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

Summary
January General Fund revenue collections
totaled $915.1 million. Base revenues, which
exclude one-time adjustments, were 4.0%
above the prior year.
The growth in January revenues was the result
of several factors. Insurance Premium tax
collections were significantly above last year,
due to a technical timing issue.

www.azleg.gov/jlbc.htm

“[January] Base
revenues, which
exclude onetime
adjustments,
were 4.0%
above the prior

February 2013

In terms of the other major revenue
categories, overall sales tax collections (which
reflected December holiday sales) increased
by 3.3% compared to the prior year.
Beginning with the February report, the
Monthly Fiscal Highlights compares actual
revenue collections to the Baseline consensus
forecast published last month. The Baseline
forecast is based on estimates presented at
the January Finance Advisory Committee
meeting.
Total January General Fund collections were
$(1.1) million below the Baseline forecast.
Year-to-date, revenues are 3.7% higher than
last year.
In comparison to revenue of $915.1 million,
January 2013 General Fund spending was
$712.6 million, or $62.9 million above last year.
January expenditures were greater than last
year primarily due to increased K-12
enrollment and higher ADE funding levels.

year.”

Fiscal year-to-date, General Fund revenues of
$5.4 billion have been offset by $6.2 billion in
spending.
State Appropriations Limit Report
JLBC Staff is required to annually report by
February 15 on how state spending compares
to the constitutional appropriations limit. The
Arizona Constitution limits the appropriation of
certain state revenues to no more than 7.41%
of Arizona personal income. Total FY 2013
state appropriations (both General and Other
Funds) are $14.03 billion, or 5.54% of personal
income. Under the JLBC Baseline, projected
FY 2014 spending is $13.95 billion, which would
be 5.47% of personal income.
Truth in Taxation (TNT) Report
JLBC Staff recently reported the new Truth in
Taxation (TNT) rates for FY 2014, as required by
A.R.S. § 41-1276. Due to a greater than
expected decline in values for existing
properties, the JLBC Staff now estimates that
the TNT increase of the Qualifying Tax Rate
(QTR) and State Equalization Tax Rate (SETR)
will be higher than assumed in the FY 2014
Baseline. The purpose of TNT is to offset the
annual change in the value of existing
property statewide with a proportional QTR
and SETR changes.
Typically this would have no impact on the
state budget, as the additional property value
decline would be offset by further increases in
the TNT rates. For FY 2014, however, the

Table of Contents
Summary

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
February 20, 2013.

• State Appropriations Limit Report.....................1

• ADE – Report on AELAS ..................................... 8

• Truth in Taxation Report......................................1

• ABOR/Comm. Colleges – Articulation............ 8

• Working Capital Surplus Report ........................2

• ABOR – Report on Credit Hour Threshold ....... 8

January Revenues ..................................................3 • Sec. of State – Federal Election Funding ....... 9
Economic Indicators ..............................................5 • Supreme Court – State Aid to Courts Fund.... 9
Summary of Recent Agency Reports

January Spending ................................................ 10

• ACJC - State Aid Funds .....................................8

Tracking Arizona’s Recovery............. Appendix A

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JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Summary

(Continued)

change is expected to increase state costs by
$18.4 million, since the QTR and SETR rates will
hit the maximums permitted by law.
(Proposition 301 from November 2000 capped
the QTR at $4.2530 and the SETR at $0.5123.)
“The federal
government
essentially
requires the state
to purchase taxexempt
securities if the
year-end
General Fund
balance (or
“working
capital”)
exceeds 5% prior
to FY 2015.”

The additional $18.4 million cost potentially
could be offset by other formula savings
related to lower than expected enrollment.
Recent estimates of the potential offsetting
savings range from $11.5 million to $21.0
million.
Working Capital Surplus Report
In December, the Arizona Department of
Administration (ADOA) reported on the FY
2012 working capital surplus requirements for
the $1.45 billion of tax-exempt deficit
financing entered into in FY 2010. The
financing consisted of 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% prior to FY 2015.
Beginning with the FY 2015 ending balance,
the state is required to begin repayment of
the deficit financing agreements if it were
determined that working capital exceeded
5%. 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.
In its report, ADOA calculates that the excess
working capital surplus above the 5% level is
$285.2 million for FY 2012. ADOA has
indicated that under the financing
agreements, the state is allowed to monitor its
cash balance on a monthly basis, and would
only be required to purchase the securities if
monthly cash surpluses were sustained
through the fiscal year.
Given this monthly monitoring, ADOA has
reported that in January, the state ended the
month with a balance of $26.4 million. This
balance consists of the General Fund and

several other funds which the state’s uses to
pay its bills on a daily basis.
Because the state now has a positive cash
balance in its main clearing account, it is
required to begin the process of purchasing
tax-exempt securities in an effort to reach the
$285.2 million amount determined in the
annual Working Capital Surplus report. This
purchase will be done as part of the
Treasurer’s regular cash management
transactions, however, the interest earned on
these investments is expected to be 0.41% as
compared to 0.81% for typical investments.
As the cash balance is projected to improve
during the remainder of the fiscal year, it is
expected that these tax-exempt investments
will gradually increase until the state reaches
the $285.2 million amount.
At this level of investment holding, it is
estimated the state would lose approximately
$450,000 of interest earnings annually for
every $100 million diverted to the lower
earning required investments.

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JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

January Revenues
Table 1

January
Year-to-Date

General Fund Revenues ($ in Millions)
FY 2013
Collections
$ 915.1
$ 5,411.1

Sales Tax collections of $449.7 million were 3.3% above
January 2012 but $(3.2) million or (0.7)% below the
Baseline forecast for the month.
Year-to-date, sales tax collections are 4.4% above the
prior year.
January sales tax collections by category information was
not yet available at the time of publication.
Individual Income Tax net revenues were $441.6 million in
January or 4.2% more than the prior year. Collections
were $14.5 million, or 3.4% above the Baseline forecast.
Year-to-date, revenues have grown by 6.9%.
As noted last month, the large December increase
relative to the forecast was primarily the result of greater
than anticipated withholding tax collections resulting
from one more collection day in December compared
to the prior year. Collections have smoothed out in
January, which had one less collection day.
As indicated in Table 3, withholding was up 1.8% in
January. The January increase brings withholding tax
collections for the first seven months of the fiscal year to
4.8%. This amount is $18.3 million above the Baseline
forecast.
Total January estimated and final payments of $136.9
million were (13.4)% below last year. The decrease
brings total payments for the first seven months of the
fiscal year to 2.7% above the prior year and $(3.8) million
below the Baseline forecast.
Refunds in January were only $(6.3) million, which was
(84.3)% below last year. This decrease was primarily the
result of a new IRS electronic filing system, which
required Arizona to implement a new system. The new
Arizona system was implemented on January 30, when
the IRS opened the new federal system. As a result, As a
result, there were virtually no electronic income tax
returns processed in January. The Department of
Revenue expects that electronic return processing will
be caught up by the end of February.

Difference From
Baseline Forecast
$ (1.1)
$ (1.1)

Difference
From FY 2012
$ 21.7
$ (10.7)

Table 2

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated +
Final Payments
Refunds

January
1.8%
(13.4)%
(84.3)%

YTD
4.8%
2.7%
(25.4)%

Corporate Income Tax net collections were $20.8 million
in January, which is $(12.3) million less than the prior year.
January collections are typically one of the smaller
collection months. Collections
for the month were $(10.8) million below the forecast.
Year- to-date, collections are down (11.0)%.
The Lottery Commission reports that January ticket sales
were $55.4 million, which is $2.7 million, or 5.1%, greater
than sales in the prior year. Year-to-date ticket sales are
$379.7 million, which is 9.9% above last year’s sales. While
sales increased, net General Fund revenues actually
declined due to an increase in 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 $100.3 million in January were up $1.1
million or 1.1%, compared to January of last year. Yearto-date revenues are 0.2% above collections in the prior
year.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Table 3

General Fund Revenue:
Change from Previous Year and January Baseline Forecast
January 2013

Current Month

FY 2013 YTD (Seven Months)

Change From
Actual

January 2012

January 2013

Amount

Change from
Actual

Baseline Forecast

Percent

Amount

Percent

January 2012

January 2013

Amount

Baseline 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

$358,061,324

$10,642,360

$2,219,164,488

$88,059,408

91,603,569

3,632,648

4.1

3,657,082

4.2

558,951,237

29,987,918

5.7

3,657,082

0.7

441,613,843

17,918,893

4.2

14,545,250

3.4

2,298,743,319

149,118,164

6.9

14,545,250

0.6

20,826,718

(12,300,576)

(37.1)

(10,813,454)

(34.2)

316,136,467

(39,066,576)

(11.0)

(10,813,454)

(3.3)

587,813

(319,620)

(35.2)

(512,187)

(46.6)

8,198,095

(1,809,636)

(18.1)

(512,187)

(5.9)

2,088,424

(190,170)

(8.3)

0

0.0

15,425,468

(673,787)

(4.2)

0

3,302,938

(917,829)

(21.7)

0

0.0

18,898,778

949,326

5.3

0

(27.7)

148,838,853

(10,903,444)

(6.8)

--

0

(200,825)

(100.0)

(23.6)

316,874

(8,365)

(2.6)

17,353,339

17,313,102

0

0

76,427

13,716

$935,514,395

$35,792,524

3.1 %

--21.9
4.0 %

($6,847,367)

(6,646,661)
0
(23,573)
($6,640,910)

(1.9) %

(0.7) %

$5,584,673,579

$215,452,183

4.1 %

4.0 %

($6,847,367)

(0.3) %

0.0
0.0

(6,646,661)

(4.3)

0

--

(23,573)

(6.9)

($6,640,910)

(0.1) %

Other Revenue
Lottery

4,570,140

(958,600)

(17.3)

(429,860)

(8.6)

21,618,340

(8,337,400)

(27.8)

(429,860)

(1.9)

License, Fees and Permits

2,580,045

354,069

15.9

680,045

35.8

17,936,108

1,358,817

8.2

680,045

3.9

Interest

4,891,870

4,885,207

--

4,904,515

2,803,237

133.4

4,881,870

Sales and Services

1,376,915

(182,488)

(11.7)

(123,085)

(8.2)

9,548,407

153,906

1.6

(123,085)

(1.3)

Other Miscellaneous

3,154,422

(2,927,194)

(48.1)

654,422

26.2

17,215,580

(22.3)

654,422

4.0

--

0

--

0

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

0
362,707

0
(241,153)

--

(39.9)

4,881,870

(137,293)

--

0

(27.5)

7,519,918

$16,936,099

$929,841

5.8 %

$5,526,099

48.4 %

$78,742,868

$952,450,494

$36,722,365

4.0 %

($1,114,811)

(0.1) %

$5,663,416,446

(4,949,984)
0
(4,593,234)
($13,564,658)
$201,887,524

(37.9)
(14.7) %
3.7 %

--

--

(137,293)

(1.8)

$5,526,099

7.5 %

($1,114,811)

(0.0) %

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

(42,798,670)

(7,430,050)

21.0

0

0.0

(299,590,690)

(52,010,350)

21.0

0

5,434,415

(7,641,317)

(58.4)

0

0.0

47,231,329

(147,706,480)

(75.8)

0

0.0

(37,364,255)

(15,071,367)

0

0.0 %

(252,359,361)

(212,584,258)

534.5 %

0

0.0 %

($10,696,733)

(0.2) %

($1,114,811)

(0.0) %

0.2 %

($2,803,202)

(0.4) %

67.6 %

$915,086,239

$21,650,998

2.4 %

$100,290,232

$1,081,630

1.1 %

($1,114,811)

(0.1) %

$5,411,057,086

0.5 %

$692,085,503

0.0

Non-General Funds
Highway User Revenue Fund

$486,378

$1,341,263

* Total January collections including the temporary 1¢ increase approved by the voters in May 2010 were $449.7 million. This amount is $14.3 million, or 3.3%, above January 2012 and $(3.2) million, or (0.7)%, below
forecast.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Recent Economic Indicators
NATIONAL

“The Conference
Board’s U.S.
Consumer
Confidence
Index fell (12.1)%
in January, the
third consecutive
monthly
decrease.”

According to the U.S. Department of Commerce
Bureau of Economic Analysis, the U.S. Real Gross
Domestic Product (GDP) decreased at an annual
rate of (0.1)% in the fourth quarter of 2012. This
decrease, the first since the second quarter of
2009, was largely due to lower inventory
investment and federal defense spending.
Consumer spending and business fixed
investment increased, compared to the third
quarter. The latest GDP estimate is preliminary
and will be revised using more complete data.
The Conference Board’s U.S. Consumer
Confidence Index fell (12.1)% in January, the third
consecutive monthly decrease. The index also
dropped (4.7)% from the reading in January 2012,
which was the first year over year decrease in 11
months. Consumers’ worsening view of the labor
market was the largest drag on confidence.
The Conference Board’s U.S. Leading Economic
Index increased by 0.5% in December and 0.2%
above the measure in December 2011. This
modest improvement resulted from a reduction
in jobless claims and increases to several
financial market sub-indices. These gains were
partially offset by reduced consumer
expectations and new manufacturing orders.
The Semiconductor Industry Association (SIA)
reported that Semiconductor Billings (3-month
moving average) in the Americas increased
13.4% in 2012, to $4.94 billion. This represents the
greatest year over year percentage increase
since March of 2011. Consistent with seasonality
of semiconductor sales, December’s sales
decreased slightly ((1.5)%) from the prior month.
Semiconductors are Arizona’s largest
international export industry.
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 inflationadjusted wages.
In December, 32 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 2.6%

above last year, which is the 19th highest
growth rate in the country. While this is a
significant improvement, Arizona’s index is still
(10.9)% below its peak, which occurred in
August 2007. See Appendix A – 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 manufacturing
delivery times, 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 2.5% over the next 6 months.
This is lower than the revised 2.8% growth
projection in November and lower than the
2.7% projection in December 2011.
Housing
The number of Maricopa County pending
foreclosures increased from 10,466 in
December to 11,124 in January. The January
total, however, is significantly below the peak
in December 2009 (51,466). See Appendix A –
Tracking Arizona’s Recovery.
The total housing inventory in the Greater
Phoenix area decreased from 25,025 in
January 2012 to 22,090 in January 2013, a
(11.7)% decrease. This continues the decline
in inventory that started in January 2011.
As the supply of housing has declined, the
price has increased. In the Metropolitan
Phoenix area, the median price of a single
family home was $164,000 in December. This
represents a 0.9% increase from November,
and a 31.2% increase from December of last
year.
Another measure of the health of the Arizona
real estate market is permitting activity. For
the 3-month period through December, a
total of 1,155 single-family building permits
had been issued statewide, a 48.0% increase
from last year. This level of activity is
comparable to the amount of permits seen in

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Recent Economic Indicators
September 2008, a month which marked the
beginning of the rapid decline in the state’s
housing market. The current level of permitting,
however, remains far below a more normal 3month average of 3,000 to 4,000 permits. See
Appendix A – Tracking Arizona’s Recovery.
Employment

AHCCCS

Due to the annual revision of employment date
(also known as “benchmarking”), January’s
employment and unemployment figures will not
be released until the second week of March.
For this reason, this month’s issue of Monthly
Fiscal Highlights does not include any
employment statistics.

caseloads are

State Agency Data

currently (4.0)%

At the beginning of February, total AHCCCS
caseloads equaled 1.26 million members, a
(0.3)% decrease from the prior month. Overall,
AHCCCS caseloads are currently (4.0)% below
February 2012 levels. The traditional acute care
AHCCCS population, which consists primarily of
lower income children and their parents,
decreased (0.2)% from last month and (1.6)%
from a year ago. The total population in this
program is almost 900,000.

“Overall,

below February
2012 levels.”

The childless adult program has not allowed
new participants since July 2011. This
population has declined (140,330) since then to
84,162. As a whole, the Proposition 204
program has declined (1.3)% compared to the
prior month, and (21.8)% from the prior year.
KidsCare I provides coverage for 7,885 children
with incomes above those in the traditional
population. Its enrollment has declined since a
freeze was implemented in January 2010.
Enrollment declined (1.4)% compared to the
prior month and (22.9)% from the prior year.
Beginning on May 1, 2012, AHCCCS began a
new program, entitled KidsCare II, which
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 February,
27,256 children were enrolled in KidsCare II.
There were 41,172 TANF recipients in the state in
December, a monthly caseload increase of
0.6%. Year-over-year, the number of TANF
recipients has increased by 3.9%. This marks the

(Continued)

fourth month of year-over-year growth in the
TANF program since November 2009.
The appropriation for TANF cash assistance in
the FY 2013 budget funds a caseload of
approximately 36,200 recipients in FY 2013.
The Supplemental Nutrition Assistance Program
(SNAP), formerly known as Food Stamps,
provides assistance to low-income households
to purchase food. In December, there were a
total 1.1 million SNAP recipients in the state, a
(0.4)% decrease over the prior month.
Compared to the same month last year, SNAP
participation was down by (1.1)%. The number
of SNAP 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 Corrections (ADC) inmate population
decreased to 40,075 inmates in January 2013.
Relative to the prior 3-month period, the
population has decreased by (10) inmates.
Compared to a year ago, the population has
increased by 110 inmates.

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Recent Economic Indicators

(Continued)

Table 4

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
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

December
December
December
December
December
December
December
Oct-Dec
Oct-Dec

7.9%
19,147
38,101
2.51 million
153,100
119,400
40.7
$36.1 million
$149.8 million

0.1 %
(4.3)%
(3.8)%
0.1%
0.5%
(0.3)%
0.7%
(1.0)%
3.6%

(1.1)%
(14.2)%
(30.9)%
2.6%
2.4%
6.5%
(2.6)%
3.6%*
6.2%*

Oct-Dec
Oct-Dec

1,155
713

(8.6)%
99.3%

48.0%
171.7%

December
December

7,959
1,187

(0.6)%
0.5%

0.2%
(0.3)%

December
December
November

$164,000
$99,900
124.16

0.9%
(0.1)%
1.4%

31.2%
27.6%
22.8%

January
January
November
December
November

11,124
22,090
3.31 million
$40.01
$5.47

6.3%
4.7%
(1.1)%
(21.9)%
22.4%

(39.2)%
(11.7)%
0.2%
1.6%
(0.2)%

2nd Quarter 2012
December
Oct-Dec
3rd Quarter 2012
July 1, 2012
February

68.6
181.23
2.5%
$236.8 billion
6.55 million
1,264,655
881,682

(1.3)%
0.1%
(0.3)%
0.6%
N/A
(0.3)%
(0.2)%

32.2%
2.6%
(0.2)%
4.2%
1.3%
(4.0)%
(1.6)%

(2.9)%
(0.4)%
(4.8)%
5.5%
(0.2)%
(0.1)%
0.6%
(0.4)%
(10) inmates

(42.2)%
(4.8)%
(35.1)%

December
December
Nov-Jan

84,162
147,472
7,885
27,256
53,244
62,954
41,172
1,124,669
40,075

2.8%
11%
3.9%
(1.1)%
110 inmates

December
December

17,983
25,287

72
(14)

(647)
(356)

4th Quarter 2012
(1st Estimate)
January
December
Oct-Dec
December

$13.6 trillion

0.1%

1.5%

58.6
93.9
$4.94 billion
231.0

(12.1)%
0.5%
(1.5)%
0.0%

(4.7)%
0.2%
13.4%
1.7%

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Summary of Recent Agency Reports
Arizona Criminal Justice Commission – Report on State
Aid to County Attorneys Fund and the State Aid to
Indigent Defense Fund – Pursuant to A.R.S. § 41-2409E,
the Arizona Criminal Justice Commission (ACJC) is
required to report on the expenditures of monies for the
prior fiscal year in the State Aid to County Attorneys
Fund and State Aid to Indigent Defense Fund by
January 8 of each year.
In FY 2012, the State Aid to County Attorneys Fund
received revenues totaling $973,600. The State Aid to
Indigent Defense Fund did not receive revenues in FY
2012 as Laws 2011, Chapter 308 redirected the fine
revenue normally received by the fund to the Gang and
Immigration Intelligence Team Enforcement Mission
Fund Border Security and Law Enforcement
Subaccount.
ACJC reports that county attorneys reported
expenditures of $2.8 million in FY 2012. Of that total, $1.9
million was spent on salaries, $499,000 on case
management software, $308,000 on equipment, $71,600
for contractual services, $21,900 on other expenditures
and $2,300 on coordination efforts.
ACJC reports that counties used the monies in 3 main
areas: additional staffing, technological purchases, and
training and travel expenses. Additional staffing helps
with providing services such as case processing, case
management and archiving. Technological purchases
enhance productivity and case tracking. Training and
travel expenses funded witness travel and staff
attendance at educational seminars and conferences.
ACJC also states that only 1 prosecuting agency,
Graham County, reported case processing times that
met the Supreme Court guidelines. (Krista MacGahan)
Department of Education - Report on the Arizona
Education Learning and Accountability System (AELAS)
– Laws 2012, Chapter 294, Section 29 requires the
Arizona Department of Education (ADE) to report
quarterly on its progress in implementing its new “AELAS”
data system, including “an assessment of progress from
an independent third party not affiliated with state
government.” The new system is intended to replace
the current “SAIS” system for counting and funding
students, replace other currently-separate ADE data
systems, and provide statewide access to data on
student achievement and teacher effectiveness for
individual courses.
The current ADE report states that major
accomplishments for the quarter include the following
items:

•
•
•
•
•
•

Completed an analysis of projected costs and
benefits for the program (“business case”)
Began pilot testing of Statewide Longitudinal Data
System (SLDS) in sample district
Created plan to replace the Student Accountability
and Information System (SAIS)
Continued to develop teacher/principal evaluation
tool to meet federal requirements
Continued to streamline/consolidate data
gathering processes
Worked on strategic plan narrative and timeline for
AELAS implementation

Feedback from a private sector professional who serves
on the Arizona Reach Council’s IT task force is included
in the report. It indicates that “Every quarter we are
seeing good progress and pleased to see key actions
taken to deliver value.”
In addition to the items mentioned above, a Request for
Proposals (RFP) for independent third-party review of the
AELAS project has been issued recently through the
State Procurement Office. A contract is not expected
to be awarded from the RFP until at least early March.
(Steve Schimpp)
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:
During the 2011-2012 academic year, 10,141
community college students transferred to the
public university system. This is an increase of 22.4%
from the 2006-2007 academic year.
•
54.7% of new transfer students had 60 or more credit
hours transferred to a university. This is an increase of
10% over 2006-2007.
•
Over 6,750 community college transfer students
earned baccalaureate degrees from an Arizona
university.
(Tom Ritland)
•

Arizona Board of Regents – Report on Credit Hour
Threshold FTE Student Counts – Pursuant to A.R.S. § 151626, the Arizona Board of Regents (ABOR) is required to
report by October 15 on the number of students that
met or exceeded the undergraduate credit hour
threshold. ABOR reports that 271 full-time equivalent
(FTE) students were over the 145 credit hour threshold in

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Summary of Recent Agency Reports (Continued)
the fall 2012 semester. This represents an increase of 31
FTE students over the fall 2011 semester. (Marge Zylla)
Secretary of State - Report on the Election Systems
Improvement Fund – Pursuant to a General
Appropriation Act footnote and A.R.S. § 41-129C, the
Secretary of State submitted a report on the
expenditures from the Election Systems Improvement
Fund to implement the Help America Vote Act. The
expenditures in FY 2012 were $1.7 million and are
projected to be $2.5 million in FY 2013 and FY 2014. The
Secretary of State reports that FY 2012 expenditures
were used as follows: 67% for voter registration, 11% for
administration, 9% on voter education, 7% for poll
workers, and 6% on voter accessibility. A similar
distribution is expected to continue for FY 2013 and FY
2014. (Krista MacGahan)
Supreme Court – Report on Criminal Case Proceedings,
Enforcement of Court Orders, and State Aid to Courts
Fund Expenditures – Pursuant to A.R.S. § 12-102.01D, the
Supreme Court is required to report annually to the JLBC
on the progress of criminal case processing projects and
the enforcement of court orders including the collection
of court ordered fees, fines, penalties, sanctions and
forfeitures. Additionally, pursuant to A.R.S. § 12-102.02D,
the Supreme Court is required to report annually to the
JLBC on the expenditure of monies from the State Aid to
the Courts Fund for the prior fiscal year and the progress
made in improving criminal case processing.
During FY 2012, the Supreme Court contracted with
several outside vendors to increase compliance with
court orders, resulting in total collections of $45.5 million
from backlogged cases. Additionally, the Supreme
Court utilizes a debt setoff program to match
outstanding criminal fines or fees to outstanding tax and
governmental liabilities. The debt setoff program
increased tax and lottery interceptions by 1.2% yearover-year and collected $18.6 million in CY 2012.
Expenditures from the State Aid to the Courts Fund were
$2.7 million in FY 2012. These monies were disbursed to
Superior and Justice Courts for the processing of criminal
cases.
The Supreme Court reported that criminal case
processing was enhanced across counties through the
utilization of State Aid to the Courts Fund monies for
additional judges, supplemental funding to driving
under the influence (DUI) and drug courts,
administrative positions, and the enhancement of
electronic data sharing. (Eric Billings)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

January Spending
January 2013 General Fund spending of $712.6 million
was $62.9 million higher than January 2012. Year-todate, spending is $6.2 billion, or $176.5 million above last
year.

•

FY 2013 Spending

•

January 2013 spending of $712.6 million was $62.9 million
higher than December 2011 (See Tables 5 & 6).

The Department of Education spent $33.2 million
more than in January 2012. The higher
expenditure amount reflects higher General
Fund funding for the agency, as well as
increased charter school enrollment.
Department of Economic Security spending in
January was $85.0 million, or $35.6 million more
than the prior year.

Table 5
General Fund Spending ($ in Millions)

Agency
AHCCCS
Corrections
Economic Security
Education
Health Services
Public Safety
School Facilities
Board
Universities
Leaseback Debt
Service
Other
Total
Budget Stabilization
Fund Deposit
Grand Total

Jan 13

Change from
Jan 12

113.3
74.2
85.0
293.8
14.3
2.4
29.6

(7.6)
0.0
35.6
33.2
3.1
0.0
(0.9)

797.2
530.2
524.7
2,496.8
510.6
18.7
172.3

(151.0)
(13.0)
41.1
16.4
67.6
(18.3)
8.8

46.3
0.0

(1.3)
0.0

501.3
84.1

(11.7)
35.1

53.7
712.6

0.8
62.9

317.4
5,953.3

1.5
(23.5)

0.0

0.0

200.0

200.0

712.6

62.9

6,153.3

176.5

Year to Date

YTD Change
from FY 12

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Table 6

General Fund Spending
($ in Thousands)
Agency
Department of Administration
ADOA Sale/Leaseback Debt Service
Office of Administrative Hearings
Department of Agriculture
AHCCCS
Arts, AZ Commission on the
Attorney General
AZ Capital Post Conviction Public
Defender
State Board of Charter Schools
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
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/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

January 13

Change from
January 12

Year-to-Date

YTD Change
from FY 12

1,045.4
101.4
678.2
113,341.1
1,840.2
-

365.0
38.6
18.7
(7,557.6)
714.6
(55.5)

15,623.2
84,119.8
531.9
4,538.1
797,232.1
12,865.1
4.1

4,924.5
35,069.1
38.3
(301.0)
(151,023.7)
(10.4)
2,663.4
(351.2)

62.2
2,625.0
16,048.2
47.0
74,202.3
1,249.1
85,018.3
293,761.9
1,026.6
0.5
20.2
89.8
200.9
186.6
1,635.3
123.0
685.4
14,338.0
246.7
44.9
324.7
3.0
400.4

13.0
(1,499.8)
6.9
(0.8)
(373.7)
35,612.1
33,248.0
313.3
(10.7)
(1.7)
37.5
21.6
(34.6)
1,389.6
42.1
(8.3)
3,120.6
46.5
(52.0)
(282.3)
2.9
(2.6)

457.4
18,375.0
48,144.5
332.6
530,230.6
13,399.9
524,678.8
2,496,821.7
5,060.5
7,000.0
55.5
359.3
465.7
1,603.3
1,083.0
3,778.5
588.1
4,726.1
510,559.9
1,984.2
391.8
1,060.1
30.4
2,902.9

14.4
(4,041.6)
14.8
(13,016.9)
654.7
41,053.3
16,383.0
956.0
(49.1)
(29.8)
(24.5)
(28.6)
(44.1)
552.9
47.9
3.1
1,044.4
67,602.5
(50.9)
(37.2)
(1,500.8)
2.5
(263.9)

9,877.5
1,051.0
3,061.2

(1,185.7)
(28.1)
(1,105.0)

55,011.5
7,890.3
24,304.2

183.4
(304.3)
(4,289.8)

12

JLBC – MONTHLY FISCAL HIGHLIGHTS – FEBRUARY 2013

Agency
State Land Department
Law Enforcement Merit System
Legislature
Auditor General
House of Representatives
Joint Legislative Budget Comm.
Legislative Council
Senate
Mine Inspector
Nav. Streams & Adjudication
Pioneers’ Home
Comm. for Postsecondary Ed.
Department of Public Safety
Arizona Department of Racing
Radiation Regulatory Agency
Real Estate Department
Department of Revenue
School Facilities Board
Secretary of State
Tax Appeals Board
Office
of Tourism
O
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
Grand Total

January 13

Change from
January 12

Year-to-Date

YTD Change
from FY 12

83.7
5.4

(34.5)
0.7

631.9
38.5

(68.7)
5.5

1,300.3
951.1
145.7
588.5
647.9
69.3
8.4
28.5
88.0
2,391.4
83.6
241.3
156.2
3,209.6
29,639.9
1,299.2
17.4
377.6
-

(33.5)
(39.9)
6.9
318.6
(105.7)
(10.4)
1.6
(370.4)
(610.4)
40.6
53.0
2.3
8.1
1,575.2
(926.6)
568.1
(11.0)
377.6
(7.1)

9,903.5
6,331.5
1,056.6
4,692.4
4,370.5
681.5
71.2
617.8
786.4
18,693.5
1,874.1
970.3
1,373.5
24,692.3
172,333.8
12,119.4
158.4
3,039.7
18.9

(472.0)
(747.6)
(98.4)
1,425.9
(489.4)
12.3
(25.7)
(889.5)
(610.4)
(18,282.0)
(826.9)
(18.7)
(91.6)
(5,676.6)
8,812.8
6,354.5
(5.9)
3,039.7
(5.4)

7,147.8
17,381.2
5,924.2
15,870.8
627.6
759.3
113.1
113.4
712,606.1
712,606.1

1,956.6
(1,788.1)
(507.4)
(1,001.8)
(471.0)
1,047.1
29.1
26.0
62,886.2
62,886.2

27,116.0
212,243.9
71,964.2
190,025.0
3,265.4
5,261.6
803.5
1,989.7
5,953,335.0
200,000.0
6,153,335.0

11,409.3
(12,517.1)
(3,552.0)
(7,012.8)
(1,728.7)
2,449.7
176.1
156.2
(23,457.1)
200,000.0
176,542.9

Tracking Arizona’
Arizona’s Recovery

Total NonNon-Farm Employment
2,800

February 2013
Appendix A

2,700

Thousands of Jobs

Slide:
2……Total Non-Farm Employment
3……Initial Claims for Unemployment Insurance
4……State Sales Tax Collections – Retail Category
5……State Sales Tax Collections – Contracting
Category
6……Single Family Building Permits
7……Maricopa County Pending Foreclosures
8……Coincident Index

2,600

2,500

2,400

2,300

2,200

2001

1

JLBC

Initial Claims for Unemployment Insurance

2004

2005

2006

2007

2008

2009

2010

2011

JULY

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JAN

JUL

JUL

2003

2012

2

Not seasonally adjusted

State Sales Tax Collections – Retail Category
$225

40,000
$200
35,000

$ in Millions

30,000
25,000
20,000
15,000

$175

$150

$125

Not seasonally adjusted

Oct-12

Jul-12

Apr 12

Jan 12

Oct 11

July 11

Jan 11

Apr 11

Oct 10

July 10

Jan 10

Apr 10

Oct 09

July 09

Jan 09

Apr 09

Oct 08

July 08

Jan 08

Apr 08

Oct 07

Apr 07

July 07

JULY

JUL

2011

JAN

JUL

2010

JAN

JUL

2009

JAN

JUL

2008

JAN

JUL

2007

JAN

JUL

2006

JAN

JUL

2005

JAN

JUL

2004

JAN

JUL

2003

JAN

JUL

2002

JAN

JUL

JAN

JAN

2001

Jan 07

$100

5,000

Oct 06

10,000
July 06

Total Monthly Claims for UI Benefits

2002

JLBC

45,000

JLBC

JAN

JUL

JAN

JAN

2,100

2012

3

JLBC

Excludes temporary 1 ¢ sales tax

4

State Sales Tax Collections – Contracting Category

Single Family Building Permits
100,000

$100

Single Family Building Permits

90,000

$ in Millions

$75

$50

$25

80,000
70,000
60,000
50,000
40,000
30,000
20,000

JLBC

5

2003

2004

JLBC

2006

2007

2008

2009

2010

2011

JULY

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

2005

JAN

JUL

JAN

JUL

JAN

JUL

2002

2012

6

12-Month Moving Sum

Maricopa County Pending Foreclosures

Economic Activity Index
210

60,000

200

Coincident Index Value

50,000

40,000

30,000

20,000

10,000

190
180
170
160
150

2003

2004

2005

2006

2009

2010

2011

An initial notice of trustee sale has been recorded but final sale has not yet occurred

2012

7

JLBC

2002

2003

2004

2005

2006

2007

2009

2010

2011

JULY

JUL

JAN

JUL

JAN

JAN

JUL

JUL

2008

JAN

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

2001

JAN

JAN

JAN

JULY

JAN

JUL

JAN

JUL

JAN

JUL

JUL

2008

JAN

JUL

2007

JAN

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

2002

JAN

140
JAN

0

JLBC

JAN

JUL

2001
Excludes temporary 1 ¢ sales tax

JAN

0
JAN

Jul-12

Oct-12

Jan 12

Apr 12

Oct 11

July 11

Jan 11

Apr 11

Oct 10

July 10

Jan 10

Apr 10

Oct 09

July 09

Jan 09

Apr 09

Oct 08

July 08

Jan 08

Apr 08

Oct 07

July 07

Jan 07

Apr 07

Oct 06

July 06

10,000

$0

2012

Source: Coincident Index – Federal Reserve Bank of Philadelphia. Combines four state-level
indicators (employment, average hours worked in manufacturing, the unemployment rate, and wage
and salary disbursements) to summarize current economic conditions.

8