JLBC - Monthly Fiscal Highlights

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

Summary
November continued the state’s trend of
revenue growth this fiscal year as base
General Fund collections (excluding one-time
adjustments) were 4.2% above the prior year.
General Fund revenues totaled $608.9 million.
While prior months have shown significant
growth in all 3 of the state’s largest tax
categories, November’s results were more
mixed. Sales tax collections grew a modest
1.2%, compared to Individual Income tax
collections which declined for the first time in
15 months.

www.azleg.gov/jlbc.htm

Year-to-date, FY 2012 General Fund revenues
are $3.65 billion, or 8.2% above FY 2011
excluding one-time adjustments.
November General Fund collections were
$4.6 million above the enacted budget
forecast. Year-to-date, revenues are $177.5
million above the enacted forecast.

“Year-to-date,
FY 2012 General
Fund revenues
are $3.65 billion,
or 8.2% above FY
2011.”

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

December 2011

In comparison to revenue of $608.9 million,
November 2011 General Fund spending was
$560.6 million.
Fiscal year-to-date, General Fund revenues of
$3.65 billion have been offset by $4.76 billion
in spending.
Final FY 2011 Ending Balance
The General Accounting Office released its
Annual Financial Report for FY 2011 on
December 9. The report showed that the
General Fund ending balance for FY 2011 was
$3.2 million. The FY 2012 budget originally
assumed FY 2011 would end with a shortfall of
$(332) million. However, since that shortfall
has been eliminated, FY 2012 revenues will no
longer be needed to pay off the FY 2011
shortfall. The $332 million along with the

balance from FY 2012 (currently $178 million)
will constitute the overall balance at the end
of the fiscal year.
House Appropriations Subcommittee on MultiYear Budgeting
At its November 29, 2011 meeting, the House
Appropriations Subcommittee on Multi-Year
Budgeting heard a JLBC Staff presentation on
the state’s use of fund transfers in prior budget
years and future year budget projections.
When solving the budget shortfalls in FY 2008 FY 2012, fund transfers comprised $1.9 billion,
or 14% of total budget solutions.
House Appropriations Subcommittee on Debt
At its December 8, 2011 meeting, the House
Appropriations Subcommittee on Debt heard
a presentation from the State Comptroller
and a state financial advisor regarding
technical details on the early repayment of
the state’s operating financing. In addition,
JLBC Staff presented information on the
state’s outstanding non-General Fund debt.
Joint Legislative Income Tax Credit Review
Committee (JLITCRC)
At its December 7, 2011 meeting, the JLITCRC
heard JLBC Staff Presentations regarding 3
income tax credits which were being
evaluated according to the criteria outlined
in statute, such as: cost, complexity and
effectiveness. Statute requires income tax
credits to be reviewed according to a given
schedule, which is typically every 5 years.
The Committee recommended the
continuation of the “Angel” Investment Credit
and the Corporate Private School Tuition
Credit. In addition, the Committee
recommended the elimination of the
Residential Solar Energy Device Credit.

Table of Contents
Summary
• Final FY 2011 Ending Balance............................1
• House Subcomm. on Multi-Year Budgeting ...1
• House Subcomm. on Debt ................................1
• Income Tax Credit Review Committee...........1
November Revenues..............................................2
Economic Indicators ..............................................4
Summary of Recent Agency Reports
• ADOA – Working Capital Surplus......................7

ACJC – Criminal Justice Enhancement Fund 7
ADE – K-12 Aggregate Expenditure Limit ....... 7
Mine Inspector – Abandoned Mines Safety .. 7
ABOR – Loan Forgiveness Program ................. 7
ABOR – University System’s Financial Aid ....... 7
ABOR/Comm Colleges – Articulation ............. 8
November Spending.............................................. 8
•
•
•
•
•
•

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

November Revenues
Table 1

General Fund Revenues ($ in Millions)

November
Year-to-Date

“Year-to-date,
[Individual
Income Tax]
revenues have
grown 9.7%
and are $85.6
million above
forecast
through
November.”

FY 2012
Collections
$ 608.9
$ 3,652.9

Sales Tax collections were $357.3 million, or
1.2% above November 2010 and $(4.9) million
below forecast. Excluding the $71.0 million
from the temporary 1-cent increase,
collections were $286.3 million, or (0.1)% below
November 2010. The temporary 1-cent tax
continues to grow more than the base tax
because of certain exemptions for purchases
under contract prior to the effective date of
the tax.
Year-to-date, base sales tax collections are
5.6% above the prior year and are $42.1 million
above forecast.
Table 2 displays the November growth rates for
the largest categories.
Table 2

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Utilities
Use
Restaurant & Bar

November
7.2%
(5.2)%
(10.2)%
(22.5)%
4.9%

YTD
7.9%
11.6%
(0.1)%
0.8%
7.5%

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 decline this
month is the first since December 2010.
Individual Income Tax net revenues were
$256.5 million in November, or (3.6)% below the
prior year. Collections were $(16.5) million
below forecast. Year-to-date, revenues have
grown 9.7% and are $85.6 million above
forecast through November.
As indicated in Table 3, withholding declined
by (2.5)% in November for a year-to-date
increase of 4.1%. This month’s decrease may
be due to a timing issue. While this November
had the same number of processing days as
the previous year, it had 1 less Monday.
Mondays represent 40% of withholding
collections. While the table shows large

Difference From
Forecast
$ 4.6
$ 177.5

Difference
From FY 2011
$ 31.9
$ 406.6

increases in both Payments and Refunds,
collections for November in these categories
are small on a total dollar basis.
Table 3

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

November
(2.5)%
30.5%
43.1%

YTD
4.1%
20.8%
(24.9)%

Corporate Income Tax net collections were
$(5.8) million in November, which is $31.3 million
above the prior year. The negative monthly
collection amount is due to refunds exceeding
payments. Collections were $22.1 million
above the forecast.
Year-to-date, collections have grown 35.2%
and are $53.3 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. In total, $12.9 million was
collected from the program, which was $(9.1)
million less than budgeted.
Previously, these recovery collections were
reported with the regular collections for each
category. Table 4 shows the collections by
category. Year-to-date collections for each
category have been adjusted to reflect the
additional information.
Table 4

Tax Recovery Collections
by Category

Sales Tax
Individual Income Tax
Corporate Income Tax
Total

$ in M
$ 2.8
6.1
4.0
$12.9

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

November Revenues (Continued)
The Lottery Commission reports that November ticket
sales were $50.7 million, which is $4.6 million, or 10.0%,
above sales in the prior year. Year-to-date ticket sales
are $238.2 million, which is 10.5% above last year’s sales.

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.

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 $94.6 million in November were down
$(1.5) million, or (1.6)%, compared to November of last
year. Year-to-date revenues are down (0.1)%.

Tobacco Tax revenues were $24.6 million in November.
Collections were down (14.9)% compared to the prior
year. Year-to-date collections are down (1.2)%, and are
$(0.4) million below forecast.
Less than 10% of tobacco taxes are deposited directly into
the General Fund. The remainder primarily goes to
Table 5

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

FY 2012 YTD (Five Months)

Change From
Actual

November 2010

November 2011

Amount

Change from
Actual

Forecast

Percent

Amount

Percent

November 2010

November 2011

Amount

Forecast

Percent

Amount

Percent

Taxes
Sales and Use - Base*
- 1¢ Increase*
Income - Individual
- Corporate

$286,297,169

($188,440)

$70,971,858

4,318,705

6.5

1,153,609

1.7

256,509,482

(9,683,886)

(3.6)

(16,529,199)
22,057,231

(5,833,080)

Property

3,328,071

Luxury - Tobacco

4,762,522

- Liquor
Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

1,906,700
310,272

31,345,040
(422,687)
2,222,032
(409,032)
938,331

0

0

38,089

14,107

$618,291,083

$28,134,170

(0.1) %

-(11.3)
87.5
(17.7)
--58.8
4.8 %

($6,083,302)

(588,068)
2,208,551

(2.1) %

$1,489,406,151

$79,100,107

367,342,555

39,434,829

12.0

5.6 %

$42,122,324
20,453,952

2.9 %
5.9

(6.1)

1,373,581,421

121,644,232

9.7

85,588,696

6.6

(79.1)

192,249,650

50,027,565

35.2

53,310,172

38.4

(15.0)

5,853,278

(37,338)

(0.6)

(331,769)

(5.4)

86.5

6,006,883

(2,034,406)

(25.3)

(2,077,077)

(25.7)

(462,215)

(19.5)

10,530,787

2,294,326

27.9

2,105,169

25.0

254,137

452.7

123,551,406

(12,483,258)

(9.2)

(14,672,850)

(10.6)

220,825

(216,547)

(49.5)

220,825

227,304

(16,245)

(6.7)

16,434

0
11,577
$2,022,321

-43.7
0.3 %

$3,568,970,260

$277,713,265

1,177,740

8.4 %

$186,735,876

-7.8
5.5 %

Other Revenue
Lottery

4,184,940

(381,215)

(8.3)

(22.7)

18,700,160

License, Fees and Permits

1,946,843

49,197

2.6

39,579

2.1

11,098,914

(145,979)

(1.3)

8,571

(270,682)

(96.9)

(491,429)

(98.3)

31,751

(1,924,503)

(98.4)

(2,468,249)

(98.7)

Sales and Services

1,175,024

(1,375,634)

(53.9)

(385,728)

(24.7)

6,606,557

(2,111,911)

(24.2)

(1,754,572)

(21.0)

Other Miscellaneous

1,663,383

(689,111)

(29.3)

767,173

85.6

15,125,472

2,381,477

18.7

7,210,205

91.1

--

0

0

0

(0.3)

3,854,856

70.8

(12.8) %

2,558,333

16.3 %

63,008,642

4.2 %

$4,580,654

0.7 %

$3,631,978,902

Interest

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

0
9,299,285
18,278,046
$636,569,129

0
(26,567)
(2,694,012)
$25,440,158

(1,226,118)

--

11,445,788

(1,921,265)
(2,544,441)
$275,168,824

6.7

-(14.4)
(3.9) %
8.2 %

(1,390,905)
395,279

(6.9)
3.7

0
(2,083,486)
(91,728)
$186,644,148

-(15.4)
(0.1) %
5.4 %

Other Adjustments
Urban Revenue Sharing
Budget Plan Transfers
Tax Recovery Program
Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(35,368,620)

4,131,923

7,740,237

2,335,029

0
(27,628,383)
$608,940,746

0

-43.2

0

0.0

(176,843,100)

20,659,615

0

0.0

184,939,221

97,866,214

-112.4

0

0.0

0

0.0

--

0

--

12,867,428

12,867,428

--

(9,132,572)

(41.5)

6,466,952

-- %

0

0.0 %

20,963,549

131,393,257

-- %

(9,132,572)

(30.3) %

$31,907,110

5.5 %

$4,580,654

0.8 %

$3,652,942,451

$406,562,081

12.5 %

$177,511,576

5.1 %

Non-General Funds
Highway User Revenue Fund

$94,612,091

($1,536,084)

(1.6) %

($2,978,306)

(3.1) %

$490,013,429

($432,859)

(0.1) %

($7,789,553)

(1.6) %

Tobacco Tax (All Funds Total)

$24,622,431

($4,323,181)

(14.9) %

($3,548,803)

(12.6) %

$135,504,312

($1,711,222)

(1.2) %

($371,885)

(0.3) %

__________
* Total November collections including the temporary 1¢ increase approved by the voters in May 2010 were $357.3 million. This amount is $4.1 million, or 1.2%, above November 2010 and $(4.9) million, or (1.4)%, below
forecast. Year-to-date, total collections including the 1¢ increase were $1,856.7 million. This amount is $118.5 million, or 6.8%, above November 2010 and $62.6 million above forecast.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

Economic Indicators
NATIONAL

“American
consumers are
beginning to
move out of
recession mode.
It will likely take
considerable
time, however,
before consumer
confidence
returns to prerecession levels
since Americans
still face many
hurdles,
especially
related to
housing and loss
of household
wealth.”

The Conference Board’s U.S. Consumer
Confidence Index surged by 15.1 points in
November, to a reading of 56.0, the highest
level since July. The month-over-month
percentage increase of 36.9% was the largest
such gain since April 2009. Consumer optimism
appears to be on the rise as job prospects are
slowly improving. With the unemployment rate
falling for 3 consecutive months, real
disposable income increasing, and gasoline
prices retreating, American consumers are
beginning to move out of recession mode. It
will likely take considerable time, however,
before consumer confidence returns to prerecession levels since Americans still face many
hurdles, especially related to housing and loss
of household wealth.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), was unchanged
in November, following prior month’s (0.1)%
decline. Compared to the same month in the
prior year, consumer prices were up by 3.4%.
Core inflation, which excludes energy and
food prices, increased by 0.2% in November.
Year-over-year, core inflation is up by 2.2%.
The latest CPI reading suggests that inflation
pressures are easing. This is primarily due to a
smaller increase in food prices in recent
months coupled with a slight decline in energy
prices.

ARIZONA
The Federal Reserve Bank of Philadelphia’s
coincident index gauges current economic
activity in each state. The index combines 4
indicators: employment, average hours
worked in manufacturing, unemployment rate,
and inflation-adjusted wages.
Most states nationwide saw an increase in their
coincident index in October, with Arizona
posting moderate growth compared to other
states. In October, Arizona’s coincident index
increased by 0.3% compared to the prior year.
Year over year, the Arizona index is 2.3% above
last year, the largest gain since May 2007.
While this is a significant improvement,
Arizona’s index is still (12.5)% below its peak,
which occurred in August 2007. See Tracking
Arizona’s Recovery for additional historical
information.

Housing
In November, the number of new Maricopa
County foreclosure notices decreased (4.9)%
from October levels to 4,140. The number of
Maricopa County pending foreclosures
decreased from 22,901 in October to 20,962 in
November. The October total is (59.3)%
below the peak in December 2009 (51,466).
See Tracking Arizona’s Recovery for additional
historical information.
While the decline in the number of pending
foreclosures is a positive development in the
Maricopa County real estate market, the
region continues to see declining home
prices. In the Phoenix Metropolitan area in
November, there were a total of 7,105
existing single-family home sales that resulted
in a median resale home price of $126,000.
Compared to the prior year, the number of
sales have increased 3.8%, while prices are
(6.7)% lower.
Of the existing sales in the area, a significant
portion (29.2%) were foreclosures. This is an
improvement from the worst of the recession,
where over half of existing home sales were
foreclosures. The decline is partially due to
lenders agreeing to short sales rather than
foreclosing properties. The exchanging of
these 2 transaction types has a minimal
impact on the real estate market, as
evidence suggests the housing market is still
weighed down by a large volume of
distressed sales.
Another measure of the health of the Arizona
real estate market is permitting activity. It
appears that single-family housing permits will
decline for the sixth consecutive year in 2011.
Through October, a total of 9,086 singlefamily building permits had been issued
statewide, a (7.0)% decrease from last year.
While the single-family sector appears to still
be struggling, the multi-family housing sector
seems to be more healthy, in part due to
declining apartment vacancy rates. As of
October, multi-family building permits for a
total of 2,116 units had been issued in the
state, a 62% increase from the prior year.
While this growth is significant, multi-family
permitting activity still remains approximately
80% below the peak of activity in June 2006.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

Economic Indicators

(Continued)

Employment
According to the Employment and Population Statistics
Unit (EPSU) of the Arizona Department of Administration,
the state added 10,200 nonfarm jobs in November over
October. This was a month-over-month gain of 0.4%, or
(0.2)% below the average growth rate for November
over the prior 10 years. The retail sector led job gains in
November with 12,800 additional employees on their
payrolls. These are mostly seasonal jobs related to
holiday shopping.
The construction sector was the biggest loser in
November with the shedding of (6,200) jobs. While
construction employment typically declines in
November, this year’s job loss was more than 3 times the
average decline in the last 10 years. It also marked the
first month-over-month job loss since February. The
reason for the unusually large construction employment
decline last month is not clear at this point.
The state’s employers had 45,800, or 1.9%, more
individuals on the payrolls in November than 1 year ago.
November was the 11th consecutive month with yearover-year gains in employment. The average nonfarm
employment gain for the first 11 months of 2011 was
0.9%, or 22,200 jobs. See Tracking Arizona’s Recovery for
additional historical information.
At 8.7%, the state’s unemployment rate in November fell
below 9.0% for the first time since February 2009. This
improvement is in line with the national unemployment
rate, which has also declined in each of the last 3 months.
Arizona’s jobless rate is now (0.9) percentage points
below last year. While November’s release of
unemployment data suggests that the Arizona economy
is slowly mending, analysts at EPSU also cautioned that
the jobless rate could fluctuate up and down over the
coming months as previously discouraged workers
resume their job search.
State Agency Data
In December, total AHCCCS caseloads equaled 1.34
million members, a (1.3)% decrease over the prior
month. Overall AHCCCS caseloads are currently (0.9)%
below December 2010 levels.
The traditional AHCCCS population, which consists
primarily of lower-income children and their parents, was
down (0.4)% from November but up 5.5% from 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 (53,328) since July 1 to 164,390.

Of the decline, (10,202) is attributed to members who
were transferred to the SSI program. The Proposition 204
program has declined (7.4)% compared to the prior
month, and (26.1)% from the prior year.
There were 38,313 TANF recipients in the state in
November, a monthly caseload increase of 0.4%. Year
over-year, the number of TANF recipients has declined
by (14.8)%. 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
November, there were a total 1.1 million food stamp
recipients in the state, a (0.1)% decrease over the prior
month. Compared to the same month last year, food
stamp participation was up by 8.2%. 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
40,057 inmates between September and November
2011. Relative to the prior 3-month period, the population
has decreased by (30) inmates. Compared to a year
ago the population has declined by (248) inmates.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

Economic Indicators

(Continued)

Table 6

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

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

8.7%
25,249
63,965
2.45 million
152,400
112,500
40.5
$36.5 million
$137.9 million

(0.3)%
17.3%
(1.2)%
0.4%
(0.3)%
(5.2)%
(0.7)%
0.3%
0.8%

(0.9)%
(4.3)%
(12.7)%
1.9%
3.4%
0.5%
0.5%
10.0%*
8.0%*

Aug-Oct
Aug-Oct

938
409

(3.0)%
(37.5)%

18.4%
56.4%

November
November

7,215
1,075

(1.5)%
4.9%

3.8%
4.9%

November
November
September

$126,000
$80,825
100.22

0.9%
4.6%
(0.2)%

(6.7)%
(0.2)%
(6.5)%

November
November
November
October
September

4,140
20,962
26,798
3.33 million
$5.41

(4.9)%
(8.5)%
(1.7)%
8.5%
(17.7)%

(29.7)%
(49.8)%
(40.9)%
2.3%
(4.9)%

4th Quarter 2011
October
2nd Quarter 2011
April 1, 2010
December

November
November
Sept-Nov

57.5
179.27
$232.8 billion
6.39 million
1,336,141
895,209
8
164,390
156,762
13,536
51,741
54,495
38,313
1,153,368
40,057

6.5%
0.3%
1.2%
N/A
(1.3)%
(0.4)%
(87.7)%
(7.4)%
(0.4)%
(4.9)%
0.1%
0.8%
0.4%
(0.1)%
(30) inmates

2.1%
2.3%
5.5%
N/A
(0.9)%
5.5%
(99.9)%
(26.1)%
3.3%
(43.6)%
2.2%
21.5%
(14.8)%
8.2%
(248) inmates

October/Sept.
October/sept.

18,797
25,849

(108)
(108)

(822)
(623)

3rd Quarter 2011
(2nd Estimate)
November
October
Aug-Oct
November

$13.3 trillion

2.0%

1.5%

56.0
117.4
$4.67 billion
226.72

36.9%
0.9%
1.3%
0.0%

(3.1)%
6.6%
(2.5)%
3.4%

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

Summary of Recent Agency Reports
Arizona Department of Administration – Report on
Working Capital Surplus – Pursuant to A.R.S. § 41-707, the
Arizona Department of Administration (ADOA) reported
on the FY 2011 working capital surplus requirements for
tax-exempt deficit financing entered into by the state
after January 1, 2009. Since this date, the state has
entered into 3 deficit financing agreements: 2
transactions involving the sale/leaseback of state
properties totaling $1.0 billion and lottery revenue bonds
totaling $450 million.
Because the state used tax-exempt debt financing to
eliminate a budget shortfall, the federal government
essentially requires the state to purchase tax-exempt
securities if the year-end General Fund balance (or
“working capital”) exceeds 5% through FY 2014. After FY
2014, the state would be required to repay the
sale/leaseback issuance. Working capital is defined as
the fiscal year ending balance in the following funds: the
state General Fund, the Budget Stabilization Fund, and
any Department of Revenue clearing accounts.
For each of the 3 tax-exempt financing agreements
entered into since January 1, 2009, ADOA found that no
working capital surplus existed for FY 2011. This means
the state will not currently be required to begin
purchasing tax-exempt securities. (Jack Brown)
Arizona Criminal Justice Commission – Report on Criminal
Justice Enhancement Fund – Pursuant to A.R.S. § 412401C, the Arizona Criminal Justice Commission has
provided its annual report on Criminal Justice
Enhancement Fund (CJEF) monies distributed to law
enforcement agencies. CJEF consists of a 47%
assessment on certain fines, penalties, and forfeitures
imposed and collected by the courts. In FY 2011, CJEF
revenues totaled $43.7 million and the total funds
available for the fiscal year, including the beginning
balance and adjustments, was $63.3 million. In FY 2011,
CJEF revenues decreased by (4.6)% from FY 2010; CJEF
expenditures totaled $36.8 million and fund transfers
totaled $4.6 million. (James Alcantar)
Arizona Department of Education – Report on K-12
Aggregate Expenditure Limit – Pursuant to A.R.S. § 15911B, the State Board of Education reported on October
27, 2011 that currently budgeted expenditures for all
school districts collectively statewide for FY 2012 are
$(1.5) billion below the Constitution’s aggregate
expenditure limitation (AEL). For FY 2011 the difference
was $(637.0) million. The change is largely due to the
erroneous inclusion of charter school enrollment in
calculation of the AEL limit (which is compared with
district-only expenditures). Without that error the
difference would be approximately $(872.8) million. The
AEL limits growth in statewide K-12 expenditures to the

combined rate of growth for enrollment and inflation,
with certain exceptions. (Steve Schimpp)
State Mine Inspector – Report on Abandoned Mines
Safety Fund Expenditures and Contributions – The State
Mine Inspector is required by A.R.S. § 27-131 to establish a
program to address public safety hazards at abandoned
mines. A.R.S. § 27-131 created the Abandoned Mines
Safety Fund (AMSF) to fund the program. The Mine
Inspector must submit an annual report to JLBC on or
before December 1 detailing the contributions to the
AMSF, and the expenditures by the fund during the
preceding fiscal year.
For FY 2011, the State Mine Inspector has recently
reported that the AMSF had no new revenue. The State
Mine Inspector secured 59 mine sites during FY 2011, at a
total cost of $43,000. The Mine Inspector has completed
preliminary planning for an additional 26 mine sites in FY
2012, with an estimated cost of $23,900. The Mine
Inspector financed these activities through the fund’s
carry-forward balance. (Brett Searle)
Arizona Board of Regents – Report on Loan Forgiveness
Program – Pursuant to A.R.S. § 15-1782, the Arizona Board of
Regents (ABOR) recently reported on the progress of the
Mathematics, Science, and Special Education (MSSE)
Teacher Loan Forgiveness Program. The program allows
ABOR to grant up to 5-year loans to eligible in-state
students who agree to a service commitment to teach in
a public school.
For the 2010-2011 academic year, there were 58
recipients. This total includes 35 loan renewals and 23
new recipients. Of the MSSE recipients, 19 are studying
mathematics education, 6 are studying science
education, and 33 are studying special education. As of
July 2011, 76% of participating students had graduated
and were either teaching or seeking employment.
A total of $357,967 was dispersed to students under the
loan forgiveness program in FY 2011.
Effective July 1, 2011, the program was transferred to the
Arizona Commission for Postsecondary Education by
Laws 2010, Chapter 332. (Breanne Bushu)
Arizona Board of Regents – Report on University System’s
Financial Aid – Pursuant to A.R.S. § 15-1650, the Arizona
Board of Regents is required to submit an annual report
on financial aid. Highlights from the FY 2011 report
include:
•
•

Approximately $1.7 billion in total financial aid was
provided to students.
Of this amount, $863.1 million (49.8%) came from
federal sources, $558.4 million (32.2%) came from

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

Summary of Recent Agency Reports
state institutional sources, $310.7 million (17.9%) came
from private sources, and $2.4 million (0.1%) came
from state scholarships, grants and loans. (The
private sources amount includes $16.2 million Arizona
Financial Aid Trust, which is a combination of both
state and institutional sources of aid.)
•
A total of 115,477 students received aid, including
91,715 undergraduate students and 23,762 graduate
students.
•
Of the undergraduate students receiving aid, 20,808
received non-need-based gift aid, 52,949 received
need-based gift aid, and 45,016 were awarded
miscellaneous types of non-gift aid (i.e. work study).
Some students received multiple types of aid.
•
The average aid package was $10,788, which
includes both need and non-need-based aid.
•
53.8% of undergraduate students and 56.7% of
graduate students have debt.
•
Upon graduation, the average undergraduate
student debt was $21,158, while the average
graduate student debt was $44,918.
(Leatta McLaughlin)

(Continued)

Arizona Board of Regents/Arizona Community Colleges –
Report on Articulation – Pursuant to A.R.S. § 15-1824, the
Arizona Board of Regents (ABOR) and the community
colleges are required to submit an annual report by
December 15 of their progress on both articulation and
meeting statewide postsecondary education needs.
This year’s progress in implementing the transfer model
and support systems include:
•

8,250 community college students completed the
Arizona General Education Curriculum, which
satisfies lower division general education
requirements at the universities. This is a 23% increase
over last year. However, the rate at which students
transfer from community colleges to universities has
remained relatively flat in recent years.
•
The Academic Program Articulation Steering
Committee, which addresses curriculum and
communication between K-12 and postsecondary
education, held its first meetings in 2011.
•
As required by Laws 2010, 2nd Regular Session,
Chapter 242, ABOR and the community colleges
have developed a shared numbering system which
will be fully implemented in January 2012.
(Marge Zylla)

November Spending
November 2011 General Fund spending was $560.6
million. November expenditures were $8.7 million greater
than the prior year.

•

In November, Universities spending was $(8.1) 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
November 2011 spending of $560.6 million was $8.7
million more than November 2010 (See Table 7).
Table 7
General Fund Spending ($ in Millions)

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

119.8
85.9
7.0
251.7
11.9
2.2
0.2
48.4
0.0
33.5
560.6

Change from
November 10
(1.6)
19.0
(1.2)
22.6
(35.4)
0.8
(0.1)
(8.1)
0.0
12.7
8.7

Year to
Date
689.9
399.7
427.4
1,937.5
421.7
32.7
132.9
422.7
49.1
36.6
4,757.1

YTD
Change
from FY 11
46.6
32.2
(4.5)
13.8
198.5
4.9
99.7
(68.3)
49.1
15.7
254.0

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

Table 8

General Fund Spending
($ in Thousands)

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

November 11
980.9
91.3
895.0
119,792.7
1,013.5
53.4
66.6
2,625.0
53.1
85,910.9
2,488.6
6,987.7
251,702.2
(38.1)
16.1
45.4
72.9
280.2
120.1
281.3
74.1
560.9
207.3
11,868.4
274.9
65.6
416.9
4.2
486.4
1,285.8
1,219.5
1,425.5
4,709.9
32.3
7.2
1,877.9
1,286.9

Change from
November 10
(192.4)
49.5
448.9
(1,558.9)
(120.0)
6.5
30.4
2,398.8
16.7
18,994.1
1,455.6
(1,243.3)
22,637.7
(697.5)
7.0
16.3
31.5
135.9
(3.4)
120.1
40.8
(25.6)
162.8
77.1
(35,437.3)
109.0
(2.4)
416.9
(5.9)
185.9
804.1
(38.0)
522.7
1,497.4
(384.5)
2.1
770.1
575.0

Year-to-Date
9,440.3
49,050.7
367.8
3,891.1
689,865.9
7,674.7
241.3
341.7
13,125.0
34,288.7
235.0
399,731.4
10,053.9
427,407.7
1,937,541.0
3,580.9
7,000.0
81.5
334.2
386.0
1,270.2
906.6
2,762.1
423.0
(3.1)
3,175.4
911.4
421,739.0
1,641.3
284.8
1,617.7
27.5
2,418.0
6,373.1
36,015.6
6,255.4
22,203.3
580.1
23.7
7,760.7
5,193.1

YTD Change from
FY 11
(2,076.1)
(3,016.2)
(91.9)
(767.6)
46,569.7
(1,558.5)
(25.0)
(54.0)
10,487.1
(31,934.5)
(21.1)
32,187.9
(25.5)
(4,488.3)
13,834.9
(1,087.1)
(0.6)
(17.5)
93.5
(83.7)
(157.3)
(432.5)
1,399.2
158.9
(234.9)
(619.3)
(58.5)
198,507.0
(2,387.7)
0.0
1,617.7
3.2
(558.8)
(6,602.1)
12.3
(1,372.8)
(5,547.3)
(961.0)
(11.4)
(608.2)
(575.1)

10 JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2011

Agency
Joint Legislative Budget Comm.
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

November 11
211.9
508.6
874.1
107.0
8.9
47.1
2,217.1
197.2
74.3
205.1
5,323.1
188.0
863.6
25.0
1.3
90.5

Change from
November 10
86.4
248.9
387.0
33.8
(18.4)
4.0
(124.0)
782.4
(72.2)
3.9
(1.2)
69.2
5,757.3
(11.9)
(187.5)
8.5
(0.0)
47.5

3,963.8
19,169.4
8,369.1
16,872.6
1,156.2
730.7
118.8
560,565.9

3,544.5
(6,231.5)
(182.8)
(5,262.5)
(2,097.5)
170.0
55.0
(76.1)
8,736.5

Year-to-Date
880.0
2,693.6
3,480.9
20.5
530.1
75.2
831.2
698.4
32,671.5
2,625.2
740.3
1,181.2
26,685.7
132,884.6
4,496.8
130.4
14.1
332.2
10,314.0
186,422.2
62,652.9
163,292.7
3,918.3
2,594.1
460.7
243.4
4,757,087.9

YTD Change from
FY 11
(168.2)
313.3
(597.9)
(188.2)
(25.2)
(744.1)
(8.4)
(20,000.0)
302.2
540.7
4,878.6
(415.9)
43.6
(5.9)
(434.1)
8,707.2
99,734.2
(4,937.6)
0.6
(3.2)
(17.8)
(253.8)
(31,159.8)
(10,600.2)
(26,311.5)
(4,081.1)
82.1
(76.5)
(100.5)
253,969.5