JLBC - Monthly Fiscal Highlights

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

www.azleg.gov/jlbc.htm

“The Finance
Advisory
Committee
(FAC) met on
April 12, 2012 to
update its 4sector revenue
forecast.”

April 2012

Summary
March collections significantly increased
compared to the prior year, as the state
experienced a decline in Individual Income
Tax refunds. This decline is due to a technical
timing issue. March General Fund revenues
totaled $626.4 million. Excluding one-time
adjustments, these base collections were
18.7% above last year. Overall March
collections were $18.5 million above the
January Baseline forecast.
Year-to-date, base revenues are 6.7% higher
than last year. In total, year-to-date General
Fund collections are $16.0 million above the
January forecast.

returns, April will be a significant month in
determining the ultimate magnitude of
Individual Income tax collections.
Finance Advisory Committee
The Finance Advisory Committee (FAC) met
on April 12, 2012 to update its 4-sector
revenue forecast. The FAC is a 15 member
panel of private and public sector economists
and their views serve as one of the 4 equal
inputs into JLBC’s Consensus Baseline revenue
forecast. The JLBC Staff and 2 University of
Arizona models are the other 3 inputs.

In comparison to monthly revenues of
$626.4 million, March 2012 General Fund
spending was $345.9 million, or $(74.0) million
below last year. Fiscal year-to-date, General
Fund revenues of $6.4 billion have been offset
by $6.7 billion in spending.

The FAC heard presentations on General
Fund Revenue collections, the U.S. economy,
and state cash flows. The JLBC Staff provided
members with revised FY 2012 - FY 2015 fiscal
estimates based on the 4-sector revenue
forecast and the budget actions of the House
and Senate Appropriations Committees in
February.

The March revenue results were affected by
calendar issues. March had fewer income tax
refund processing days than in 2011, which
artificially increased collections. Most refunds
are processed on Wednesday of each week.
In 2011, there were 4 Wednesdays in February
and 5 in March. In 2012, the reverse occurred
with 5 Wednesdays in February and 4 March
Wednesdays.

The April 4-sector forecasts base revenue
growth of 3.4% in FY 2013, 6.3% in FY 2014 and
7.2% in FY 2015. The April forecasts declined
from the prior January estimates. The primary
reason for the decline was lower figures from
the 2 University of Arizona (UA) models. In
particular, the “low risk” scenario was
reduced from 1.4% revenue growth to a
(2.5)% revenue decline in FY 2013.

From an overall fiscal year perspective, it is
difficult to interpret the final landing point for
Individual Income tax collections as the state
is still processing refund checks and
depositing payments. Department of
Revenue (DOR) data suggests that while the
overall number of tax returns filed year-todate is above last year, processing rates may
be lower. As DOR continues to process these

JLBC Staff also developed an alternative
scenario to address 2 concerns with the April
4-sector projection: 1) The projected 3.4%
growth is lower than many general economic
projections; and 2) The forecasts assume
accelerating growth through FY 2015.
Budget projections typically become more
cautious in the long run due to uncertainty.

Table of Contents
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
April 20, 2012.

Summary

JLBC Meeting........................................................ 8

• Finance Advisory Committee Summary .........1

JCCR Meeting ...................................................... 8

• Probability of a Recession..................................2

Summary of Recent Agency Reports

• Comparison w/ Executive Rev. Estimates.......2

• PSPRS – Report on Shared Cost Structure....... 8

March Revenues .....................................................3
Economic Indicators ..............................................5

March Spending ..................................................... 9

2 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

Summary

(Continued)

This alternate April scenario is based on annual 5%
growth for FY 2013 – FY 2015. Over this period of time,
however, the April alternative produces total General
Fund Revenue collections very comparable to the April
4-sector. Between FY 2012 and FY 2015, the April
forecasts are approximately $(165) million lower than the
Appropriation Committee revenue projections.
Table 1 below outlines a comparison of these
projections:
Table 1

FY 12

FY 13

FY 14

Jan. 4-Sector

5.3%

5.1%

6.9%

FY 15
5.0%1/

April 4-Sector

5.6%

3.4%

6.3%

7.2%

Alt April

5.6%

5.0%

5.0%

5.0%

___________
1/ 7.9% in January was adjusted to 5.0% in Appropriation
....Committee estimates

Probability of a Recession
During the FAC meeting, 2 panelists commented about
a “zero percent” likelihood of a recession in FY 2013.
These comments raise the question of whether the 4Sector forecast should include the (2.5)% UA model
result.
The 4-Sector forecast does not automatically include a
recession scenario. Two of the models are base
forecasts - they provide the most likely revenue
outcome. These base forecasts represent a 50%
probability of exceeding and 50% probability of falling
below the projection. The 4-Sector also includes 2
“lower risk” scenarios. These forecasts reflect lower
revenue projections than the base forecasts - they may
either be slower growth or an actual decline in
revenues.
As noted, 2 of the FAC panelists suggested that the risk
of Arizona entering another recession over the forecast
horizon was 0%. The U.S. economy has experienced a
total of 11 recessions in the post-World War II era. Many
of these recessions resulted from unexpected economic
events, or shocks, such as the oil embargo in 1973 and
the 9/11 terrorist attack in 2001.
Given the inability of economic forecasters to predict
unexpected events, JLBC Staff believes it is prudent to
assume more than a 0% chance of a recession in the
near term. This is especially true considering the
weakness of the ongoing economic recovery, which
makes the current economy even more susceptible to
shocks than under more normal circumstances.
I.H.S. Global Insight, a large forecasting company that
provides economic forecasts for the U.S. and other
nations, is currently placing the odds of another
recession within the year at 20%. This recession scenario
assumes a surge in oil prices due to further deterioration

in U.S. - Iran relations and panic in financial markets as
Europe’s sovereign debt problems become increasingly
severe. Under this “20% probability” scenario, the U.S.
economy would contract in the second half of 2012 as
the labor market weakens, housing foreclosures rise, and
household income declines.
As a result, JLBC Staff continues to believe that a
recession scenario has an appropriate role in the current
4-sector forecast. The magnitude of the UA (2.5%)
downturn is debatable, but the possibility of such a
scenario should not be dismissed.
Comparison with Executive Revenue Estimates
With the release of the April 4-sector scenario, there has
been renewed discussion of the Executive’s Revenue
estimates. The Executive states their FY 2013 base
growth rate is 5.0%.
When comparing the revenue estimates of the various
forecasts, a common starting point is base revenue. This
base estimate is designed to reflect the underlying
growth in the economy and excludes tax law changes,
Urban Revenue Sharing, and other one-time factors.
The January 4-Sector reflects FY 2013 base revenue
growth of 5.1%. In comparison, the Executive has said
their FY 2013 base growth rate is lower - 5.0%. Since the
Executive’s forecast exceeds the January forecast by
$133 million in FY 2013, there are clearly methodological
differences in the JLBC and Executive estimate. After
analyzing the 2 estimates, the primary issue is the
treatment of Urban Revenue Sharing to cities, which is
based on 15% of income tax collections from
2 years prior.
Due to the recovery of income taxes in FY 2011, Urban
Revenue Sharing (URS) will increase by $89.2 million, or
21% in FY 2013. The JLBC estimates exclude the URS
changes. The Executive has chosen to apply this
General Fund revenue loss to their growth rate. This
adjustment, however, artificially dampens their
projected growth. After adjusting for this issue and other
methodology differences, the Executive growth rate is
6.4% compared to 5.1% in the January forecast. Please
see Comparison of Legislative and Executive Revenue
Estimates for more information.
Table 2 summarizes these different base revenue
projections:
Table 2

January 4-Sector
April 4-Sector
April Alternate
Executive
Adjusted Executive 1/

FY 13
5.1%
3.4%
5.0%
5.0%
6.4%

____________
1/ Reflects same calculation method as JLBC

3 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

March Revenues
Table 3

General Fund Revenues ($ in Millions)

March
Year-to-Date

“… the trend of
income tax
refunds
reversed in
March, with
the number of
refunds
processed
decreased
compared to
March of last
year.”

FY 2012
Collections
$ 626.4
$ 6,391.1

Sales Tax collections were $372.4 million, or
3.9% above March 2011 and $2.6 million above
the January JLBC Baseline forecast for the
month. Excluding the $72.3 million from the
temporary 1-cent sales tax increase,
collections were $297.2 million, or 3.3% above
March 2011. The temporary 1-cent continues
to grow more than the base tax because of
certain exemptions.
Year-to-date, base sales tax collections are
5.1% above the prior year and are $2.8 million
above forecast.
Table 4 displays the March growth rates for the
largest categories.
Table 4

March
6.8%
(3.5)%
4.4%
(5.6)%
4.1%

YTD
6.6%
8.6%
0.8%
4.6%
7.8%

Retail and contracting together account for
about 60% of all sales tax revenues. March
retail, which reflects February’s sales, grew by
6.8%. Retail began to grow in December
2010. In recent months, retail growth has
continued to grow, but at a slower rate, due
in part to the stronger base in the prior year.
This trend may continue considering the high
growth rates in February through June of last
year. Contracting collections have been
more volatile, and decreased by (3.5)% this
month.
Individual Income Tax net revenues were $72.3
million in March, or $76.9 million greater than
the prior year. Collections were $4.8 million
above the JLBC Baseline forecast. Year-todate, revenues have grown 7.2% and are
$(13.9) million below forecast.
As indicated in Table 5, withholding increased
by 2.5% in March for a year-to-date increase
of 3.1%.

Difference
From FY 2011
$ 137.1
$ 561.5

Total Payments grew by 8.7% in March for a
year-to-date increase of 29.4%.
As mentioned in the summary section, the
trend of income tax refunds reversed in
March, with the number of refunds processed
decreased compared to March of last year,
and the dollar amount of refunds less than
forecast for the month. Year-to-date,
however, as noted in Table 5, refunds are 4.5%
greater than the prior year.
Table 5

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Utilities
Use
Restaurant & Bar

Difference From
January Forecast
$ 18.5
$ 16.0

March
2.5%
8.7%
(20.5)%

YTD
3.1%
29.4%
4.5%

Corporate Income Tax net collections were
$65.9 million in March, which is $14.6 million
above the prior year. Collections were $25.0
million above the JLBC Baseline forecast. Yearto-date, collections have grown 33.6% and are
$42.1 million above forecast.
The Lottery Commission reports that March
ticket sales were $78.3 million, which is $18.3
million, or 30.5%, above sales in the prior year.
This increase in sales was primarily the result of
a record multi-state lottery jackpot of $656
million won on March 30. Year-to-date ticket
sales are $484.7 million, which is 11.6% 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 $103.1
million in March were up $4.5 million, or 4.6%,
compared to March of last year. Year-todate revenues are up 0.5% compared to the
prior year.

4 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012
Table 6

General Fund Revenue:
Change from Previous Year and January Baseline Forecast
March 2012
Current Month

FY 2012 YTD (Nine Months)

Change From
Actual

March 2011

March 2012

Amount

Change from
Actual

January Forecast

Percent

Amount

Percent

March 2011

March 2012

Amount

January Forecast
Percent

Amount

Percent

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

$297,171,837

$9,479,365

$75,218,813

4,571,876

72,291,367

76,856,435

65,888,224

14,641,527

808,578

151,777

2,116,079

687,003

48.1

2,389,224

(835,758)

(25.9)

86,160,831

(8,297,826)

(8.8)

0

0

1,186,787

65,785

$603,231,740

$97,320,184

3.3 %

($535,615)

$2,716,056,553

$132,298,745

6.5

3,097,348

4.3

676,270,290

61,704,848

10.0

6,833,479

1.0

4,776,901

7.1

2,149,273,026

144,921,442

7.2

(13,915,027)

(0.6)

28.6

25,014,658

61.2

433,438,422

108,919,795

33.6

42,138,329

10.8

23.1

1,259

0.2

11,275,819

0

0.0

18,754,363

--

-5.9
19.2 %

0
(9,023,018)
0
206,411
$23,537,944

(0.2) %

(1,563,347)
726,694

5.1 %

50,995

0.5

4.0

(226,233)

(1.2)

0.0

23,530,670

1,455,362

6.6

248,963,144

(24,323,172)

(8.9)

--

4.1 %

0.1 %

(12.2)

(9.5)
21.1

$2,784,931

289,531
(7,606,229)

1.2
(3.0)

200,825

(236,547)

(54.1)

0

0.0

1,549,431

(437,576)

(22.0)

201,783

15.0

$6,279,312,544

$423,466,244

7.2 %

$30,551,560

0.5 %

(38.3)

40,282,920

4,829,470

(8,776,686)

(17.9)

6.5

20,904,383

(298,680)

(1.4)

(755,856)

(3.5)

(7,276)

(72.8)

2,104,941

216,640

11.5

(16,909)

(0.8)

(580,584)

(21.2)

20,509,913

(6.0)

(933,948)

(4.4)

(1,334,205)

(39.6)

24,963,156

5,728,918

29.8

--

0

(27,146,306)

(100.0)

12,695,916

(2,403,688)

(15.9)

Other Revenue
Lottery

5,461,740

(200,800)

(3.5)

License, Fees and Permits

2,702,210

462,850

20.7

Interest

2,724

Sales and Services

2,152,904

Other Miscellaneous

2,034,730

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

(3,102)
276,358
(1,226,251)

0

0

481,565

279,441

12,835,873
$616,067,613

(411,504)
$96,908,680

(53.2)
14.7
(37.6)
-138.3
(3.1) %
18.7 %

(3,385,324)
165,327

0
138,204
(5,003,858)
$18,534,086

40.3
(28.0) %

121,461,230

3.1 %

$6,400,773,773

(1,299,184)

(20,372,828)
$403,093,416

13.6

(14.4) %
6.7 %

2,465,781

11.0

0
(6,534,854)
(14,552,471)
$15,999,089

-(34.0)
(10.7) %
0.3 %

Other Adjustments
Urban Revenue Sharing
Budget Plan Transfers
Tax Recovery Program

(35,368,620)

4,131,923

45,692,062

36,044,798

-373.6

0

0.0

(318,317,580)

37,187,307

0

0.0

295,762,375

108,317,030

-57.8

0

0.0

0

0.0

0

0

--

0

--

12,867,428

12,867,428

--

0

10,323,442

40,176,721

-- %

0

0.0 %

(9,687,777)

158,371,765

-- %

0

(0.0) %

$626,391,055

$137,085,401

28.0 %

$18,534,086

3.0 %

$6,391,085,997

$561,465,182

9.6 %

$15,999,089

0.3 %

Highway User Revenue Fund

$103,096,614

$4,512,896

4.6 %

$3,625,642

3.6 %

$901,931,502

$4,792,221

0.5 %

($6,224,710)

(0.7) %

Tobacco Tax (All Funds Total)

$0

$0

-- %

(100.00) %

$212,927,752

(979979.77)

(0.46) %

(29845948.98)

(12.29) %

Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

0.0

Non-General Funds

(29042071.00)

__________
* Total March collections including the temporary 1¢ increase approved by the voters in May 2010 were $372.4 million. This amount is $14.1 million, or 3.9%, above March 2011 and $2.6 million, or 0.7%, above forecast.
Year-to-date, total collections including the 1¢ increase were $3,392.3 million. This amount is $194.0 million, or 6.1%, above March 2011 and $9.6 million above forecast.

5 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

Economic Indicators
NATIONAL
The Conference Board’s U.S. Leading
Economic Index increase of 0.7% in February
marked the fifth straight month of growth in the
index. This reading also represents the largest
month over month percentage gain during the
last 12 months. Of the 10 components in the
index, 8 grew during February, though
improvements in financial markets accounted
for half of this gain. Consumer expectations
and new purchasing orders were the only 2
components that declined during the month.
“Consumer
prices, as
measured by the
U.S. Consumer
Price Index (CPI),
increased 0.3% in
March and 2.7%
for the year.”

The Conference Board’s U.S. Consumer
Confidence Index retreated by (1.4) points in
March, to a reading of 70.2. This amount
represents a month-over-month percentage
decrease of (2.0)% and is largely the result of a
mixed job market outlook. However,
consumers are still 10% more confident (as
measured by this index) than they were this
time last year, and several additional monthly
declines would likely have to be sustained
before consumers notably reduced
discretionary spending.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), increased 0.3% in
March and 2.7% for the year. Recent index
growth has primarily been the result of rising
energy prices, which grew 3.2% in February
and 1.9% in March. Core inflation, which
excludes energy and food prices, increased by
a more subdued 0.2% in March and 2.3% over
the past year.

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.
In February, 48 out of 50 states had increases in
their coincident indexes. Arizona’s coincident
index increased by 0.3% compared to the prior
month. Year-over-year, the Arizona index is
2.4% above last year. While this is a significant
improvement, Arizona’s index is still (12.1)%
below its peak, which occurred in August 2007.
See Tracking Arizona’s Recovery for additional
historical information.

The Federal Reserve Bank of Philadelphia also
publishes a leading index for each state that
forecasts economic conditions for the next 6
months. In addition to the coincident index,
Arizona’s leading index is based on Arizona
housing permits, Arizona initial unemployment
insurance claims, national delivery times from a
manufacturing survey, and the interest rate
spread between the 3-month and 10-year
Treasury instruments.
Using a 3-month average, Arizona’s leading
index projects that state GDP will grow at an
annualized rate of 4.4% over the next 6 months.
This is higher than the 3.8% growth projection in
January, and higher than the 2.4% projection in
February 2011.
Housing
The number of Maricopa County pending
foreclosures increased from 17,833 in February
to 18,029 in March. The March total is (65.0)%
below the peak in December 2009 (51,466).
See Tracking Arizona’s Recovery for additional
historical information.
The total housing inventory in the Greater
Phoenix area decreased from 37,630 in March
2011 to 21,863 in March 2012, a (41.9)%
decrease. In the Metropolitan Phoenix area,
the median price of a single family home was
$124,500 in February. This represents an
increase of 3.3% from January, but a (6.5)%
decrease from February of last year.
Another measure of the health of the Arizona
real estate market is permitting activity.
Single-family housing permits increased in
February 2012. For the 3-month period
through February, a total of 970 single-family
building permits had been issued statewide, a
46.4% increase from last year. See Tracking
Arizona’s Recovery for additional historical
information.
The performance of the multi-family housing
sector has been significantly better than
single-family housing. For the 3-month period
ending in February, a total of 501 multi-family
building permits had been issued in the state,
a 162.1% increase from the prior year. Even
with this growth, multi-family permitting
activity still remains (65.5)% below the peak of
activity in April 2007.

6 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

Economic Indicators

(Continued)

Employment
The latest estimate of nonfarm employment showed that
the state added 18,900 jobs in March over February.
While job gains typically occur in March, this year’s job
gain was the largest since March 2006 and more than
50% above the average increase for March over the last
10 years. It is also noteworthy that all major sectors of
the Arizona economy added jobs (month over month)
in March for only the third time over the last 6 years.
The month-over-month job gains in March came
primarily from the Leisure and Hospitality industry (+7,700
jobs) and the Construction sector (+3,800 jobs). The
private sector as a whole contributed to 97% of March’s
employment increase.
Employers in the state had 47,000, or 1.9%, more workers
on their payrolls in March than one year ago. For the
first quarter of calendar year 2012, nonfarm
employment was up by 1.7%, or 41,700 jobs, the best
performance in 5 years.
Other measures of the labor market based on
unemployment insurance data also suggest that the
Arizona economy is improving. For example, there were
(10.9)% fewer claims for first-time jobless benefits in
March than a year ago. Also, although the number of
initial claims increased from 19,799 in February to 20,523
in March, or 3.7%, this increase was significantly less than
the average March increase of 15.8% over the last 10
years. The number of initial claims filed each month is
now roughly (50)% below the peak level 3 years earlier.
The total number of claimants receiving unemployment
insurance benefits in the state each month is also on a
downward trend. The Arizona Department of
Administration (ADOA) reported 52,352 claimants of
unemployment insurance benefits in March, or (16.5)%
fewer claimants than 1 year earlier. This figure does not
include those individuals who receive extended benefits
under federal mandates. Weekly unemployment
insurance data, which includes all types of benefits,
including extended benefits and emergency
unemployment compensation, showed a total of 97,128
jobless claims for the week ending on April 7.
Compared to the same week last year, total claims
were down by (29.7)%.
The same data showed that among those claimants
who finished collecting regular benefits, the average
duration of the unemployment period was 17.4 weeks in
March compared to 18.8 weeks 1 year earlier. The
average length of unemployment in March was the
lowest since September 2009.

The state’s unemployment rate declined from 8.7% in
February to 8.6% in March. The jobless rate in the same
month last year was 9.6%. The jobless rate has been
below 9.0% for 3 consecutive months and is currently at
its lowest level since February 2009. However, Arizona’s
unemployment rate continues to exceed the national
average, which was 8.2% in March. Some analysts
believe that the jobless rate could start moving up in
future months as previously discouraged workers (those
who left the labor force) resume their job search.
Although the outlook for jobs in Arizona is growing
brighter, the way to full recovery remains long. In spite
of the positive employment news in March, the state
had still (258,500) fewer jobs that month than at the
outset of the recession in December 2007. Thus, the
state is not likely to return to peak employment levels for
at least another few years. See Tracking Arizona’s
Recovery for additional historical information.
State Agency Data
At the beginning of April, total AHCCCS caseloads
equaled 1.29 million members, a (0.8)% decrease from
the prior month. Overall AHCCCS caseloads are
currently (3.3)% below April 2011 levels.
The traditional AHCCCS population, which consists
primarily of lower-income children and their parents,
decreased (0.2)% from March and increased 5.1% 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 (93,653) since July to
130,839. Of the decline, (10,880) is attributed to
members who were transferred to the SSI program. As a
whole, the Proposition 204 program has declined (3.1)%
compared to the prior month, and (23.8)% from the prior
year.
There were 39,240 TANF recipients in the state in March,
a monthly caseload decrease of (0.5)%. Year-over-year,
the number of TANF recipients has declined by (5.7)%.
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 March,
there were a total 1.1 million food stamp recipients in

7 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

Economic Indicators

(Continued)

the state, or almost no change from the prior month.
Compared to the same month last year, food stamp
participation was up by 7.8%. The number of food stamp
recipients began increasing steadily in July 2007, after
several years in the 550,000 to 575,000 range.

The 3-month average count of the Department of
Correction’s (ADC) inmate population increased to 39,918
inmates between January 2012 and March 2012.
Relative to the prior 3-month period, the population has
increased by 17 inmates. Compared to a year ago, the
population has declined by (152) inmates.

Table 7

ECONOMIC INDICATORS
Indicator
Arizona
- Unemployment Rate (SA)
- Initial Unemployment Insurance Claims
- Unemployment Insurance Recipients
- 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 Home Sales
Single-Family
Townhouse/Condominium
- Greater Phoenix Median Home Price
Single-Family
Townhouse/Condominium
- Greater Phoenix S&P/Case-Shiller Home Price Index
(Jan. 2000 = 100)
- Foreclosure Activity, Maricopa County
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 Leading Index -- 6 month projected growth rate
- 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

March
March
March
March
March
March
February
Jan-Mar
Jan-Mar

8.6%
20,523
52,352
2.46 million
150,500
114,400
41.2
$32.1 million
$159.1 million

(0.1)%
3.7%
(2.9)%
0.8%
0.2%
3.4%
0.0%
(3.4)%
0.2%

(1.0)%
(10.9)%
(16.5)%
1.9%
1.2%
6.0%
2.7%
2.8%*
5.1%*

Dec-Feb
Dec-Feb

970
501

19.1%
59.3%

46.4%
162.1%

February
February

8,186
1,424

3.3%
16.8%

(4.4)%
(2.5)%

February
February
January

$124,500
$77,500
102.84

3.3%
10.7%
0.9%

(6.5)%
(8.8)%
1.3%

March
March
February
January

18,029
21,863
3.15 million
$5.15

1.1%
(7.9)%
(2.6)%
2.8%

(49.2)%
(41.9)%
5.6%
(20.0)%

1st Quarter 2012
February
Dec-Feb
4th Quarter 2011
July 1, 2011
April

March
March
Jan-March

69.5
180.90
4.4%
$235.5 billion
6.48 million
1,293,637
888,632
130,839
152,316
11,142
52,128
58,580
39,240
1,141,247
39,918

20.9%
0.3%
0.6%
0.9%
N/A
(0.8)%
(0.2)%
(5.4)%
(0.9)%
(4.3)%
0.2%
1.7%
(0.5)%
0.0%
17 inmates

10.7%
2.4%
2.1%
4.5%
1.1%
(3.3)%
5.1%
(100.0)%
(40.8)%
1.3%
(44.8)%
2.3%
32.9%
(5.7)%
7.8%
(152) inmates

February
February

18,368
25,481

(49)
(149)

(709)
(585)

4th Quarter 2011
(3rd Estimate)
March
February
Dec-Feb
March

$13.4 trillion

3.0%

1.6%

70.2
95.5
$4.35 billion
229.1

(2.0)%
0.7%
(1.7)%
0.3%

10.0%
3.0%
(5.8)%
2.7%

8 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

JLBC Meeting
At its April 3, 2012 meeting, the Joint Legislative Budget
Committee considered the following issues:

6.6% or 7.26% depending on the grade level. The
Committee did not approve either adjustment.

Arizona Department of Administration – Review of
Requested Exchange of Fund Transfers for the
Department of Environmental Quality – The Committee
gave a favorable review of the DEQ request to replace
or modify the fund source for 2 of their enacted budget
fund transfers.

Arizona Commerce Authority – Review of Application
Fees for Incentive Programs – The Committee gave a
favorable review of the Authority’s proposed fee
schedule.

Department of Environmental Quality – Review of Waste
Fee Rules – The Committee gave a favorable review of
DEQ’s proposed changes to certain waste fees. Overall,
the changes would decrease solid waste fee collections
while increasing revenues from hazardous waste fees.
The new fees are scheduled to become effective in FY
2013.
School Facilities Board – Consider Approval of Index for
School Facilities Board (SFB) Construction Costs – The
Committee considered 2 different adjustments in the
cost-per-square-foot factors used in SFB funding
formulas. One option was a 2.1% adjustment based on
the average of the change in a national and Phoenix
based construction cost index. The other option was
based on the SFB Staff request to adjust the factors by

Attorney General – Review of Uncollectible Debts – The
Committee gave a favorable review of the Attorney
General’s FY 2009 and FY 2010 listing of uncollectible
state debts.
As a result of the favorable review, the State Comptroller
is authorized to remove $19.1 million of uncollectible
debts from FY 2009 and $31.9 million of uncollectible
debts from FY 2010 from the state accounting system.
Department of Education – Report on Education
Learning and Accountability System – The Committee
heard an information only item from Superintendent of
Public Instruction, John Huppenthal. The Superintendent
gave an overview of current issues regarding Arizona
Department of Education (ADE) data systems and
indicated that ADE needs $32.5 million in order to
replace its existing systems

JCCR Meeting
At its March 27, 2012 meeting, the Joint Committee on
Capital Review considered the following issues:
Arizona Department of Corrections – Review of Revised
FY 2012 Building Renewal Allocation Plan – The
Committee gave a favorable review of the
department’s proposal to make security improvements
at the Cibola Prison Unit.

Northern Arizona University – Review of Energy Services
and Performance Contract – The Committee gave a
favorable review of Northern Arizona Universities’ $18.0
million financing plan to fund a variety of energy
conservation projects. The projects will be essentially
funded from energy savings.

Summary of Recent Agency Reports
Public Safety Personnel Retirement System – Report on
Shared Cost Structure, Funding Status and Rate of Return
– Pursuant to A.R.S. § 38-848.02, the Public Safety
Personnel Retirement System (PSPRS) is required to report
annually on the shared cost structure of the employees
and employers, the funding status and the rate of return
for the system. PSPRS reported that the FY 2013 PSPRS
employee contribution rate is set at 9.55%. The
aggregate employer contribution rate is 27.18% and
individual employer contribution rates, which range from
5.00% to 136.04%, are available on the PSPRS website.

PSPRS had an overall funded status of 61.9% in FY 2011.
The funded status of each employer is also available on
the PSPRS website and ranges from 11.60% to 265.90%.
Last year, the one-year market rate of investment return
for the system was 17.5%. To calculate contribution rates,
PSPRS uses a 7-year smoothing period which had a rate
of return of 4.4%. (Marge Zylla)

9 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

March Spending
March 2012 General Fund spending was $345.9 million.
March expenditures were less than the prior year
primarily due to the timing of education formula
payments.

•

•

FY 2012 Spending
March 2012 spending of $345.9 million was $(74.0) million
less than March 2011 (See Table 8).

•

In March, Universities spending was $(15.4) 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.
Economic Security spending decreased by $(24.2)
million from the previous year to $5.2 million. This
decline was primarily due to operating transfers
among agency funds and does not reflect actual
expenditures.
The Department of Education spent $64.5 million, or
$(31.7) million less than the previous year due to the
timing of formula payments.

Table 8

General Fund Spending ($ in Millions)

March 12
Agency
AHCCCS
Corrections
Economic
Security
Education
Health Services
Public Safety
School Facilities
Board
Universities
Leaseback Debt
Service
Other
Total

Change
from
March 11

Year to
Date

YTD
Change
from FY 11

125.7
67.2
5.2

(3.8)
8.0
(24.2)

1,189.3
677.3
496.1

45.5
26.0
3.5

64.5
9.6
1.2
0.1

(31.7)
(12.2)
(0.1)
(0.1)

2,662.5
562.6
39.7
163.6

(18.0)
60.7
4.6
96.6

41.5
0.0

(15.4)
0.0

597.0
49.1

(124.3)
(3.0)

30.9
345.9

5.5
(74.0)

270.3
6,707.5

(78.3)
13.3

10 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012
Table 9

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
March 12
March 11
696.9
(964.1)
60.8
59.5
749.4
99.3
125,676.2
(3,774.1)
1,065.0
57.6
53.9
2.4
51.8
2,625.0

25.1
2,541.8

33.1
67,236.9
1,107.8
5,237.0
64,497.5
257.6
13.4
22.2
51.2
172.6
48.4
189.4
57.5
417.1
97.1
9,611.2
177.5
41.6
405.2
3.9
339.6
1,076.4
9,492.3
913.7
2,978.4
21.8
4.7

2.4
8,041.1
51.8
(24,231.9)
(31,654.9)
(449.6)
4.1
4.7
(11.4)
23.0
(70.0)
150.3
16.0
(39.0)
318.3
23.5
(12,219.0)
7.5
17.3
404.5
2.4
(5.4)

1,295.0
1,004.6
142.5

Year-to-Date
12,006.0
49,050.7
617.2
5,750.3
1,189,303.2
12,415.0
463.6
545.6
23,625.0
51,433.0
387.4
677,268.6
15,373.7
496,090.9
2,662,511.5
4,790.9
7,000.0
129.9
431.4
592.7
1,978.7
1,289.1
3,602.3
648.4
(3.1)
3,490.6
1,356.1
462,599.3
2,402.8
517.8
3,447.3
35.2
3,849.8

YTD Change from
FY 11
(4,179.0)
(3,016.2)
(48.1)
(838.6)
45,522.0
(379.3)
(64.3)
(6.6)
20,728.3

421.2
1,106.3
327.6
796.2
(110.5)
0.6

10,744.0
56,857.8
10,104.2
34,658.1
743.9
42.4

(47,886.8)
(80.0)
26,023.0
(716.7)
3,488.4
(18,024.6)
(3,664.2)
(0.6)
(8.6)
(36.5)
(89.5)
(121.0)
(353.0)
1,606.1
107.2
(384.3)
(1,389.7)
(58.2)
60,655.1
(2,368.6)
(46.0)
3,446.6
(11.3)
(557.1)
(5,246.6)
1,033.3
(1,201.5)
(5,752.6)
(1,729.7)
(12.5)

233.0
156.2
29.4

13,000.0
9,085.6
1,471.8

(339.2)
(210.9)
(131.3)

11 JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2012

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

March 12
311.3
580.0
20.5
86.6
6.5
8.9
1,200.0
37.8
44.6
136.9
2,472.8
63.2
559.7
12.4
5.8
28.5
169.2
18,003.1
6,431.6
16,872.6
456.8
396.1
79.8
345,911.2

Change from
March 11
40.1
(13.4)
3.6
22.0
(8.7)
1.5
(187.8)
(0.5)
(431.7)
(71.7)
44.6
(17.9)
642.0
(2.4)
(243.9)
(3.0)
4.9
(120.0)
(632.7)
(7,432.6)
(2,120.3)
(5,262.5)
387.4
(7.1)
18.9
(46.0)
(74,043.9)

Year-to-Date
3,900.2
6,147.8
41.7
827.0
110.2
1,577.1
1,396.8
39,690.4
2,772.1
1,077.6
1,764.6
35,233.0
163,649.6
7,004.3
192.8
37.6
2,112.1
15,903.3
261,933.4
88,379.4
230,783.0
6,089.9
3,725.0
789.4
679.4
6,707,525.8

YTD Change from
FY 11
248.9
(423.5)
(319.7)
(36.2)
(815.8)
3.6
(20,000.0)
396.0
785.9
4,620.0
(768.7)
46.3
(8.3)
(444.2)
3,921.6
96,555.6
(5,107.9)
(7.0)
0.2
109.7
(652.5)
(57,252.2)
(19,081.5)
(47,361.4)
(3,209.6)
(1,464.9)
(43.8)
(77.3)
13,270.3