JLBC - Monthly Fiscal Highlights

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

Summary
The state’s fiscal year ended on June 30th.
However, the state continues to process
transactions into July before closing the books.
While the General Accounting Office issues its
preliminary report on FY 2012 in mid-September,
data received so far allows us to draw several
preliminary conclusions on the fiscal year
overall:

•

•
www.azleg.gov/jlbc.htm

•
“We currently
project that the

•

FY 2012 ending
balance will be

•

$257 million
higher than
budgeted. This
translates into a
projected FY
2012 ending

July 2012

•

General Fund ongoing base revenues
grew by 6.3% during FY 2012. In June alone,
General Fund base revenues were 7.9%
higher than June 2011.
Total FY 2012 revenues (including base and
one-time collections) equaled $9.04 billion,
or 7.8% above FY 2011.
At this time, year to date General Fund
revenues are $145 million above the
enacted budget forecast.
Total FY 2012 General Fund spending is
estimated to be $8.66 billion, including a
$250 million deposit to the Budget
Stabilization Fund (BSF). Excluding the BSF
deposit, FY 2012 spending grew by 0.6%
Year to date General Fund spending is
estimated to be $(112) million below
budgeted levels. This is primarily due to
lower than expected spending in “formuladriven” agencies such as AHCCCS and the
Department of Education (ADE).
The enacted May budget assumed a FY
2012 ending balance of $122 million. Given
$145 million in unanticipated revenue and
an estimated $112 million in lower than
expected spending, we currently project
that the FY 2012 ending balance will be
$257 million higher than budgeted. This

•

•

•

translates into a projected FY 2012 ending
balance of $379 million. This estimate is likely
to be revised as the state closes its books.
Higher than expected FY 2012 revenues
may serve as a base for increased
collections in the current budget year (FY
2013). In addition, lower than budgeted FY
2012 caseload spending may result in
revised FY 2013 formula spending.
The enacted budget included a 3-year
budget projection. The budget assumed a
FY 2013 ending balance of $249 million,
which declined to a $(486) million shortfall in
FY 2015. The unbudgeted FY 2012 gain of
$257 million would help reduce that longterm shortfall.
The status of the FY 2013-2015 budget
projections will be updated at the next
Finance Advisory Committee (FAC)
meeting this fall. While any additional FY
2012 resources may impact the end result of
FY 2013 – FY 2015, major uncertainties
remain about economic growth, federal
budget negotiations, and federal health
care changes.

FY 2012 Revenues
FY 2012 continued the state’s growth in General
Fund base revenue from FY 2011 after several
years of decline. Based on preliminary
information, FY 2012 base revenues grew by
6.3%. Base revenues exclude the balance
forward and changes such as one-time
revenues and urban revenue sharing.
Including all one-time adjustments, FY 2012
General Fund revenues totaled $9.04 billion,

balance of $379
million.”

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
July 23, 2012.

Table of Contents
Summary...................................................................1

Summary of Recent Agency Reports

• FY 2012 Revenues................................................1

• ADOA – Premium Holiday Report.................... 8

• FY 2012 Spending ................................................2

• DES – Training Program at Coolidge............... 8

• FY 2012 Ending Balance.....................................2

• ADE – Federal Monies for English Learners..... 9

• Long-Term Implications ......................................2

• DPS – Pinal Immigration Enforcement ............ 9

• Ballot Proposition Fiscal Notes...........................2

• Public Program Eligibility Report ...................... 9

June Revenues ........................................................3

• Parks – Report on Out-of-State Travel............. 9

Economic Indicators ..............................................5

• Universities – Performance Funding Report ... 9

JLBC/JCCR Meetings ........................................... 8

June Spending...................................................... 10

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JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

Summary

(Continued)

which is $145 million above the budgeted forecast (see
page 3 for more detail). Even with substantial growth in FY
2012, however, revenues remain below their peak levels in
FY 2007.
The revenue growth in FY 2012 was broad based across
the state’s major “Big 3” tax categories. As displayed in
Table 1, these major categories all posted growth rates of
at least 6% and exceeded the budget forecast.
Table 1

Sales*

Growth Rates Compared to
Prior Year By Revenue Category
Budgeted
Prelim. Actual
4.8%
6.0%

Ind. Income
Corp. Income

6.8%

7.8%

10.3%

14.9%

* Without 1-cent

FY 2012 Spending
FY 2012 projected General Fund spending totaled $8.66
billion. Based on available data, this spending level is
projected to be $(112) million below the budgeted level.
This lower amount is largely based on 3 factors:

•
•
•

AHCCCS – The state’s Medicaid program, particularly
coverage for childless adults, has fewer program
participants than forecasted
ADE – The state’s preliminary student count growth of
0.7% was slower than expected in FY 2012
Dept. of Corrections (ADC) – The decline in inmates
during the year may have resulted in some
efficiencies although ADC may still be adjusting its
final spending level during FY 2013

The state’s fiscal health can also be measured by the
operating fund balance. The state pays its bills out of the
operating fund balance, which consists of the General
Fund and certain dedicated funds. During the recession in
December 2009, the state borrowed as much as $900
million from internal state funds and an outside bank in
order to pay its bills. Since then, the operating balance is
no longer negative and had grown to $1.5 billion at the
end of FY 2011. By the end of FY 2012, this balance had
grown to $2.4 billion. Due to several rollover payments at
the beginning of the fiscal year, the operating balance
has declined to $1.6 billion as of July 19.
Long-Term Implications
Since the FY 2012 ending balance is projected to be
approximately $257 million greater than previously
estimated, these monies will be available to a varying
extent in FY 2013 – FY 2015. The budget assumed a FY
2013 ending balance of $249 million, which declined to a
$(486) million shortfall in FY 2015.
These projected estimates, however, will depend on
several issues:

•

•

The exact magnitude of savings related to lower
expenditures will not be known until the end of July – the
state continues to process spending transactions into the
“13th month” before closing the books.
FY 2012 Ending Balance
After the end of the “13 month” period, the state’s books
are officially closed. After that period it will take several
months to confirm year-end adjustments and to officially
determine the state's fiscal year ending balance. The
General Appropriation Act requires the Executive Branch
to provide a preliminary estimate of the FY 2012 ending
balance by September 15, 2012. By law, the Department
of Administration is required to publish its final FY 2012
accounting by December 1, 2012.
With $145 million in “above forecast” revenue and $112
million in lower spending, there is an additional $257 million
in available resources. The enacted May budget
assumed that the state's General Fund year-end FY 2012
cash balance would be $122 million, excluding any
monies set aside in the BSF. The divergence of revenue
and spending figures from budgeted levels results in a
projected FY 2012 ending balance of $379 million.

•

•

Future General Fund revenues could be higher than
budgeted in light of the greater FY 2012 revenue
base. This higher base, however, could be offset by
changing economic conditions and the outcome of
federal budget negotiations. Several major federal
tax provisions may expire and automatic federal
spending reductions could occur in January 2013 (see
the August 2011 Monthly Fiscal Highlights for more
information).
George Mason University recently studied the impact
of these potential federal spending reductions. The
study estimated that those reductions could reduce
Arizona Gross State Product (GSP) by $2.5 billion. Since
Arizona’s General Fund tax revenues are
approximately 2.9% of GSP, a $2.5 billion loss could
reduce state tax collections by an estimated $70
million annually.
It is unclear whether FY 2012’s lower than expected
funding formula spending will carry into future years. A
significant component of the greater than expected
FY 2012 revertment is associated with declining
Proposition 204 childless adult coverage and the
future status of this population under federal health
care is yet to be determined. K-12’s lower than
budgeted cost is more likely to continue in subsequent
years.
Any future ending balances may be affected by
decisions on continuation of existing funding formula
suspensions, which total $700 million in spending.

Ballot Proposition Fiscal Notes
During July, JLBC Staff also published its estimated fiscal
impacts of ballot measures for voter initiatives. Please see
2012 Ballot Initiative Fiscal Notes for more information.

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

June Revenues
Table 2

June
Year-to-Date

General Fund Revenues ($ in Millions)
FY 2012
Collections
$ 1,084.5
$ 9,039.5

Difference From
Budget Forecast
$ 79.4
$ 145.5

Sales Tax collections were $387.0 million, or 5.0%
above June 2011 and $33.3 million above the
budget forecast for the month. Excluding the
$79.9 million from the temporary 1-cent sales tax
increase, collections were $307.2 million, or 14.5%
above June 2011.
“Year-to-date,
base sales tax
collections are
6.0% above
the prior year
and are $41.0
million above
forecast.”

A large portion of the 14.5% increase for June
was due to the use tax category. Use tax is
assessed on items purchased in other states and
brought into Arizona for which no tax (or tax at
a lesser rate) has been paid in another state.
There was almost no use tax collected in June
of last year, compared to collections of almost
$19 million this year. Adjusting for use tax, the
June sales tax increase would have been
reduced to a more modest 6.5%
Year-to-date, base sales tax collections are 6.0%
above the prior year and are $41.0 million above
forecast.
Table 3 displays the June growth rates for the
largest categories.
Table 3

Sales Tax Growth Rates
Compared to Prior Year
June
Retail
(2.5)%
Contracting
7.5%
Utilities
(1.9)%
Use
N/A
Restaurant & Bar
4.0%

YTD
5.0%
7.5%
0.9%
15.0%
7.4%

Retail and contracting together account for
about 60% of all sales tax revenues. June retail,
which reflects May sales, decreased by (2.5)%.
As we have noted in prior reports, the retail
category began to grow in December 2010.
In recent months, retail growth has continued,
but at a slower rate, due in part to the stronger
base in the prior year. This trend culminated
with a decrease 0f (2.5)% in June compared to
June of last year. Contracting collections have
been more volatile than retail and increased by
7.5% this month.
Individual Income Tax net revenues were $328.3
million in June, or 5.0% greater than the prior
year. Collections were $(4.9) million below the
budget forecast. Year-to-date, revenues have
grown 7.8% and are $27.9 million above forecast.

Difference
From FY 2011
$ 98.8
$ 655.8

The June decline relative to the forecast was
the result of slightly less than expected
withholding tax collections and final payments,
as well as higher than anticipated refunds.
As indicated in Table 4, withholding increased
by 2.5% in June. June reflects the second
month of modest collections after an 11.8%
increase in April.
Total estimated and final payments were $87.7
million in June, compared to $81.5 million in
June of last year.
Refunds of $(18.2) million were $3.3 million less
than last year’s amount.
Table 4
Individual Income Tax Growth Rates
Compared to Prior Year
June
YTD
Withholding
2.5%
3.3%
Estimated +
Final Payments
7.7%
17.9%
Refunds
(15.3)%
2.8%
Corporate Income Tax net collections were
$110.1 million in June, which is 0.7% above the
prior year. Collections were $12.0 million above
the forecast. Year-to-date, collections have
grown 14.9% and are $26.1 million above
forecast.
The Lottery Commission reports that June ticket
sales were $51.8 million, which is $5.5 million, or
12.0%, above sales in the prior year. Year-todate ticket sales are $646.7 million, which is
10.8% above last year’s sales. While sales
increased, net General Fund revenues actually
declined due to the payment of debt service
for the Lottery Revenue Bonds issued in FY 2010.
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 $105.4 million in
June were up $3.2 million, or 3.1%, compared to
June of last year. Year-to-date revenues are
0.5% greater than the prior year.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012
Table 5

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

FY 2012 YTD (Twelve Months)

Change From
June 2011

Actual
June 2012

Percent

Amount

Change from
January Forecast

Actual

Percent

Amount

June 2012

June 2011

January Forecast
Percent

Amount

Percent

Amount

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

$307,175,602

38,914,385

$79,866,342

(20,657,487)

(20.5)

6,780,961

9.3

328,290,025

15,779,561

5.0

(4,943,053)

(1.5)

9.5 %

$3,654,934,348

$206,917,362

915,835,542

51,333,933

5.9

6.0 %

$41,049,848
21,502,842

1.1 %
2.4

3,086,137,360

222,479,382

7.8

27,875,060

0.9

0.7

11,976,716

12.2

643,771,756

83,536,103

14.9

26,082,456

4.2

2,377,871

(1,803,100)

(43.1)

(2,484,008)

(51.1)

15,887,896

(4,445,607)

(21.9)

(4,112,104)

(20.6)

Luxury - Tobacco

1,986,624

(186,159)

(8.6)

0

0.0

23,781,294

(1,285,599)

(5.1)

(884,506)

(3.6)

59,005

8.0

0

0.0

30,419,552

1,886,917

6.6

1,424,652

4.9

(9.0)

394,027,085

(19,715,456)

(4.8)

(5,972,915)

(1.5)

Insurance Premium
Estate
Other Taxes
Sub-Total Taxes

799,598
67,297,021

727,139

26,530,064

Property
- Liquor

110,131,308

14.5 %

(4,766,325)

0

0

123,762

81,339

$898,048,153

$28,148,358

(6.6)
-191.7
3.2 %

(6,679,610)
0
(2,914,449)
$28,266,621

--

200,825

(236,547)

(54.1)

(95.9)

1,781,731

(2,415,551)

(57.6)

3.2 %

$8,766,777,390

$538,054,937

6.5 %

25
(2,718,269)
$104,247,090

0.0
(60.4)
1.2 %

Other Revenue
Lottery
License, Fees and Permits
Interest
Sales and Services

21,765,400

(8,624,640)

(28.4)

2,531,474

(727,462)

(22.3)

(12,029)
1,703,724

(1,299,670)

(1.6)

4,709,960

6.2

27,707,460

(521,428)

(1.8)

(1,264,541)

(4.4)

--

(2,870,179)

--

4,557,734

(9,596,817)

(84.9)

25,900,280

(11,411,282)

(30.6)

6.4

39,268,523

254.2

85,498,730

13,925,167

20,239,282

35.2

95,688,282

8,109,691

(6,886,381)

(95.1)

18,799,551

(7,716,982)

54,719,201

3,303,042
77,818,600

Sub-Total Other Revenue

80,140,360

(17.7)

(85.3)

77,818,600

TOTAL BASE REVENUE

112.7

(2,677,834)

Disproportionate Share

357,767

(542,916)

(9,848,634)

Other Miscellaneous
Transfers and Reimbursements

11,532,894

(10,327,354)

-(96.7)

257

0.0

(442,266)

(8.8)

(12,099,720)

(31.8)

19.5

44,498,730

108.5

9.3

20,239,282

26.8

(29.1)

(14,414,249)

(43.4)

158,884,137

48,915,718

44.5 %

51,144,406

47.5 %

338,292,398

1,085,755

0.3 %

41,227,197

13.9 %

$1,056,932,290

$77,064,076

7.9 %

$79,411,027

8.1 %

$9,105,069,787

$539,140,692

6.3 %

$145,474,287

1.6 %

Other Adjustments
Urban Revenue Sharing
Budget Plan Transfers
Tax Amnesty
County Contributions
Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(35,368,620)

4,131,923

24,315,998

13,571,478

0

0

38,600,000

4,000,000

-126.3
-11.6

0

0.0

(424,423,440)

49,583,076

0

0.0

306,403,500

49,222,396

13,867,400

13,867,400

38,600,000

4,000,000

0
0

-0.0

(65,552,540)

-19.1
-11.6

0

0.0

0

0.0

0

0.0

0

0.0

27,547,378

21,703,401

371.4 %

0

0.0 %

116,672,872

-- %

0

(0.0) %

$1,084,479,668

$98,767,477

10.0 %

$79,411,027

7.9 %

$9,039,517,248

$655,813,565

7.8 %

$145,474,287

1.6 %

$105,350,190

$3,178,404

3.1 %

$2,258,878

2.2 %

$1,210,586,447

$5,513,329

0.5 %

Non-General Funds
Highway User Revenue Fund

($5,332,334)

(0.4) %

__________
* Total June collections including the temporary 1¢ increase approved by the voters in May 2010 were $387.0 million. This amount is $18.3 million, or 5.0%, above June 2011 and $33.3 million, or 9.4%, above forecast. Yearto-date, total collections including the 1¢ increase were $4,570.8 million. This amount is $258.3 million, or 6.0%, above June 2011 and $62.6 million above forecast.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

Economic Indicators
NATIONAL
The Conference Board’s U.S. Consumer
Confidence Index declined by (3.7)% in June
to 62.0. The reading represents the index’s
fourth consecutive month of decreases,
though the June value was still 7.6% above
June 2011. Concerns over a looming
European debt crisis and worsening
expectations of employment and growth
outweighed optimism from reduced gasoline
prices.
“Consumer
prices, as
measured by the
U.S. Consumer
Price Index (CPI),
remained flat in
June and
increased by
1.7% over last
June.”

The Conference Board’s U.S. Leading
Economic Index increase of 0.3% in May
followed a (0.1)% drop in April. The index’s
increase in May was largely driven by growth in
building permits and the Institute For Supply
Management’s New Orders Index. Growth in
the index was restrained though, by a
decrease in the length of the average work
week.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), remained flat in
June and increased by 1.7% over last June.
This flat monthly growth in June followed the
index’s first monthly price decrease in two
years in May. In June, a third month of
decreases in energy prices helped to offset
price increases of 0.2% in food and all other
items.
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 May, 34 out of 50 states had increases in
their coincident indexes. Arizona’s coincident
index increased by 0.1% compared to the prior
month. Year-over-year, the Arizona index is
2.7% above last year, which is the 22th highest
growth in the country. While this is a significant
improvement, Arizona’s index is still (11.7)%
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 3.3% over the next 6 months.
This is lower than the revised 3.8% growth
projection in April, and higher than the 1.7%
projection in May 2011.
Employment
According to the Arizona Department of
Administration’s employment report for June,
the state lost a total of (39,800) nonfarm jobs
between May and June. The state typically
loses jobs in June with the end of the school
year. More than 85% of those losses, or
(34,100) jobs, occurred in the government
sector, primarily state and local education.
The average net loss of government jobs for
June in the prior 10 years is (36,000) jobs. It
should be noted, however, that June’s
government net job losses would have been
higher if not for the fact that some of the
losses that typically occur in June occurred in
May this year due to school scheduling
changes.
The private sector shed (5,700) jobs between
May and June, which was slightly higher than
the 10-year average of (3,500) job losses. On
the positive side, however, the month-overmonth net job loss in the private sector in June
was the smallest in 5 years. The private sector
job losses were primarily concentrated to 3
industries: professional and business services (2,500 jobs), educational and health services (3,500 jobs) and leisure and hospitality (-4,000)
jobs.
The construction sector added 1,400 jobs in
June, which also marked the 4th consecutive
month with month-over-month net job gains
in this industry. The manufacturing industry
expanded its payrolls in June by adding 700
net new jobs. Most of these gains occurred in
the higher-paying durable goods sector of
the manufacturing industry.
Compared to June of last year, nonfarm
employment was up by 2.4%, or 57,300 net

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

Economic Indicators

(Continued)

new jobs, the largest year-over-year increase since
March 2007. More than 10,000 of these job gains have
come from the health care and social assistance sector.
The construction sector has also been a large
contributor with more than 9,200 jobs added to the
payrolls between June 2011 and June 2012. For the first
time since September 2009, construction employment
made up more than 5% of total nonfarm jobs.

period ending in May, a total of 160 multi-family building
permits had been issued in the state, a 93.1% increase
from the prior year. Even with this growth, multi-family
permitting activity still remains (69.5)% below the peak of
activity in April 2007.

Total nonfarm employment remains (11.0)%, or (299,100)
jobs, below peak employment in December 2007.
Some of this “job deficit” is due to seasonal variations.
Even so, the latest employment report does not change
the fact that Arizona appears to remain years away
from returning to the employment levels of 2007.

State Agency Data

See Tracking Arizona’s Recovery for additional historical
information.

The traditional AHCCCS population, which consists
primarily of lower-income children and their parents,
increased 0.3% from May and increased 2.0% from a
year ago. The total population in this program is almost
900,000. The Proposition 204 childless adult program has
not allowed new participants since July 2011 and this
population has declined (114,347) since a year ago to
110,145. Of the decline, (11,386)) is attributed to
members who were transferred to the SSI program. As a
whole, the Proposition 204 program has declined (2.5)%
compared to the prior month, and (30.6)% from the prior
year.

The state’s unemployment rate remained unchanged at
8.2% in June. The same jobless rate was reported for
April and May as well. The state’s jobless rate matched
the U.S. unemployment rate for the second month in a
row. Arizona’s unemployment rate in June 2011 was
9.6% compared to 9.1% for the nation as a whole.
Housing
The number of Maricopa County pending foreclosures
decreased from 18,596 in May to 17,910 in June. This
represents the first monthly decrease in this measure
after 3 consecutive months of increases in pending
foreclosures. The June total is substantially 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 29,203 in June 2011 to 19,857 in June
2012, a (32.0)% decrease. In the Metropolitan Phoenix
area, the median price of a single family home was
$147,000 in May. This represents an increase of 5.0% from
April, and a 14.0% increase from May of last year.
Another measure of the health of the Arizona real estate
market is permitting activity. Single-family housing
permits increased in May 2012. For the 3-month period
through May, a total of 1,515 single-family building
permits had been issued statewide, a 54.4% increase
from last year. This is the highest 3-month average since
August 2008 when there were 1,740 permits issued.
Even so, this is far below a more normal 3-month
average of 3,000 to 4,000 permits. See Tracking Arizona’s
Recovery for additional historical information.
The performance of the single-family housing sector has
continued to improve. However, multi-family housing is
still the stronger of the two sectors. For the 3-month

See Tracking Arizona’s Recovery for additional historical
information.

At the beginning of July, total AHCCCS caseloads
equaled 1.28 million members, virtually no change from
the prior month. Overall AHCCCS caseloads are
currently (6.5)% below July 2011 levels.

KidsCare provides coverage for children with incomes
above those in the traditional population. Its enrollment
has declined since a freeze was implemented in
January 2010. Enrollment declined (4.3)% compared to
the prior month and (44.0)% from the prior year.
Beginning on May 1, 2012, AHCCCS began a new
program, entitled KidsCare II. KidsCare II provides
coverage for children up to 175% of the Federal Poverty
Level. The state match is provided by voluntary
payments from political subdivisions. As of the beginning
of July, 5,444 children were enrolled in KidsCare II.
There were 39,866 TANF recipients in the state in June, a
monthly caseload increase of 0.7%. Year-over-year, the
number of TANF recipients has declined by (3.1)%. 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 June, there
were a total 1.1 million food stamp recipients in the

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

Economic Indicators

(Continued)

state, a 0.5% increase over the prior month. Compared
to the same month last year, food stamp participation
was up by 3.0%. 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 39,959
inmates between April 2012 and June 2012. Relative to the
prior 3-month period, the population has decreased by
(41) inmates. Compared to a year ago, the population has
declined by (245) inmates.

Table 6

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
- Revenue Per Available Hotel Room
- 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
Kids Care II
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

June
June
June
June
June
June
May
Apr-Jun
Apr-Jun

8.2%
23,562
58,115
2.42 million
151,900
121,600
41.9
$34.2 million
$155.1 million

0.0 %
(7.0)%
2.3%
(1.6)%
0.5%
1.2%
2.4%
6.7%
0.1%

(1.4)%
(15.7)%
(15.9)%
2.4%
1.3%
8.2%
3.7%
4.2%*
0.7%*

Mar-May
Mar-May

1,515
160

13.1%
(61.5)%

54.4%
93.1%

May
May

9,707
1,530

9.2%
(3.4)%

(3.7)%
(2.5)%

May
May
April

$147,000
$96,000
109.01

5.0%
7.8%
2.5%

14.0%
17.2%
8.6%

June
June
May
May
April

17,910
19,857
3.41 million
$55.48
$3.26

(3.7)%
(1.5)%
0.2%
(13.7%)
(33.2)%

(32.3)%
(32.0)%
(2.0)%
3.0%
(43.2)%

2nd Quarter 2012
May
Mar-May
1st Quarter 2012
July 1, 2011
July

June
June
April - June

68.6
179.11
3.3%
$237.1 billion
6.48 million
1,280,521
890,003
110,145
151,047
9,886
5,444
52,459
61,537
39,866
1,135,831
39,959

(1.3)%
0.1%
(0.5)%
0.5%
N/A
0.0%
0.3%
(5.4)%
(0.2)%
(4.3)%
185.5%
0.3%
1.2%
0.7%
0.5%
(41) inmates

32.2%
2.7%
1.6%
3.3%
1.1%
(6.5)%
2.0%
(100.0)%
(49.4)%
(4.7)%
(44.0)%
2.3%
28.6%
(3.1)%
3.0%
(245) inmates

April
April

18,164
25,629

(62)
76

(863)
(628)

1st Quarter 2012
(3rd Estimate)
June
May
Mar.-May
June

$13.5 trillion

1.9%

2.0%

62.0
95.8
$4.48 billion
228.6

(3.7)%
0.3%
(1.8)%
(0.0)%

7.6%
0.5%
(3.2)%
1.7%

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

JLBC Meeting
Attorney General – Review of Allocation of Settlement
Monies – The Committee gave a favorable review of a
total of $2.4 million resulting from 2 settlements: 1)
$395,000 from American Residential Services; and 2) $2.0
million from Abbott Laboratories.

At its June 26, 2012 meeting, the Joint Legislative Budget
Committee considered the following issues:
Review of Requested Exchanges of Fund Transfers – The
Committee favorably reviewed the request of 3
agencies to replace the fund source for 5 of their
enacted budget fund transfers.

Attorney General – Review of Uncollectible Debts – The
Committee gave a favorable review of the Attorney
General’s FY 2007 and FY 2008 listing of uncollectible
state debts. As a result of the favorable review, the State
Comptroller is authorized to remove $10.2 million of FY
2007 uncollectable debts and $15.9 million of FY 2008
uncollectible debts from the state accounting system.

Department of Administration – Review of Automation
Projects Fund – The Committee gave a favorable review
of $16.4 million in proposed FY 2013 expenditures for a
variety of automation and information technology
projects. This included the stipulation that ADOA submit
a quarterly report regarding implementation of the
funded projects.

JCCR Meeting
At its June 26, 2012 meeting, the Joint Committee on
Capital Review considered the following issues:
Arizona Department of Administration – Consider
Recommending FY 2012 Rent Exemption – The
Committee recommended a technical rent exemption
Arizona Department of Administration – Review of FY 2013
Building Renewal Allocation Plan – The Committee gave a
favorable review of the safety-related projects included in
the plan as agreed to by the Chairman. The remaining
items in the allocation plan will be considered subsequent
to receipt of additional information that addresses the Job
Order Contract process.

Department of Corrections – Review of FY 2013 Building
Renewal Allocation Plan – The Committee gave a
favorable review of the Department’s $6.4 million FY 2013
Building Renewal Allocation Plan, which consists of $4.4
million for perimeter electronic security systems and
$223,600 for maintenance and contingencies.
State Parks Board – Review of FY 2013 State Lake
Improvement Fund Capitol Expenditures – The Committee
gave a favorable review of the Parks Board’s $1.5 million
plan, mostly for electricity at Lake Havasu Park campsites.

Summary of Recent Agency Reports
Arizona Department of Administration - Report on
Implementing the State Employee Premium Holiday Pursuant to the FY 2013 General Appropriation Act, the
Arizona Department of Administration (ADOA) has
submitted its plan for implementing the state employee
health insurance premium holiday. The FY 2013 General
Appropriation Act required ADOA to implement a
premium holiday which would generate $25 million in
General Fund savings. Based on current premium
collections, ADOA reports this would be equivalent to 2.24
bi-weekly pay periods or 2.07 pay periods for
organizations with 24 pay periods. The schedule is
indicated below. With the exception of Arizona State
University (ASU) the last pay period indicated will only
have a partial reduction; for ASU, the partial reduction will
occur in the first pay period.
•
•

State Agencies – July 26, August 9, August 23
Arizona State University – November 16, November 30,
December 14

•
•
•
•

Northern Arizona University – November 2 , November
16, November 30
University of Arizona – November 2, November 16,
December 14
Arizona Power Authority – July 31, August 15, August 31
Maricopa County Superior Court Judges – August 1,
August 15, August 29

ADOA is still working with the Arizona Retirement System
and the Public Personnel Retirement System to determine
the dates for the premium holiday for retirees. Since
retirees are paid monthly, the holiday would be for 1.03
months. (Amy Upston)
Department of Economic Security - Report on Arizona
Training Program at Coolidge (ATP-C) Campus and Other
Placements - A footnote in the FY 2012 General
Appropriation Act requires the Department of Economic
Security (DES) to report on placements of
developmentally-disabled (DD) clients into state-owned
Intermediate Care Facilities for the Mentally Retarded

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

Summary of Recent Agency Reports
(ICF-MR) or at the ATP-C campus in FY 2012. DES reports
that there were no new permanent placements at the
ATP-C campus, but that there were 3 new placements
into a state-operated ICF-MR in Phoenix in FY 2012. Two
of the placements were deemed to be appropriate
because private facilities declined to accept placement
of either individual. The other placement was deemed
to be appropriate because the person, a former resident
of the Arizona Training Program at Phoenix in 1987,
required a higher level of medical attention and the
guardian of the client chose to return the client to the
state-owned ICF-MR. (Amy Upston)
Department of Education – Report on Federal Monies for
English Learners – Pursuant to A.R.S. § 15-756.10,
paragraph 3, the Department of Education (ADE)
recently submitted a report that includes an itemized list
of all federal monies received by the department for
English language learners in FY 2012. ADE received $22.4
million in federal Title III (Language Instruction for Limited
English Proficient and Immigrant Students) funding for FY
2012. Of that amount, approximately $21.1 million was
distributed directly to school districts and charter schools.
The remaining $1.3 million was used for state
administration, technical assistance, and to meet federal
set-aside requirements for immigrant education. (Steve
Schimpp)
Department of Public Safety – Report on Expenditures for
Pinal County Immigration Enforcement – Pursuant to Laws
2011, Chapter 308, the Department of Public Safety (DPS)
is required to report on the expenditure of $1,000,000 in
General Fund monies transferred to the Pinal County
Sheriff’s Office (PCSO) in FY 2012. DPS reports that, as of
May 30, 2012, PCSO has expended $983,384 and
encumbered $14,276 to purchase and support a used
McDonnell Douglas 500E helicopter. The helicopter has
been used to support PCSO anti-smuggling, search and
rescue, and criminal investigation units. PCSO reported
to DPS that they intend to expend the remaining $2,340
by June 30, 2012 for helicopter maintenance and training
costs. (Eric Billings)
Public Programs Eligibility Report – As enacted in the 2006
election, Proposition 300 limits participation in certain
state programs to citizens, legal residents, and other
persons lawfully present in the United States and requires
semi-annual reports to the Joint Legislative Budget
Committee. Below is a summary of the reports:
Community Colleges – Statewide for the spring 2012
semester, the Community Colleges reported a total of
250,099 students classified as in-state. They reported 882
students who were not entitled to be classified as in-state
because of a lack of lawful immigration status.
Additionally, 100,247 students applied for financial aid.
Of those who applied, the Community Colleges reported

(Continued)

that 234 were not entitled to any aid because they were
not lawfully present in the United States.
Universities – At the 3 universities, 126,288 students
registered for the spring 2012 semester. Of the total
students registered, the universities were able to verify the
legal immigration status of 119,688 students. Additionally,
the universities reported that 6,600 of these students did
not require verification because they had either not
requested or received in-state tuition or state supported
financial aid. The universities reported that a total of 13
students were unverifiable due to their inability to provide
the requisite documentation.
Department of Economic Security – The department
reported that 5,665 applications were received for child
care assistance during the reporting period of December
1, 2011 to May 31, 2012. Of this number, 13 were denied
because criteria for citizenship or legal residency were
not met.
Department of Education – Previously, the Department of
Education reported the number of applicants and
applicants ineligible for enrollment for the Family Literacy
Program and the Arizona Adult Education Program.
Funding for these programs was discontinued as of
December 1, 2009 and July 1, 2010, respectively, resulting
in no information to report. (James Alcantar)
State Parks Board – Annual Report on Out-of-State Travel
– Pursuant to a FY 2012 General Appropriation Act
footnote, the State Parks Board submitted a report on
out-of-state travel expenses in FY 2012. The footnote
requires a report and also stipulates that during FY 2012,
out-of-state travel expenses by State Parks Board staff
shall not exceed $5,000 from appropriated or nonappropriated monies. The Parks Board spent $200 for
out-of-state travel expenses in FY 2012. (Art Smith)
Universities – Performance Funding Report – Pursuant to a
footnote in the FY 2013 General Appropriation Act (Laws
2012, Chapter 294, Section 96), the Arizona Board of
Regents (ABOR) is to report to JLBC by July 1, 2012 on the
final allocation of performance funding for each
university. ABOR received $5.0 million in FY 2013 for a
performance-based funding model. According to ABOR,
they allocated $2.6 million to Arizona State University, $1.0
million to Northern Arizona University, and $1.4 million to
the University of Arizona. These allocations are based on
a performance funding model recently adopted by
ABOR, which includes the following: 1) incremental
degrees awarded, 2) incremental completed student
credit hours, and 3) incremental external research and
public service dollars brought into the university system.
(Leatta McLaughlin)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

June Spending
June 2012 General Fund spending was $952.4 million.
June expenditures were greater than the prior year
primarily due to the timing of Education formula
payments and a deposit to the BSF. Year to date, FY 2012
spending was $8.66 billion. This is amount is $297.5 million
above the prior year, largely due to the deposit of
monies into the BSF.

For a more detail discussion of FY 2012 spending, please
see page 2.

Table 7
General Fund Spending ($ in Millions)

June 12
Agency
AHCCCS
Corrections
Economic Security
Education
Health Services
Public Safety
School Facilities
Board
Universities
Leaseback Debt
Service
Other
Total
Budget Stabilization
Fund Deposit
Other Adjustments
Estimated “13
Month” Expend.
Statutory Reversions
Grand Total

Change
from
June 11

113.0
81.1
33.3
339.0
10.2
3.6
0.1

23.4
9.8
27.5
90.6
1.2
0.9
0.1

46.4
0.0

(9.9)
0.0

Year to
Date

YTD
Change
from FY 11

1,414.4
937.3
590.0
3,411.5
507.1
47.5
175.5

48.6
57.3
47.2
(87.2)
79.6
5.6
108.1

730.3
49.1

(160.0)
3.0
(84.4)
17.8

25.7
652.4

2.3
145.9

499.7
8,362.4

250.0

250.0

250.0

250.0

--

--

--

(20.3)

20.0

--

20.0

20.0

30.0
952.4

-395.9

30.0
8,662.4

30.0
297.5

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

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/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.
Legislative Council
Senate

June 12

Change from
June 11

Year-to-Date

YTD Change
from FY 11

1,204.9
64.4
668.6
113,049.9
2,212.3
99.6

(99.6)
14.6
64.4
23,413.3
886.5
101.4

14,846.5
49,050.7
839.6
8,001.8
1,414,356.6
17,406.5
694.7

(4,386.4)
(3,016.2)
(65.5)
(263.6)
48,581.8
608.8
60.3

59.8
2,625.0

31.8
2,294.6

740.0
31,500.0

72.6
28,061.1

118.9
81,128.7
474.5
32,969.8
338,950.1
259.3
18.7
35.5
66.6
278.4
113.3
485.7
17.2
233.1
113.5
10,174.2
211.5
47.5
266.4
4.2
338.9

50.1
9,796.9
403.5
27,450.1
90,629.0
(711.7)
(13.9)
(14.6)
5.9
(45.8)
10.3
(1,484.1)
(162.0)
(67.1)
97.3
(0.2)
1,225.3
52.0
10.4
200.0
(5.1)
21.6

68,577.3
587.8
937,259.7
20,346.8
589,988.4
3,411,517.6
6,890.4
7,000.0
191.2
528.4
799.9
2,734.0
1,748.5
6,141.0
862.9
(3.1)
4,792.6
1,789.7
507,126.8
4,228.8
669.5
4,055.6
55.1
5,171.5

(63,849.0)
(28.7)
57,293.4
(385.6)
47,239.8
(87,196.7)
(4,012.9)
(0.6)
2.1
(29.0)
(46.2)
(20.8)
(212.2)
470.6
74.0
(514.5)
(1,092.5)
(27.2)
79,552.9
(1,035.7)
(16.5)
3,952.7
(7.3)
(238.0)

2,563.0
1,221.8
3,871.2
99.7
7.7

306.0
201.0
212.7
(51.0)
4.9

94,999.6
14,041.8
46,262.4
1,230.3
62.6

(2,561.3)
(489.9)
(4,687.0)
(2,045.8)
(5.5)

(767.8)
820.1
140.9
282.1
568.0

(716.6)
1.9
24.6
(84.9)
194.0

15,411.2
12,283.6
1,968.8
4,975.7
8,457.8

(223.8)
553.6
12.2
390.7
353.5

12

JLBC – MONTHLY FISCAL HIGHLIGHTS – JULY 2012

Agency
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
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
Total
Budget Stabilization Fund Deposit
Other Adjustments
Estimated "13th Month" Expenditures
Statutory Reversions
Grand Total

June 12

Change from
June 11

Year-to-Date

YTD Change
from FY 11

89.9
6.3
42.6
3,608.0
4.7
70.4
391.8
3,554.3
126.1
1,540.1
16.5
(1.3)

(32.3)
1.5
1.3
36.9
882.7
(382.3)
55.5
199.6
(841.1)
101.1
956.5
(0.0)
4.5

41.1
1,148.4
135.6
1,611.0
1,396.8
47,470.3
2,818.7
1,436.6
2,587.9
44,438.4
175,501.4
12,698.9
256.8
50.0

(319.7)
61.7
(814.3)
13.1
(20,000.0)
44.9
176.0
5,618.4
(1,362.4)
44.0
(8.3)
(80.0)
1,468.1
108,070.7
(2,281.4)
8.6
5.3

331.0
20,798.1
7,009.2
18,257.5
491.9
533.4
134.1
289.3
652,390.8
250,000.0
-20,000.0
30,000.0
952,390.8

159.1
(4,602.8)
(1,542.7)
(3,877.6)
618.0
(156.6)
(49.1)
81.7
145,861.4
250,000.0
---395,861.4

16,986.9
322,236.5
108,251.9
282,785.6
8,338.5
5,781.6
1,161.4
5,118.0
8,362,442.7
250,000.0
-20,000.0
30,000.0
8,662,442.7

(264.3)
(73,151.8)
(24,864.8)
(61,763.9)
(3,241.3)
(861.6)
(8.7)
458.5
17,768.7
250,000.0
(20,278.7)
20,000.0
30,000.0
297,490.0