
100.43

(0.1)%
0.8%
(0.1)%

(9.9)%
(9.1)%
(7.7)%

October
October
October
August
August

4,354
22,901
27,266
3.41 million
$6.57

(4.2)%
(1.7)%
1.2%
(6.0)%
11.4%

(38.5)%
(44.9)%
(39.7)%
8.9%
7.0%

4th Quarter 2011
September
2nd Quarter 2011
April 1, 2010
November

October
October
Sept-Nov

57.5
178.69
$232.8 billion
6.39 million
1,353,552
898,511
65
177,580
157,431
14,238
51,689
54,038
38,170
1,155,916
40,008

6.5%
0.3%
1.2%
N/A
(1.0)%
0.2%
(83.9)%
(7.5)%
(0.9)%
(4.9)%
0.3%
2.1%
1.0%
0.6%
(8) inmates

2.1%
2.1%
5.5%
N/A
(0.3)%
5.2%
(98.9)%
(20.6)%
3.3%
(43.2)%
2.3%
18.1%
(15.3)%
7.9%
(194) inmates

September/June
September/June

18,945
26,080

35
(14)

(784)
(816)

4th Quarter 2011
(1st Estimate)
October
October
Jun-Aug
October

$13.4 trillion

2.5%

1.6%

39.8
117.4
$4.56 billion
226.76

(14.2)%
0.9%
(1.6)%
(0.1)%

(20.2)%
6.6%
(5.3)%
3.6%

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

JCCR Meeting
At its November 17, 2011 meeting, the Joint Committee
on Capital Review considered the following issues:
Northern Arizona University – Review of Parking Structure
Bond and Office Projects – The Committee gave a
favorable review of $26.5 million in bond issuances to
build a new parking structure on the Flagstaff campus
and a $10.0 million indirect financing agreement for an
administrative office building.
Arizona State University – Review of Recreation Facilities
and Post Office Projects – The Committee gave a
favorable review of a $56.0 million bond issuance to
finance recreational facilities at the East and West
campuses, along with renovating part of the old
downtown Phoenix post office for a student union.
These projects would be supported with a new
mandatory $150 student fee.
University of Arizona – Review of Athletic Facilities
Projects – The Committee gave a favorable review of a
$73.5 million bond issuance to renovate and expand the
north end-zone of the football stadium and upgrade
items at other campus athletic facilities. These projects
would be supported with donations and increased
media revenues from the new Pac-12 contract.
Pinal County Community College District – Review of
General Obligation Bond Issuance – The Committee
gave a favorable review of the district’s $59.0 million

General Obligation bond issuance, which will primarily
finance new construction related to classrooms and
office space, along with land acquisitions and
renovations.
State Parks Board – Review of FY 2012 State Lake
Improvement Fund Capital Expenditures – The
Committee gave a favorable review of the board’s
$500,000 expenditure plan for the State Lake
Improvement Fund in FY 2012. The expenditure plan
includes funding for emergency building renewal,
repairs and replacements.
Arizona Department of Transportation – Review of
Sprinkler and Fire Alarm Systems Project – The
Committee gave a favorable review to the Department
of Transportation’s plan to spend $252,000 to install
automatic sprinkler and fire alarm systems at equipment
repair shops in Mesa and Show Low.
State Lottery Commission – Review of the FY 2012
Building Renewal Allocation Plan – The Committee gave
a favorable review of the commission’s FY 2012 Building
Renewal Allocation Plan, which would be funded with
$79,200 from the State Lottery Fund.
Arizona Department of Administration - Consider
Recommending FY 2012 Rent Exemption – The
Committee recommended a technical rent exemption.

Summary of Recent Agency Reports
Arizona Department of Administration – Motor Vehicle
Fleet – Pursuant to A.R.S. § 41-803R, the Arizona
Department of Administration reported on the FY 2011
year-end inventory of state-owned alternative fuel
vehicles. Of the 11,871 state vehicles, 4,740, or 39.9% are
subject to the alternative fuel vehicle requirements.
Of the 4,740 state vehicles subject to the alternative fuel
vehicle requirements, 3,298, or 69.6% are alternative fuel
vehicles. This percentage remained unchanged from
the prior year and exceeds the 40% target established by
statute.
Statute also requires 90% of the state vehicles in
Maricopa County to be capable of using alternative
fuels. The state reports that 82.7% of its Maricopa County
vehicles are alternative fuel vehicles. This is a decrease
of (0.7)% from the prior year.

Notwithstanding the quantity of vehicles capable of
using alternative fuel, only 2.4% of the fuel budget was for
alternative fuels.
(Brett Searle)
Arizona Commerce Authority – Annual Report on Arizona
Competes Fund – Pursuant to A.R.S. § 41-1545.04, the
Arizona Commerce Authority (ACA) is required to report
annually on grants from the previous fiscal year and
other projects currently funded from the Arizona
Competes Fund and performance measures for the
recipients including job creation, capital investment and
median wages.
Laws 2011, 2nd Special Session, Chapter 1 created the
ACA effective July 1, 2011. As a result, the ACA did not
make any expenditures from the Arizona Competes Fund
in FY 2011. On October 24, 2011, the ACA announced
the first award from the Arizona Competes Fund. While
the amount of the agreement has not been disclosed,

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

Summary of Recent Agency Reports
the monies are scheduled to be awarded to Clear
Energy Systems, a Tempe-based manufacturer of
portable energy systems, for a $10.0 million expansion of
the company to launch a new, one megawatt natural
gas generator that will create an estimated 225 jobs in
the Greater Phoenix area. To date, no other awards
have been announced.
The Arizona Competes Fund receives an annual $21.5
million deposit of income tax withholding monies and
$3.5 million in state lottery revenues. The monies are used
to retain, attract, and expand businesses in Arizona
through the provision of grants and loans. (Eric Billings)
Arizona Community Colleges – Report on Dual Enrollment
– Pursuant to A.R.S. § 15-1821.01, the Arizona Community
Colleges are reporting on dual enrollment students in
FY 2009 cohort. Students in a dual enrollment course can
earn both high school and community college credit for
courses taught at their high school.
Highlights of the report include:
•
12,826 students were dual enrolled in the FY 2009
cohort (up from 12,591 in FY 2008).
•
9,219 students in the FY 2009 cohort continued
studies at an Arizona community college or state
university after high school graduation. (Up from
8,783 in the FY 2008 cohort).
(Marge Zylla)
Department of Corrections – Report on Transition Release
Program – Pursuant to A.R.S. § 31-285, the State
Department of Corrections (ADC) is required to submit an
annual report that details the cost reductions to the
department from an inmate early release Transition
Program and the number of participants who did not
receive an early release under the Transition Program.
Statute requires ADC to contract with a private or
nonprofit entity to provide eligible drug offenders with
transition services. The ADC Transition Release Program
began in March 2004 and allows eligible inmates in the
Transition Program to be released 3 months earlier than
the inmate's earliest release date.
In FY 2011, the department reports that 879 participants
successfully completed the Transition Program and their
term of community supervision while an additional 674
participants completed the Transition Program and
continued their term of community supervision. A total of
114 participants failed to complete the early transition
release by violating their conditions of supervision. In
total, the program is responsible for 66,250 bed days
saved which translates to a savings of $1,126,300.
(James Alcantar)

(Continued)

Department of Public Safety – Quarterly Report on the
GIITEM Fund – Pursuant to A.R.S. § 41-1724, the
Department of Public Safety (DPS) is required to report
quarterly on Gang and Immigration Intelligence Team
Enforcement Mission (GIITEM) Fund expenditures.
Through the first quarter of FY 2012, DPS spent or
encumbered $1.6 million of the FY 2011 non-lapsing $2.6
million appropriation for local law enforcement grants.
Of this amount, $781,200 was expended in the first
quarter as a grant to the Maricopa County Sheriff’s
Office. The remaining $937,100 in FY 2011 local law
enforcement grants will be available for use through FY
2012. DPS did not expend any of the $2.6 million FY 2012
appropriation which will be available for use through FY
2013.
Additionally, the GIITEM Border Security and Law
Enforcement Subaccount received $37,800 in criminal
fine and fee revenues in the first quarter of FY 2012.
These monies are being used to reimburse the General
Fund for a $1.0 million appropriation made to the Pinal
County Sheriff pursuant to Laws 2011, Chapter 308. (Eric
Billings)
Superior Court – Report on Probation Services – Pursuant
to a General Appropriation Act footnote and A.R.S. § 12262C, the Administrative Office of the Courts (AOC) is
required to report to the JLBC on several probation items:
Case Carrying and Non-Case Carrying
Positions
Adult Probation and Juvenile Probation maintained 353
and 140 case carrying positions, and 454.6 and 391.1
non-case carrying positions, respectively in FY 2011.
Between 83.7% and 98.4% of these positions were filled.
Total Receipts and Expenditures
Total FY 2011 spending from all funds for Adult and
Juvenile Probation Services was $266.8 million, including
$68.9 million of state funding.
Retained Funding
The AOC retained a total of $7.5 million in FY 2011 to
support local probation departments and the state level
probation staff through training, certification, and
research.
(James Alcantar)
Universities – Report on University Research Infrastructure
Income – Pursuant to A.R.S. § 15-1670, Arizona State
University (ASU), Northern Arizona University (NAU), and
the University of Arizona (UA) are required to submit an
annual report on the amount of the previous year’s
income from licensure and royalty payments, the sale or
transfer of intellectual property developed by the
university, and to deposit a portion of that income into

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

Summary of Recent Agency Reports
the state General Fund. All 3 universities have reported
that no deposits were made in FY 2011, as they believe
that their income is net of expenses instead of gross
income.
Each of the universities reported no net income from
licensure and royalty payments, the sale or transfer of

(Continued)

intellectual property in FY 2011. In terms of FY 2011 gross
income, ASU reported $1.1 million in licensing and
royalty revenues, NAU reported $42,700 in licensing and
royalty revenues, and UA $890,400 in licensing, royalty
and assignment revenues.
(Marge Zylla)

October Spending
October 2011 General Fund spending was $458.7 million.
October expenditures were less than the prior year
primarily due to budget reductions and changes in the
timing of transfers for the Medicaid state match

•

In October, University spending was $(21.6) million
less than the prior year. The universities received a
$198 million lump sum reduction in FY 2012, which
will be spread out throughout the fiscal year.

FY 2012 Spending

•

DHS spending was $(38.2) million lower than the prior
year due to changes in the timing of a transfer for
the Medicaid state match for the behavioral health
program.

October 2011 spending of $458.7 million was $(88.7)
million less than October 2010 (See Table 6).

Table 6
General Fund Spending ($ in Millions)

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

October 11

Change from
October 10

Year-toDate

YTD Change
from FY 11

129.7
64.3
56.2

38.4
(19.0)
(15.8)

570.1
313.8
420.4

48.1
13.2
(3.2)

81.6
14.5
5.9
0.1

(11.9)
(38.2)
3.8
(0.1)

1,685.8
409.9
30.5
132.7

(8.8)
233.9
4.1
99.7

42.5
0.0

(21.6)
0.0

374.3
49.1

(60.2)
(3.0)

63.9
458.7

(24.3)
(88.7)

209.9
4,196.5

(78.6)
245.2

10 JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011
Table 7

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

General Fund Spending
($ in Thousands)
Change from
October 11
October 10
760.3
(172.7)
62.9
(74.8)
592.2
100.7
129,651.3
38,353.6
1,235.9
(3,305.6)
51.5
(1.3)
46.3
2,625.0

(94.1)
2,556.7

17,144.3
46.3
64,304.4
1,097.7
56,155.5
81,553.3
539.1
26.4
96.2
51.1
184.2
262.9
1,677.6
196.8
1,013.9
213.7
14,495.9
223.9
65.9
272.9
11.6
430.7
940.4
16,558.3
1,075.3
4,414.8
361.7
4.5

1,182.1
6.2
(18,989.7)
(2,369.9)
(15,762.6)
(11,895.9)
(210.5)
(4.7)
24.6
3.8
31.0
(118.1)
1,197.1
64.6
(56.9)
(25.1)
(74.4)
(38,211.4)
(232.6)
(30.3)
272.9
9.0
77.3
1,077.9
(945.8)
(453.1)
840.6
5.6
(0.5)

1,256.6
946.4

120.8
(1,459.4)

Year-to-Date
8,459.4
49,050.7
276.5
2,996.1
570,073.2
6,661.1
187.9
275.1
10,500.0
34,288.7
181.8
313,820.5
7,565.3
420,420.0
1,685,838.8
3,619.0
7,000.0
65.4
288.8
313.1
990.0
786.5
2,480.8
348.9
(3.1)
2,614.5
704.1
409,870.6
1,366.4
219.3
1,200.8
23.3
1,931.6
5,087.2
34,796.1
4,829.9
17,493.4
547.8
16.5
5,882.9
3,906.2

YTD Change from
FY 11
(1,883.7)
(3,016.2)
(141.4)
(1,216.5)
48,128.7
(1,438.5)
(31.5)
(84.4)
8,088.3
(31,924.5)
(37.8)
13,193.8
(1,481.1)
(3,245.0)
(8,802.7)
(389.6)
(0.6)
(24.5)
77.2
(115.1)
(293.3)
(429.1)
1,279.2
118.1
(209.3)
(782.0)
(135.6)
233,944.4
(2,496.7)
2.4
1,200.8
9.1
(744.7)
(7,232.3)
(123.6)
(1,895.5)
(7,044.7)
(576.5)
(13.5)
(1,378.3)
(1,150.1)

11 JLBC – MONTHLY FISCAL HIGHLIGHTS – NOVEMBER 2011

Agency
Joint Legislative Budget Comm.
Legislative Council
Senate
Board of Medical Student Loans
Mine Inspector
Department of Mines & Mineral Resources
Nav. Streams & Adjudication
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

October 11
138.2
303.6
583.2
20.5
64.7
7.2
128.2
88.0
5,919.5
135.0
258.7
170.4
4,827.9
73.0
798.0
27.0
2.2
143.2

Change from
October 10
16.0
15.2
107.1
3.6
(4.2)
(17.2)
(15.4)
51.5
88.0
3,842.5
(16.1)
29.3
(1.2)
39.0
(2,264.1)
7.9
(1,632.7)
11.5
(1.6)
(44.5)

497.8
19,169.4
5,947.3
16,872.6
1,412.6
251.2
77.7
116.5
458,710.8

(3,877.8)
(9,849.5)
(2,604.7)
(5,262.5)
(1,399.2)
(45.7)
(166.7)
(17,099.2)
(88,655.4)

Year-to-Date
668.1
2,185.0
2,606.8
20.5
423.1
66.3
784.1
698.4
30,454.4
2,427.9
666.0
976.1
21,362.7
132,696.6
3,633.2
105.4
12.8
241.7
6,350.1
167,252.9
54,283.8
146,420.1
2,762.1
1,863.5
341.9
243.4
4,196,521.6

YTD Change from
FY 11
(254.6)
64.4
(984.8)
(188.2)
(59.0)
(725.7)
(12.4)
(20,000.0)
426.2
540.7
4,096.3
(343.7)
39.7
(4.7)
(503.3)
2,949.9
99,746.1
(4,750.1)
(7.9)
(3.1)
(65.3)
(3,798.3)
(24,928.3)
(10,417.4)
(21,049.1)
(1,983.6)
(87.9)
(131.6)
(34.3)
245,233.2