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

Summary
April General Fund revenue collections totaled
$1.09 billion. Base revenues, which exclude
one-time adjustments, were 17.3% above the
prior year.
Collections were approximately $154 million
greater than April of last year, and $140 million
over the forecast for the month.
Year-to-date, base revenues are 5.6% higher
than last year. In total, year-to-date General
Fund collections are $167.8 million above the
Baseline forecast.

www.azleg.gov/jlbc.htm

“Year-to-date,
base revenues
are 5.6% higher
than last year. In
total, year-todate General
Fund collections
are $167.8
million above
the Baseline
forecast.”

May 2013

April Spending
In comparison to revenue of $1.09 billion, April
2013 General Fund spending was $544.8 million,
or $67.9 million above last year.
Fiscal year-to-date, General Fund revenues of
$7.40 billion have been offset by $7.42 billion in
General Fund spending.
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. As of mid-May 2013, the
operating balance is $2.8 billion.

anticipated. As noted in the December
Monthly Fiscal Highlights, federal tax law
changes created incentives for taxpayers to
shift income from calendar 2013 into calendar
2012. The Baseline forecast, however, did not
account for this FY 2013 growth as it may only
reflect a timing shift between fiscal years and
not an actual growth in long term income.
The threat of Bush-era tax cuts expiring on
December 31, 2012 appears to have shifted
some of Arizona individual income tax
collections forward into tax year (TY) 2012 that
would have otherwise occurred in future years.
Though the United States Congress eventually
passed legislation to avert many tax increases
of the “fiscal cliff,” investors appear to have
proactively taken steps to avoid even the
potential of higher tax rates in TY 2013. As a
result, investors’ TY 2012 personal income
increased substantially, which has resulted in
higher FY 2013 income tax collections in April.
This short term gain, however, could be offset by
a lower than expected income tax liability in FY
2014.

Of the $140 million positive forecast variance in
April, $119 million was due to individual income
tax collections. Estimated and final April
income tax payments were 28% higher than a
year ago.

Even without the fiscal cliff, the federal
Affordable Care Act (ACA) of 2010 created
incentives for investment income to be
accelerated into TY 2012. To help finance
federal health care changes, the ACA
legislation established a 3.8% surtax on the lesser
of net investment income (capital gains,
interest, dividends, rents, etc.) or annual
earnings over a certain threshold amount
($250,000 for married couples) as of January
2013.

An April income tax revenue windfall had been

Given these time-shifting incentives, the April

April Income Tax “Windfall”

”

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

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

• DES – Report on Cash Assistance .................... 8

April Revenues ........................................................2

• DES – Report on the Workforce Investment

Economic Indicators ..............................................5
Summary of Recent Agency Reports
• Healthy Forest Incentives Program ..................8

Act Grant ............................................................. 8
• DHS – Report on Arnold v. Sarn ........................ 8

April Spending ........................................................ 9
Tracking Arizona’s Recovery.............Appendix A

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

Summary (Continued)
revenue acceleration is part of a nationwide
trend. The Rockefeller Institute at the State
University of New York at Albany regularly
reports on federal and state revenue trends.
On May 8, 2013, the Institute reported that
federal income tax payments grew by 37% in
April, compared to the prior year. The Institute
has also received reports of substantial income
tax gains at the state level in California,
Connecticut, Illinois, Nebraska and
Pennsylvania. They expect similar reports from
other states as more information becomes
available.
The Institute also attempted to place the April
revenue gains into a broader context:

“Year-to-date,
sales tax
collections are

“One of the complications that
revenue analysts face when April taxreturn revenue surges is that it could
mean the economy in the previous year
actually was stronger than previously
believed. In that case, the longer term
revenue outlook could be better than

4.5% above the
prior year and
are $12.0
million above

previously thought. Revenue analysts
won’t know whether this is a contributing
factor until more economic data are
available.
“However, much of the available
economic data suggests the underlying
economy remains very weak, and there
are well-known reasons to believe that
federal tax incentives caused much of
the increase. In that case, the
temporary surge in revenue may mask
underlying weakness in the economy.”
The Institute also provided this perspective:
“…many revenue forecasters
anticipated a surge and have been
properly cautious in estimating that
revenue has been borrowed from the
future. Still, the temptation will be to
treat it as recurring revenue available to
support ongoing spending, or available
for tax cuts. Caution is in order.”
(Rockefeller Institute Brief – May 8, 2013)

April Revenues
Table 1

forecast.”
April
Year-to-Date

General Fund Revenues ($ in Millions)
FY 2013
Collections
$ 1,088.5
$ 7,400.8

Sales Tax collections of $429.4 million were 5.4%
above April 2012 and $6.4 million above the
Baseline forecast for the month.
Year-to-date, sales tax collections are 4.5%
above the prior year and are $12.0 million above
forecast.
Table 2 displays the April growth rates for the
largest categories.
Retail and contracting together account for
about 60% of all sales tax revenues. April retail,
which reflects March sales, increased by 8.1%
bringing year-to-date retail growth up to 6.3%.
Contracting collections have been much more
volatile than retail. The April increase of 14.0%
brings the year-to-date increase to 4.1%.

Difference From
Baseline Forecast
$ 140.4
$ 167.8

Table 2

Difference
From FY 2012
$ 154.0
$ 110.4

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Utilities
Use
Restaurant & Bar

April
8.1%
14.0%
5.2%
(10.2)%
4.4%

YTD
6.3%
4.1%
2.1%
(3.3)%
5.5%

Individual Income Tax net revenues were $519.8
million in April, which was $143.0 million more
than the prior year. Collections were $119.0
million above the forecast for the month. Yearto-date, revenues have grown 12.3% and are
$157.3 million above forecast. For a more
detailed discussion of the growth in individual

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

April Revenues (Continued)
income tax collections, please refer to the
Summary section at the beginning of this
document.
As indicated in Table 3, withholding was up 6.6%
in April. The April increase brings withholding tax
collections for the fiscal year to 4.0% over the
prior year. This amount is $2.2 million above the
Baseline forecast.

“Withholding
was up 6.6% in
April. The April
increase brings
withholding tax

April estimated and final payments of $558.7
million were 28.3% above last year, and were
$86.1 million above forecast. Year-to-date,
payments are $78.4 million above the forecast.
April refunds of $(340.4) million were
approximately equal to last year’s amount.
Year-to-date, refunds are $76.7 million below
forecast.
Table 3

Individual Income Tax Growth Rates
Compared to Prior Year

collections for
the fiscal year
to 4.0% over
the prior year.”

Withholding
Estimated +
Final Payments
Refunds

April
6.6%

YTD
4.0%

28.3%
(0.3)%

15.3%
(5.4)%

Corporate Income Tax net collections were
$102.2 million in April, which is $12.1 million
greater than the prior year’s net collections of
$90.1 million. Collections for the month were $3.3
million above the forecast. Year- to-date,
collections are down (3.2)% compared to the
prior year, and are approximately equal to the
forecast.
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 $109.2 million in
April were up $1.4 million, or 1.3%, compared to
April of last year. Year-to-date revenues are
(0.4)% below collections in the prior year, and
$(10.3) million below forecast.

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

Table 4

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

FY 2013 YTD (Ten Months)

Change From
April 2012

Actual
April 2013

Percent

Amount

Change from
Baseline Forecast
Percent

Amount

April 2012

Actual
April 2013

Amount

Baseline Forecast
Percent

Percent

Amount

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

$341,689,456

$16,877,134

$3,167,614,520

$126,745,647

87,704,514

5,286,182

6.4

5,094,212

6.2

801,056,267

42,367,644

5.6

15,883,788

2.0

519,783,007

142,976,117

37.9

118,961,799

29.7

2,837,795,293

311,715,377

12.3

157,285,290

5.9

102,221,603

12,072,149

13.4

3,265,973

3.3

568,062

(361,027)

5.2 %

(38.9)

$1,347,436

(531,938)

0.4 %

4.2 %

506,698,013

(16,889,862)

(3.2)

(214,335)

(0.0)

9,650,436

(2,554,472)

(20.9)

(1,884,846)

(16.3)

(1,371,353)

(6.4)

16,570

0.8

0

0.0

20,026,891

(2,153,323)

(9.7)

3,345,622

753,838

29.1

0

0.0

27,319,251

2,744,585

11.2

54,650,143

12,646,318

30.1

14,650,143

36.6

275,236,100

(15,730,869)

(5.4)

0

0
2,130

$1,112,162,857

$190,269,411

-3.0
20.6 %

0
(26,832)
$142,760,793

(0.1) %

(48.4)

2,127,282

73,168

($3,904,432)

--

0

(200,825)

(100.0)

(26.8)

1,483,059

(137,410)

(8.5)

14.7 %

$7,646,879,830

$445,906,492

6.2 %

(449,558)

(1.6)

(3,249,414)

(1.2)

0
(116,941)
$161,978,199

-(7.3)
2.2 %

Other Revenue
Lottery

7,555,140

(2,084,200)

(21.6)

(1,444,860)

(16.1)

39,184,100

(21.5)

(864,100)

(2.2)

License, Fees and Permits

1,924,531

(325,026)

(14.4)

(175,469)

(8.4)

23,737,580

583,640

2.5

581,517

2.5

Interest

2,487,913

30,499

1.2

2,477,913

--

7,397,141

2,832,021

62.0

7,344,496

Sales and Services

2,274,477

474,787

26.4

274,477

13.7

23,616,985

1,307,382

5.9

845,493

(58.0)

22,533,343

(5,708,332)

(20.2)

--

0

(17,869,682)

(100.0)

--

8,560,026

(4,347,149)

(33.7)

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

840,495

(2,438,024)

(74.4)

0

(17,869,682)

(100.0)

(2,013,502)

--

(1,802,243)
$13,280,313
$1,125,443,170

($24,225,148)
$166,044,263

(64.6) %
17.3 %

(1,159,505)
0
(2,302,243)
($2,329,687)
$140,431,106

(14.9) %

$125,029,175

14.3 %

$7,771,909,005

(10,738,160)

($33,940,280)
$411,966,212

(1,527,815)
0
(597,185)

-3.7
(6.3)
-(6.5)

(21.4) %

$5,782,406

4.8 %

5.6 %

$167,760,605

2.2 %

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

(42,798,670)

(7,430,050)

21.0

0

0.0

(427,986,700)

(74,300,500)

21.0

0

0.0

5,898,735

(4,598,797)

(43.8)

0

0.0

56,859,332

(214,400,575)

(79.0)

0

0.0

--

0

--

0

(12,867,428)

(100.0)

0

--

48.4 %

0

0.0 %

433.5 %

0

0.0 %

1.5 %

$167,760,605

2.3 %

0
(36,899,935)

0
(12,028,847)

(371,127,368)

$1,088,543,235

$154,015,416

16.5 %

$140,431,106

14.8 %

$7,400,781,637

$109,220,212

$1,389,523

1.3 %

$742,539

0.7 %

$1,005,536,959

(301,568,503)
$110,397,709

Non-General Funds
Highway User Revenue Fund

($4,225,232)

(0.4) %

($10,283,805)

* Total April collections including the temporary 1¢ increase approved by the voters in May 2010 were $429.4 million. This amount is $22.2 million, or 5.4%, above April 2012 and $6.4 million, or 1.5%, above forecast.

(1.0) %

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

Recent Economic Indicators
NATIONAL
According to the U.S. Department of
Commerce Bureau of Economic Analysis, the
U.S. Real Gross Domestic Product (GDP)
increased at an annual rate of 2.5% in the first
quarter of 2013. This acceleration from fourth
quarter growth of only 0.4% was largely due to
upturns in inventory investment and exports and
acceleration in consumption expenditures.
Decreased federal, state, and local spending
were the largest drags on growth.

“The Conference
Board’s U.S.
Consumer
Confidence
Index grew 6.2
points to 68.1 in
April, more than
recovering the
(6.1) point
decrease in
March.”

The Conference Board’s U.S. Consumer
Confidence Index grew 6.2 points to 68.1 in
April, more than recovering the (6.1) point
decrease in March. The April increase primarily
represents an improved 6-month outlook on the
economy. This improved outlook was
attributed to better housing data and stock
market performance and lower gas prices
during the month.
The Conference Board’s U.S. Leading Economic
Index decreased by (0.1)% in March, but still
increased 1.7% above the measure in March
2012. This modest monthly drop, the first since
August 2012, was primarily the result of
decreases in consumer expectations and
building permits. Half of the index’s 10 subindices decreased during the month while half
increased.
Consumer prices, as measured by the U.S.
Consumer Price Index (CPI), decreased (0.4)%
in April. This drop represents the largest monthly
decrease in prices since December of 2008. A
(8.1)% decline in gas prices more than offset a
0.1% increase in core inflation (all prices except
for food and energy).
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 March, 47 out of 50 states had increases in
their coincident indexes. Arizona’s coincident
index increased by 0.2% compared to the prior
month. Year-over-year, the Arizona index is 2.0%
above last year, which is the thirty-second
highest growth rate in the country. While this is a

significant improvement, Arizona’s index is still
(10.5)% 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 2.3% over the next 6 months.
This is unchanged from the 2.3% growth
projection in February and lower than the 2.9%
projection in March 2012.
Housing
The number of Maricopa County pending
foreclosures decreased from 10,189 in March
to 9,424 in April. The April total 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 20,676 in April
2012 to 20,083 in April 2013, a (2.9)%
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 $175,000 in March. This
represents a 2.9% increase from February, and
a 29.7% increase from March of last year.
Another measure of the health of the Arizona
real estate market is permitting activity. For
the 3-month period through March, a total of
1,408 single-family building permits had been
issued statewide, a 26.6% increase from last
year. While permitting activity has seen gains,
the current level of permitting remains far
below a more normal 3-month average of
3,000 to 4,000 permits. See Appendix A –
Tracking Arizona’s Recovery.
The multi-family housing sector has also seen
gains, with the 3-month period ending in

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

Recent Economic Indicators
March resulting in a total of 341 multi-family
building permits being issued in the state.
However, this figure remains well below the
peak of activity in April 2007.
Employment
The state gained a total of 5,200 nonfarm jobs
between March and April. The private sector
added a net of 4,200 jobs in April, while the
government sector gained 1,000 jobs. The
largest contributions to April’s month-overmonth net job gain came from the following
sectors: professional and business services
(+3,100), financial activities (+1,400), trade,
transportation and utilities (+1,300), and
government (+1,000).
Compared to April 2012, nonfarm employment
was up by 2.0%, or 48,300 jobs. Of the 11 major
industry sectors, 10 recorded employment gains
while only 1 sector, Other Services, lost jobs. The
largest year-over-year net job gains came from
the following industries: leisure and hospitality
(+9,800), construction (+7,300), professional and
business services (+7,100), and financial
activities (+6,900).
See Appendix A – Tracking Arizona’s Recovery.
State Agency Data
At the beginning of May, total AHCCCS
caseloads equaled 1.27 million members, a
0.2% increase from the prior month. Overall,
AHCCCS caseloads are currently (1.1)% below
May 2012 levels. The traditional acute care
AHCCCS population, which consists primarily of
lower income children and their parents,
increased by 0.2% since last month and
decreased (0.1)% from a year ago. The total
population in this program is almost 900,000.
The childless adult program has not allowed
new participants since July 2011. This
population has declined (147,889) since then to
76,603. As a whole, the Proposition 204
program has declined (0.8)% compared to the
prior month, and (18.4)% from the prior year.
KidsCare I provides coverage for 7,258 children
with incomes above those in the traditional
population. Its enrollment has declined since a
freeze was implemented in January 2010.
Enrollment declined (4.7)% compared to the
prior month and (31.6)% from the prior year.

(Continued)

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 May, 31,956
children were enrolled in KidsCare II.
There were 37,276 TANF recipients in the state in
March, a monthly caseload decrease of (0.9)%.
Year-over-year, the number of TANF recipients
has declined by (5.0)%. The statutory lifetime
limit on cash assistance is 24 months.
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 March, there were a total
1.1 million food stamp recipients in the state, a
1.2% increase over the prior month. Compared
to the same month last year, food stamp
participation was down by (0.3)%. 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
increased to 40,171 inmates in April 2013.
Relative to the prior 3-month period, the
population has increased by 86 inmates.
Compared to a year ago, the population has
increased by 186 inmates.

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

Recent Economic Indicators

(Continued)

Table 5

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
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

April
March
March
April
April
April
March
Feb-Apr
Feb-Apr

7.9%
18,518
36,956
2.52 million
154,800
119,600
40.7
$33.5 million
$161.0 million

0.0 %
3.7%
(2.1)%
0.2%
(0.3)%
(0.1)%
0.2%
1.6%
(5.3)%

(0.5)%
(9.8)%
(29.4)%
2.0%
0.3%
6.5%
(1.0)%
8.5%*
7.3%*

Jan-Mar
Jan-Mar

1408
341

19.9%
(54.7)%

26.6%
(28.1)%

March
March

8,858
1,425

20.5%
17.2%

(8.0)%
(13.1)%

March
March
February

$175,000
$116,000
128.10

2.9%
7.4%
1.1%

29.7%
43.2%
23.0%

April

9,424

(7.5)%

(47.8)%

April
February
March
February

20,083
3.06 million
$90.63
$4.59

(3.1)%
(5.5)%
17.5%
3.6%

(2.9)%
(2.7)%
1.6%
(14.2)%

2nd Quarter 2013
March
Jan-Mar
4th Quarter 2012
July 1, 2012
May

March
March
Feb-Apr

69.6
181.43
2.3%
$240.2 billion
6.55 million
1,272,501
887,418
76,603
148,499
7,258
31,956
53,470
67,297
37,276
1,114,638
40,171

N/A
0.2%
(0.0)%
2.1%
N/A
0.2%
0.2%
(3.1)%
0.4%
(4.7)%
5.8%
0.3%
2.0%
(0.9)%
1.2%
86 inmates

2.4%
12.5%
(5.0)%
(0.3)%
186 inmates

March
March

17,739
25,301

(41)
(33)

(487)
(252)

1st Quarter 2013
(1st Estimate)
April
March
Jan-Mar
April

$13.8 trillion

2.5%

1.8%

68.1
94.7
$4.38 billion
231.5

10.0%
(0.1)%
(1.9)%
(0.4)%

(0.9)%
1.7%
(1.5)%
1.1%

1.5%
2.0%
(0.6)%
4.8%
1.3%
(1.1)%
(0.1)%
(38.0)%
(2.4)%
(31.6)

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

Summary of Recent Agency Reports
Arizona Commerce Authority – Annual Report on the
Healthy Forest Enterprise Incentives Program – Pursuant
to A.R.S. § 41-1516 I, the Arizona Commerce Authority is
required to report on the Healthy Forest Enterprise
Incentives Program on May 1 annually regarding the: 1)
quantity and measured weight of qualifying forest
products reported; 2) number of new full-time
employees hired in qualified employment positions; and
3) number of all full-time employees employed in
qualified employment positions. In calendar year 2012
the total weight of qualified harvest, processed, or
transported forest products was 1.0 million tons;
however, none of the 4 companies participated in the
income tax credit portion of the program.

Department of Health Services – Report on Arnold v.
Sarn - Pursuant to a FY 2013 General Appropriation Act
footnote, the Department of Health Services (DHS) has
submitted the third quarter report on settling the Arnold
v. Sarn lawsuit.

The Healthy Forest Enterprise Incentives Program allows
businesses primarily engaged in the harvesting, initial
processing, or transporting of forest products in Arizona
to exempt qualified purchases from use and transaction
privilege taxes, a 50% reduction in the use fuel tax, a
reduction in the assessment ratio of personal and real
property from 25% to 5%, and an income tax credit of up
to $3,000 per employee on new jobs created. (Eric
Billings)

The latest agreement focuses on the conditions for
admission and the length of stay for Arnold class
members at the Arizona State Hospital (ASH), as DHS
and the Regional Behavioral Health Authorities (RBHAs)
have continued to coordinate discharges to provide
appropriate community support and services following
discharge, in addition to ensuring that ASH has a census
of 55 or fewer class members. DHS did not exceed this
limit at any time during the third quarter. As agreed
upon by the parties, DHS has not encouraged,
recommended, or provided funding for class members
in supervisory care homes, as the department has
prepared efforts to secure alternative housing for class
members in these homes. The latest agreement also
focuses on employment support for class members. DHS
reports that employment has increased by 0.13% during
the third quarter. The agreement further states that DHS
will implement Quality Service Reviews (QSR) in order to
evaluate network sufficiency, identify service gaps, and
maximize customer satisfaction. In order to comply with
the QSR provision of the agreement, DHS also continues
to contract with an independent third party to perform
chart reviews and inquiries with clients and families. (Art
Smith)

Department of Economic Security – Report on Cash
Assistance – Pursuant to a FY 2013 General
Appropriation Act footnote, the Department of
Economic Security reported its intent to use $500,000 in
appropriation authority for TANF Cash Benefits in FY 2013.
These monies are intended to ensure sufficient cash flow
for tribes operating their own programs. Instead, the
department will use the authority to pay for benefits.
(Ben Beutler)
Department of Economic Security – Report on the
Workforce Investment Act Grant – Pursuant to the FY
2013 General Appropriation Act, the Department of
Economic Security reported its plan to expend $5.5
million above the Workforce Investment Act Grant’s
$56.0 million appropriation. The excess $5.5 million
consists of $2.4 million in incentive funding and $3.1
million in unexpected balances. The monies will be
distributed to Local Workforce Investment Areas for job
training activities for dislocated workers and
disadvantaged adults and youth. (Ben Beutler)

The state has been a longstanding defendant in the
Arnold v. Sarn litigation concerning the level of services
provided to the Seriously Mentally Ill (SMI) population.
Due to the state’s fiscal condition, the plaintiffs and the
state agreed in March 2010 to suspend the lawsuit for 2
years due to lack of funding. The latest agreement with
the plaintiffs does not contain an exit criteria or a
schedule for compliance.

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

April Spending
April 2013 General Fund spending of $544.8 million was
$67.9 million higher than April 2012. Year-to-date,
spending is $7.4 billion, or $240.2 million above last year.

•

FY 2013 Spending
•

April 2013 spending of $544.8 million was $67.9 million
lower than April 2012 (See Tables 6 & 7).

The Department of Education spent $29.0 million
more than in April 2012. The higher expenditure
amount reflects higher General Fund funding for
the agency, as well as increased charter school
enrollment.
AHCCCS spent $(35.8) million less than in April
2012 as the result of a settlement from the
Tobacco Master Settlement Agreement.

Table 6
General Fund Spending ($ in Millions)

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

April 13

Change from
April 12

(35.8)
84.1
94.8
270.1
10.8
17.6
0.9

(43.1)
3.7
58.4
29.0
0.2
14.8
0.8

44.3
0.0

Year to Date

YTD Change
from FY 12

999.2
754.9
625.6
2,933.5
548.7
38.9
173.4

(197.4)
(2.8)
93.1
29.9
75.6
(3.4)
9.7

0.1
0.0

627.9
84.1

(13.1)
35.1

58.0
544.8

4.0
67.9

438.4
7,224.6

13.5
40.2

0.0

0.0

200.0

200.0

544.8

67.9

7,424.6

240.2

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2013

Table 7

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, Bldg and Life Safety
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 of Indian Affairs
Department of Insurance
Judiciary
Supreme Court
Superior Court
Court of Appeals
Department of Juvenile Corrections

April 13

Change from
April 12

Year-to-Date

YTD Change
from FY 12

5,041.0
72.0
659.9
(35,801.0)
1,572.5
-

4,326.0
7.1
25.9
(43,106.3)
411.2
(52.9)

25,974.1
84,119.8
684.5
6,205.9
999,230.9
17,635.6
4.4

13,253.0
35,069.1
2.5
(178.4)
(197,377.5)
(10.4)
4,059.3
(512.1)

54.7
2,625.0
16,048.2
48.8
84,080.5
2,362.9
94,787.9
270,143.5
592.4
12.2
20.8
60.5
214.8
271.5
201.2
67.4
534.1
10,758.1
210.7
53.2
111.0
4.8
391.1

(0.6)
(1,308.4)
16.8
3,662.2
533.9
58,400.4
29,006.6
(367.5)
(1.6)
(3.3)
(7.4)
8.6
54.7
(39.3)
(20.6)
(7.7)
195.5
11.4
12.8
(62.4)
(4.6)
(15.2)

614.9
26,250.0
64,192.6
485.0
754,860.1
18,336.9
625,566.8
2,933,507.5
6,637.3
7,000.0
67.7
417.6
650.1
2,307.8
1,547.2
4,485.4
712.2
6,907.8
548,745.4
2,579.8
556.6
1,735.9
42.5
3,973.0

14.0
5,350.0
65.7
(2,826.8)
1,134.2
93,088.4
29,859.1
886.5
(76.0)
(37.9)
(10.5)
122.9
41.3
642.7
(24.2)
3.1
1,519.4
75,583.5
(22.3)
(1.7)
(1,884.8)
(2.0)
(283.1)

937.2
9,545.3
1,040.4
2,866.9

(1,260.1)
(561.7)
54.7
(205.4)

11,959.8
65,965.6
10,955.4
33,171.8

(981.4)
(999.3)
(134.5)
(4,558.6)

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 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
OOffice of Tourism
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

April 13

Change from
April 12

Year-to-Date

YTD Change
from FY 12

126.4
5.4

8.7
0.5

878.7
54.8

17.1
7.5

1,296.9
1,007.1
144.6
357.1
673.8
97.9
8.9
193.2
17,591.4
100.1
220.6
268.0
3,311.4
867.6
636.5
18.2
366.0
0.4

(21.0)
8.4
2.9
27.0
(112.5)
(6.1)
0.9
187.5
14,840.4
71.3
1.1
110.4
1,464.3
787.3
(334.4)
(2.2)
366.0
(6.9)

13,986.4
9,455.3
1,537.7
5,771.8
6,444.8
912.7
97.3
1,064.9
1,396.7
38,993.4
1,977.5
1,291.0
2,005.0
33,387.0
173,410.5
14,131.3
211.7
3,857.9
19.8

(331.6)
(629.0)
(75.8)
1,541.5
(489.3)
(18.4)
(20.8)
(518.0)
(0.1)
(3,448.0)
(823.5)
(6.1)
82.8
(3,693.0)
9,680.6
6,156.1
(1.5)
3,857.9
(25.0)

5,101.6
17,381.2
5,924.2
15,870.8
506.7
800.3
327.8
1,994.5
544,788.0
544,788.0

4,605.8
(2,954.5)
(507.4)
(1,001.8)
(504.9)
652.3
229.8
240.3
67,856.5
67,856.5

36,223.5
264,387.6
89,736.8
237,637.3
4,452.4
7,626.4
1,322.9
4,267.8
7,224,628.7
200,000.0
7,424,628.7

19,824.4
(17,881.5)
(5,074.3)
(10,018.2)
(2,649.1)
3,753.4
435.5
(10,214.4)
40,171.4
200,000.0
240,171.4

Tracking Arizona’
Arizona’s Recovery

Total NonNon-Farm Employment
2,800

May 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

2005

2006

2008

2009

2011

JAN

JULY

JUL

2010

JAN

JUL

JAN

JUL

JAN

JUL

2007

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

JAN

2004

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

2007

Not seasonally adjusted

2008

2009

2010

Jan-13

Apr-13

Jul-12

Apr 12

Oct-12

Jan 12

Oct 11

Apr 11

July 11

Jan 11

Oct 10

Apr 10

July 10

Jan 10

Oct 09

July 09

Jan 09

Apr 09

Oct 08

July 08

Jan 08

Apr 08

Oct 07

July 07

Apr 07

JAN

JULY

JUL

2011

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

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

2003

JLBC

45,000

JLBC

2002

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

2001
Excludes temporary 1 ¢ sales tax

JLBC

5

2003

2004

JLBC

2005

2006

2007

2008

2009

2010

2011

JAN

JULY

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

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

2006

2007

2008

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

2008

2009

2011

JAN

JULY

JAN

JUL

JUL

2010

JAN

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

2001

JAN

JAN

JAN

JULY

JAN

JUL

JUL

JAN

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

2005

JAN

JAN

JUL

JAN

JUL

JUL

2002

JAN

140
JAN

0

JLBC

JAN

JUL

JAN

0
JAN

Jan-13

Apr-13

Jul-12

Oct-12

Jan 12

Oct 11

Apr 12

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