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

Summary
November General Fund revenue collections
totaled $592.8 million. Base revenues, which
exclude one-time adjustments, were 4.9%
above November 2012 and $41.0 million above
forecast. The year-over-year change excludes
the temporary 1-cent sales tax which expired
at the end of May 2013.
In November, Sales tax revenues grew 4.9%,
while Individual Income tax receipts increased
by 1.4%. Corporate Income tax collections
were relatively flat, but had been expected to
decline.

www.azleg.gov/jlbc.htm

“Year-to-date,
General Fund
revenues are
4.8% above the
prior year and
are $53.0 million

December 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. The operating balance has
stayed at a relatively constant level so far during
FY 2014, and is currently at a level of $1.9 billion
as of mid-November 2013.
In addition, the state’s Budget Stabilization Fund
has a balance of $453.1 million.

Year-to-date, General Fund revenues are 4.8%
above the prior year and are $53.0 million
above forecast. The current FY 2014 forecast
overage is split evenly between higher than
expected base revenue collections and
greater one-time revenues.
In comparison to revenue of $592.8 million,
November 2013 spending was $571.0 million
which is an increase of $30.6 million from the
prior year.
Fiscal year-to-date, General Fund revenues of
$3.48 billion have been offset by $4.93 billion of
expenditures.

above forecast.”

Table of Contents
Summary
November Revenues ............................................. 2
Economic Indicators .............................................. 4
JLBC Meeting........................................................... 7
Summary of Recent Agency Reports
 AHCCCS – Emergency Dept. Utilization ......... 7
 AHCCCS – Uncompensated Hospital Costs .. 7
This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
December 20, 2013.

 Auditor General – Foster Home Report .......... 8
 ACA – Arizona Competes Fund ....................... 8

 DES – Semi-Annual Report on CPS ................... 8
 ACJC – Crim. Justice Enhancement Fund .... 9
 ADE – Override Report ....................................... 9
 State Mine Inspector – Abandoned Mines .... 9
 ASRS – Incentive Compensation Plan ............. 9
 SFB – Litigation Costs Report ............................ 10

November Spending ............................................ 10
Tracking Arizona’s Recovery ............ Appendix A

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

November Revenues
Table 1

General Fund Revenues ($ in Millions)

November
Year-to-Date

FY 2014
Collections
$ 592.8
$ 3,481.4

Sales Tax collections of $323.9 million were 4.9% above
November 2012 and $0.4 million above the forecast for the
month. The year-over-year change amounts exclude the
temporary 1-cent sales tax which expired at the end of
May 2013.
For the first 5 months of the fiscal year, sales tax collections
are 6.8% above the prior year and are $16.0 million above
forecast.
Table 2 displays the November growth rates for the largest
sales tax categories.
Retail and contracting together account for about 60%
of all sales tax revenues. November retail, which reflects
October sales, increased by 7.2%. Year-to-date, retail
sales continue strong, at almost 8%.
Contracting collections have generally been much more
volatile than retail. However, the November increase of
12.9% represents the seventh consecutive month of
double-digit increases compared to the prior year.
Table 2

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Use
Restaurant & Bar

November
7.2%
12.9%
(3.5)%
5.0%

YTD
7.9%
16.7%
8.7%
2.9%

Individual Income Tax net revenues were $281.8 million in
November, which was 1.4% greater than the prior year.
Collections were $13.8 million above the forecast for the
month. Year-to-date, revenue has grown 6.1% over the
prior year, and is $35.3 million above the budget forecast.
As indicated in Table 3, withholding grew by 4.7% for the
month. This compares to the (1.9)% decrease in October.
The November increase brings withholding tax collections
for the fiscal year to a modest 3.8% over the prior year.
This amount is $(37.1) million below the budget forecast.
November estimated and final payments were 12.7%
above last year, and were $(1.5) million below the
forecast for the month. Year-to-date, payments are
$18.8 million above the forecast.

Difference From
Budget Forecast
$ 41.0
$ 53.0

Difference
From FY 2013
$ (51.7)
$ (128.9)

November refunds were 218.5% above last year, but were
still $8.3 million below forecast. November refunds last year
were extraordinarily low. Year-to-date, refunds are $53.6
million below forecast.
Table 3
Individual Income Tax Growth Rates
Compared to Prior Year
Withholding
Estimated +
Final Payments
Refunds

November
4.7%

YTD
3.8%

12.7%
218.5%

22.9%
6.1%

Corporate Income Tax net collections were $1.1 million in
November, which is $4.3 million more than November of the
prior year. Collections were $19.5 million above the budget
forecast.
Year-to-date, collections are down (16.7)% compared to
the prior year, and are $(21.5) million below the budget
forecast.
The Lottery Commission reports that November ticket sales
were $53.7 million, which is $(18.8) million, or (26.0)%, below
sales in the prior year. Year-to-date ticket sales are $278.2
million, which is 2.5% above last year’s sales.
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 $98.3
million in November were up $1.9 million, or 2.0%,
compared to November of last year. Year-to-date
revenues are 3.0% above collections in the prior year, and
are $9.7 million above the budget forecast.

3
Table 4

General Fund Revenue:
Change from Previous Year and FY 2014 Enacted Budget Forecast
November 2013
Current Month

FY 2014 YTD (Five Months)

Change From
Actual

November 2012

November 2013

Amount

Change from
Enacted Forecast

Percent

Amount

Actual

Percent

November 2012

November 2013

Amount

Enacted Forecast

Percent

Amount

Percent

Taxes
Sales and Use
Income - Individual
- Corporate

$323,933,003

$15,189,181

281,831,479

4,023,473

4.9 %
1.4

5.1

$105,834,695

1,535,434,206

88,486,298

35,310,545

2.4

1,527,513

50.9

6,986,554

1,959,163

39.0

1,586,554

29.4

Luxury - Tobacco

2,050,000

684,828

50.2

0

0.0

11,490,979

1,859,391

19.3

1,170,979

11.3

2,710,000

12,517

0.5

0

0.0

12,674,196

549,597

4.5

(85,804)

(0.7)

6,037,600

5,828,775

--

6,037,600

--

119,098,785

3,597,632

3.1

(5,784,515)

(4.6)

0

0

--

0

--

0

0

(47.5)

219,030

9,315

$3,511,116,133

$168,888,490

2,579,754

Sub-Total Taxes

(0.9)
5.4 %

(35,656)
$41,178,878

7.1 %

-4.4
5.1 %

(21,505,166)

1.0 %

60.8

(354)

(16.7)

$16,008,355

1,711,635

39,344

(33,407,601)

6.1

4,268,245

Other Taxes

166,899,239

6.8 %

4,527,513

Estate

--

$1,658,313,144

1,098,666

Insurance Premium

19,513,300

0.1 %

Property
- Liquor

--

$356,315
13,779,806

0
(155,970)
$26,544,978

(11.4)

-(41.6)

$622,227,605

$31,718,300

0.8 %

Lottery

3,256,125

532,585

19.6

256,125

8.5

14,003,414

1,503,414

12.0

License, Fees and Permits

2,915,888

325,072

12.5

415,888

16.6

12,471,864

(185,364)

(1.5)

71,864

0.6

12,086

9,241

324.8

12,086

--

10,306

(871)

(7.8)

10,306

Sales and Services

1,265,787

55,821

4.6

(234,213)

(15.6)

6,742,353

(100,897)

(1.5)

(1,257,647)

(15.7)

Other Miscellaneous

2,237,624

(762,376)

(25.4)

4,176,905

(7,492,529)

(64.2)

(4,523,095)

(52.0)

--

0

Other Revenue

Interest

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

0

(1,404,767)
0

7,571,540

(1,360,683)

$17,259,050

($1,842,731)

$639,486,655

$29,875,569

(38.6)
--

0

(15.2)

71,540

(9.6) %
4.9 %

($240,950)
$40,937,928

1.0

0

13,649,652

(554,320)

(1.4) %

$51,054,495

($5,754,226)

6.8 %

$3,562,170,627

$163,134,263

22.6

--

0

(3.9)

1,649,652

(10.1) %
4.8 %

($2,545,505)
$23,999,472

--

-13.7
(4.7) %
0.7 %

Other Adjustments
Urban Revenue Sharing

40,770

(0.1)

(234,035,883)

(20,042,533)

One-Time Transfers

0

0

--

0

--

150,691,561

114,691,561

318.6

26,691,561

Sales Tax - 1¢ Increase

0

(77,630,387) (100.0)

0

--

2,611,367

(386,655,630)

(99.3)

2,611,367

Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(46,709,330)

(46,709,330)
$592,777,325

(3,910,660)

9.1

(81,541,047)

-- %

40,770

(0.1) %

(80,732,955)

($51,665,478)

(8.0) %

$40,978,698

7.4 %

$3,481,437,672

2.0 %

$949,230

1.0 %

$504,634,438

9.4

(285,383)

0.1
21.5
--

(292,006,602)

-- %

29,017,545

(26.4) %

($128,872,339)

(3.6) %

$53,017,017

1.5 %

3.0 %

$9,714,552

2.0 %

Non-General Funds
Highway User Revenue Fund

$98,259,509

$1,912,698

$14,614,748

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

Recent Economic Indicators
NATIONAL

“Semiconductor
billings…
increased 3.3%
in October, to
$5.74 billion. This
reading is the
highest since
October 2000
during the dotcom era.”

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 3.6% in the third
quarter of 2013. This represented an
unexpected upward revision of the preliminary
estimate of 2.8% and an increase from the 2.5%
rate of growth in the second quarter.
Acceleration in the third quarter was largely
due to increases in inventory investment and
state and local government spending. Federal
government spending was the only major
component of GDP that decreased during the
quarter.
The Conference Board’s U.S. Consumer
Confidence Index decreased (2.8)% in
November and (1.5)% since November 2012.
The latest reading marks the third consecutive
monthly decline in the index and may not bode
well for holiday retail spending.
The Conference Board’s U.S. Leading Economic
Index grew by 0.2% in October, which
represents a slowdown after strong growth of
0.7% in August and 0.9% in September. During
the month, increasing stock prices and
multifamily unit building permits more than
offset negative contributions to the index from
worsening consumer confidence and
manufacturing orders.
The Semiconductor Industry Association (SIA)
reported that Semiconductor Billings (3-month
moving average) in the Americas increased
3.3% in October, to $5.74 billion. This reading is
the highest since October 2000 during the dotcom era, but is not adjusted for inflation.
October is the 6th consecutive month in which
billings have increased.
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 October, 44 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 1.9%
above last year, which is the 37th highest growth

rate in the country. While this is a significant
improvement, Arizona’s index is still (9.3)%
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 2.1% over the next 6 months.
This is lower than the revised 2.2% growth
projection in September and lower than the
3.6% projection in October 2012.
Housing
The number of Maricopa County pending
foreclosures decreased from 6,199 in October
to 6,065 in November. The November 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 increased from 23,232 in
November 2012 to 26,845 in November 2013,
a 15.6% increase.
In the Metropolitan Phoenix area, the median
price of a single family home was $200,000 in
October. This represents a 0.5% increase from
September, and a 27.4% increase from
October of last year.
Another measure of the health of the Arizona
real estate market is permitting activity. For
the 3-month period through October, a total
of 1,449 single-family building permits had
been issued statewide, an 7.2% 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.
In the 3-month period ending in October, a
total of 176 multi-family building permits were
issued in the state. This figure remains well
below the peak of activity in April 2007.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

Recent Economic Indicators (Continued)
Employment
According to the Arizona Department of
Administration’s monthly Workforce
Employment Report, the state added 25,900
nonfarm jobs from October to November.
Almost half of these job gains came from the
retail sector. Businesses typically hire additional
employees for the holiday season.
“Relative to the
prior 3-month
period, the
[Department of
Corrections]
population has
increased by 79
inmates.
Compared to a
year ago, the
population has
increased by 899
inmates.”

Year-over-year, private and public sector
employers had 47,500, or 1.9%, more
employees on their payrolls than 12 months
ago. The year-over-year job gains are
concentrated in 3 sectors of the economy:
trade, transportation, and utilities (+11,000),
education and health services (+10,800), and
financial activities (+9,600).
As of November, nonfarm employment of 2.56
million is (157,900) jobs, or (5.8)%, below the
pre-recession peak level of 2.72 million jobs.
The state’s unemployment rate fell from 8.2% in
October to 7.8% in November. This marked the
first time since May 2013 that the jobless rate
was below 8.0%. The U.S. unemployment rate
in November was (0.8)% lower than Arizona’s,
or 7.0%.
State Agency Data
At the beginning of December, total AHCCCS
caseloads decreased to 1.26 million
members. Overall, AHCCCS caseloads are
currently (0.7)% below December 2012 levels.
The traditional acute care AHCCCS
population, which consists primarily of lower
income children and their parents, decreased
by (0.8)% since last month while decreasing
(0.4)% since last year. The total population in
this program is almost 900,000.
The childless adult program has not allowed
new participants since July 2011 but will allow
new participants again beginning on January
1, 2014. Since July 2011, the population has
declined (156,722) to 67,770. As a whole, the
Proposition 204 program has declined (3.2)%
compared to the prior month, and (11.6)%
from the prior year.
KidsCare I provides coverage for 6,183
children with incomes above those in the
traditional population. Its enrollment has
declined since a freeze was implemented in

January 2010. Enrollment declined (26.2)%
from the prior year.
Beginning on May 1, 2012, AHCCCS began a
new program, entitled KidsCare II. The state
match is provided by voluntary payments
from political subdivisions. As of the beginning
of December, 40,578 children were enrolled in
KidsCare II. KidsCare II expires on January 31,
2014. On January 1, 2014, children in both
KidsCare I and KidsCare II up to 133% of the
Federal Poverty Level will transfer to the
traditional acute care program.
There were 35,767 TANF recipients in the state
in October, a monthly caseload decrease of
(4.6)%. Year-over-year, the number of TANF
recipients has declined by (14.9)%. The
statutory lifetime limit on cash assistance is 24
months.
The appropriation for TANF cash assistance in
the FY 2014 budget funds an average
monthly caseload of approximately 34,346
recipients in FY 2014. The 35,767 TANF
recipients includes 1,658 tribal recipients.
These recipients belong to tribes that operate
their own TANF program but contract with the
state for program administration, meaning
there were 34,109 state-funded TANF
recipients in October.
The Supplemental Nutrition Assistance
Program (SNAP), formerly known as Food
Stamps, provides assistance to
low-income households to purchase food. In
October, there were a total 1.1 million food
stamp recipients in the state, a (0.3)%
decrease over the prior month. Compared to
the same month last year, food stamp
participation was down by (2.5)%. 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 40,939 inmates in
November 2013. Relative to the prior 3-month
period, the population has increased by 79
inmates. Compared to a year ago, the
population has increased by 899 inmates.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 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 I
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 2009 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)

Time Period

Current Value

Change From
Prior Period

Change From
Prior Year

November
November
November
November
November
November
October
Sep-Nov
Sep-Nov

7.8%
17,762
35,184
2.56 million
154,500
124,400
40.4
$42.3 million
$155.7 million

(0.4) %
(24.3)%
(7.9)%
1.0%
0.0%
1.0%
0.2%
(1.2)%
1.5%

(0.2)%
(7.2)%
(11.2)%
1.9%
(1.0)%
4.5%
(0.2)%
15.8%*
7.6%*

Aug-Oct
Aug-Oct

1,449
176

(4.3)%
(44.4)%

7.2%
(65.4)%

October
October

7,045
1,063

(1.4)%
(2.8)%

(19.5)%
(15.6)%

October
October
September

$200,000
$119,900
143.14

0.5%
2.5%
1.2%

27.4%
27.6%
18.6%

November

6,065

(2.2)%

(49.3)%

November
October
October
September

26,845
3.31 million
$61.09
$4.41

2.6%
(2.1)%
17.4%
(1.3)%

15.6%
(0.5)%
2.3%
9.2%

4th Quarter 2013
October
Aug-Oct
2nd Quarter 2013
July 1, 2012
December

October
October
Sept-Nov

66.9
182.93
2.1%
$243.1 billion
6.55 million
1,258,142
879,782
67,770
142,668
6,183
40,578
54,510
66,651
35,767
1,109,788
40,939

October
October

17,386
25,025

3rd Quarter 2013
(2nd Estimate)
November
October
Aug.-Oct.
November

$15.8 trillion

3.6%

1.8%

70.4
97.5
$5.7 billion
233.9

(2.8)%
0.2%
3.3%
0.0%

(1.5)%
4.4%
20.1%
1.2%

* Excludes the temporary 1¢ increase that expired at the end of May 2013.

(7.7)%
0.1%
(0.1)%
1.5%
N/A
(1.3)%
(0.8)%
(2.6)%
(3.3)%
(4.3)%
(4.0)%
0.2%
(0.6%
(4.6)%
(0.3)%
79 inmates
(200)
11

(6.2)%
1.9%
(1.5)%
2.6%
1.3%
(0.7)%
(0.4)%
(24.4)%
(3.8)%
(26.2)%
84.3%
2.5%
7.0%
(14.9)%
(2.5)%
899 inmates
(747)
(438)

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

JLBC Meeting
At its December 17, 2013 meeting, the Joint Legislative
Budget Committee considered the following issues:
Arizona Department of Administration– Review of
Automation Fund Expenditures – The Committee gave a
favorable review to ADOA’s $3.4 million in proposed FY
2014 expenditures from the Automation Projects Fund for
projects at the Arizona Strategic Enterprise Technology
(ASET) Office in ADOA. These projects include data
storage, facility, and “cloud” computing enhancements
to the state’s Data Center; security, privacy, and risk
upgrades; and project management and oversight.
The Committee added technical provisions to its
favorable review.
Arizona Department of Administration – Review of
Requested Exchange of Automation Project Fund
Transfers and Report on the Arizona Financial
Information System (AFIS) Charge – The Committee
gave a favorable review of the request of 6 agencies to
replace the fund sources for 11 of their enacted fund
transfers to the Automation Project Fund. The
Committee also heard information regarding 5 agencies
electing not to participate in the AFIS replacement
project at this time.

Attorney General – Review of Plan to Transition Capital
Postconviction Prosecution Responsibility to Maricopa
County – The Committee tabled review of the capital
postconviction transition plan pending further discussion
with the Attorney General’s Office on the matter.
JLBC Staff –Consider Approval of Index for School
Facilities Board (SFB) Construction Costs – The
Committee approved a 0% adjustment in the cost-persquare-foot factors used in SFB funding formulas, based
on the overall decline in construction costs since
November 2008.
Secretary of State – Review of FY 2009 Records Services
Fund Spending Plan – The Committee gave a favorable
review of the Secretary of State’s expenditure plan of
$228,700 from the Records Services Fund which included
$109,300 for repairs at the Records Services Center,
$28,000 for transportation costs associated with moving
a statue of John C. Greenway from the U.S. Capitol’s
Statuary Hall back to Arizona, and $91,400 for building
renovation and code compliance projects.

Summary of Recent Agency Reports
Table 6
Emergency Department Utilization
By AHCCCS Recipients
Level

# Visits

I
II
III
IV
V
Total

53,028
133,454
330,641
254,567
92,947
864,637

Amount Paid
($ in Millions)
$

5.4
20.6
92.0
125.1
72.1
$315.2

%
Total Visits

% Paid
Amount

6.1%
15.4
38.2
29.4
10.7
100.0%

1.7%
6.5
29.2
39.7
22.9
100.0%

AHCCCS – Report on Emergency Department Utilization –
Pursuant to an FY 2014 Health and Welfare Budget
Reconciliation Bill (Laws 2013, 1st Special Session, Chapter
10) provision, AHCCCS submitted their report on
emergency department (ED) utilization. AHCCCS reports
that there is no standard or code set that identifies
whether an ED visit was the result of an emergency.
Therefore, AHCCCS used the American College of
Emergency Physicians’ facility coding which assigns visits
into 1 of 5 categories. Level I represents conditions such
as acute upper respiratory infection, removal of sutures, or
cough. Conditions such as severe burns or toxic ingestions
would be classified as a Level V visit, the most severe.
AHCCCS believes the number of Level I visits is a

“reasonable,” though imperfect, indicator of nonemergency use of ED services. A breakout of visits by
AHCCCS recipients is provided in the Table 6, above.
(Amy Upston)
AHCCCS – Report on Uncompensated Hospital Costs
and Hospital Profitability – Pursuant to an FY 2014 Health
and Welfare Budget Reconciliation Bill (Laws 2013, 1st
Special Session, Chapter 10) provision, AHCCCS
submitted its first report on uncompensated hospital
costs and hospital profitability. AHCCCS used data from
the 2011 and 2012 Uniform Accounting Reports,
statutorily required audited financial statements.
From 2011 to 2012, total uncompensated care costs
grew from $503.3 million to $733.8 million (45.8%
increase) and average operating profitability fell from
$8.1 million to $7.0 million (13.5% decline). More detail is
provided in the table below.
During this time, there were several AHCCCS-related
changes which may have impacted hospital financial
statements:


5% hospital provider rate decrease beginning on
4/1/11

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

Summary of Recent Agency Reports (Continued)





5% hospital provider rate decrease beginning on
10/1/11
25-day inpatient day limit beginning on 10/1/11
Phase out of the spend down program beginning
5/1/11
Childless enrollment freeze beginning 7/1/11

Competes Fund totaling $8.0 million in FY 2013.
ACA reports awarding 3 grants for the purpose of
expanding or retaining business in Arizona, totaling $3.5
million, from the Arizona Competes Fund in FY 2013. The
largest grant of $1.5 million was awarded to Go Daddy
Group, Inc., with Maverick HealthCare Group, LLC and
Accelerate Diagnostics each receiving $1.0 million.

Table 7
2011 and 2012 Hospital Uncompensated Care and Profitability
($ in Millions)
%
2012
2011
change
Total Uncompensated Care
Average Uncompensated
Care Per Hospital
Average % of Uncompensated
Care Per Hospital
Average Operating Profitability
Average Operating Margin
Average Occupancy Rate

$503.3

$733.8

45.8%

$

$

39.6

5.8

3.8%
8.1
5.1%
62.0%

$

8.1

5.8%
7.0
4.6%
59.1%

$

51.0
(13.5)
(10.0)
(3.4)

(Amy Upston)
Auditor General - Report on Foster Home RecruitmentRelated Services Contracts - Laws 2013, 1st Special Session,
Chapter 10 instructs the Auditor General to submit a report
addressing expenditures for the recruitment, retention,
training, licensing and tracking of foster care families as
part of Children Support Services. In FY 2012, the
Department of Economic Security (DES) spent $18.9 million
for contracted foster home recruitment-related services, or
10.8% more than FY 2011. The Auditor General believes the
current contract process of home recruitment study and
supervision is the most appropriate means to provide these
services.
In order to better improve its performance-based
contracting for foster home-related services, the Auditor
General recommends that DES develop a mechanism to
use performance measure data to monitor and assess
contractor performance, building greater incentives into
contracts that focus on DES’ critical goals, such as the
retention of foster parents. DES agreed to implement this
recommendation.
This is the first of 3 audits on Children Support Services. The
next 2 reports will be published in March 2014 and October
2014. (Ben Beutler)
Arizona Commerce Authority – Annual Report on Arizona
Competes Fund – Pursuant to A.R.S. § 41-1545.04, the
Arizona Commerce Authority (ACA) is required to report
annually on grants from the previous fiscal year and other
projects currently funded from the Arizona Competes Fund
and performance measures for the recipients including job
creation, capital investment and median wages.
In total, ACA awarded 22 grants from the Arizona

Each recipient agreed, as part of the granting process,
to meet certain metrics regarding job creation. The 3
recipients agreed, over the next 3 years, to create a
collective total of 741 jobs, provide average annual
wages of $62,000, make a collective capital investment
of $46.5 million, and pay for at least 65% of health
insurance costs. As of June 30, 2013, the grantees had
created 169 jobs, average annual wages of $73,000,
and $30.1 million in capital investment.
Additionally, ACA reports awarding 19 grants to support
rural and small businesses, totaling $4.5 million, from the
Arizona Competes Fund in FY 2013. Of this amount, $1.5
million was granted to 7 local government and
economic development entities for the purpose of
helping rural communities enhance economic
development programs. The 7 recipients agreed, over
the next 3 years, to create a collective total of 805 jobs,
provide average annual wages of $49,300, and make a
collective capital investment of $77.1 million. As of June
30, 2013, the grantees had created 422 jobs, average
annual wages of $58,300, and $36.6 million in capital
investment. The remaining $3.0 million in grants were
awarded to 12 early-stage companies for the purposes
of funding the start-up costs of small businesses. The
grants were made for a 1-year period and do not have
employment or development requirements attached to
them.
ACA awarded 4 grants for the purpose of expanding or
retaining business in Arizona in FY 2012 totaling $4.2
million. Through FY 2013, these grantees created 492
jobs with average annual wages of $63,500 and capital
investment of $12.7 million. This compares to
commitments of 956 jobs created, average annual
wages of $59,700, and capital investment of $25.7
million. The 4 grantees have until the end of FY 2015 to
reach the agreed upon metrics.
The Arizona Competes Fund receives an annual $21.5
million deposit of income tax withholding monies and
$3.5 million in state lottery revenues. The monies are
used to retain, attract, and expand businesses in Arizona
through the provision of grants and loans. As of June 30,
2013, the Arizona Competes Fund had a balance of
$45.8 million. (Eric Billings)
Department of Economic Security (DES) - Semi-Annual
Report on CPS - Pursuant to A.R.S. § 8-818, DES has

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

Summary of Recent Agency Reports (Continued)
submitted its semi-annual financial and program
accountability report. According to the report, out-ofhome placements increased from 14,159 in December
to 14,608 in June. Caseloads are above the
department’s goals and turnover for Child Protective
Services (CPS) case managers was approximately 10.9%.
Employee satisfaction has remained constant at a 3.6
rating on a 5 point scale. The highlights of this report,
covering the last 6 months of FY 2013, are summarized
below.


The CPS Training Academy had 224 new CPS case
managers in training as of June 2013.

As of June 2013, the number of filled positions was
1,240, including those in training and hotline staff.
Caseloads per worker remain considerably higher
than caseload goals, with investigations at 16 (goal:
10), in-home at 31 (goal: 19), and out-of-home at 24
(goal: 16).

DES reports that annualized case manager turnover
during January - June 2013 was 27.9%, down from a
28.6% annualized rate in the last report.

The percent of CPS dependency cases denied or
dismissed in the last 6 months increased to 0.14%
from 0.04% in the previous 6 months, while the
percent of Office of Administrative Hearing’s
decisions affirming CPS case findings decreased
from 87.5% to 78.4%. The percent of complaints
validated by the Ombudsman increased from 2.0%
to 19.0% (51 of 272 complaints).

The number of children in out-of-home family
placements increased from 11,427 in December to
11,909 in June, a 4.2% increase. The number of
congregate care placements increased from 2,030
to 2,107, a 3.8% increase. DES also reports that from
December to June the number of children aged 0-3
in shelter care grew from 27 to 43, the number of
children aged 0-6 in group homes decreased from
53 to 52, and the number of children in shelter care
for more than 21 days decreased from 104 to 98.
 The June numbers are labeled as preliminary.
(Ben Beutler)

Arizona Criminal Justice Commission – Report on
Criminal Justice Enhancement Fund – Pursuant to A.R.S.
§ 41-2401C, the Arizona Criminal Justice Commission
(ACJC) has provided its annual report on Criminal
Justice Enhancement Fund (CJEF) monies distributed to
law enforcement agencies. CJEF consists of a 47%
assessment on certain fines, penalties, and forfeitures
imposed and collected by the courts. In FY 2013, CJEF
revenues totaled $41.1 million and the total funds
available for the fiscal year, including the beginning
balance and adjustments, was $63.8 million. In FY 2013,
CJEF revenues decreased by (4.6)% from FY 2012; CJEF
expenditures totaled $41.9 million, and fund transfers

totaled $93,600. (Krista MacGahan)
Department of Education – Override Report – Pursuant to
A.R.S. § 15-249.04, the Arizona Department of Education
(ADE) recently reported FY 2014 data on school district
budget overrides. Overrides permit school districts to
generate and spend additional monies from local
property taxes if approved by voters. The ADE report
indicates that in FY 2014 102 districts statewide have
Maintenance and Operation (M&O) overrides pursuant
to A.R.S. § 15-481, 19 have “Special Program” overrides
pursuant to A.R.S. § 15-482, and 20 have “District
Additional Assistance” overrides pursuant to A.R.S. § 15481. The total amounts budgeted for overrides for FY
2014 include $383,661,700 for both types of M&O
overrides combined and $59,210,200 for District
Additional Assistance overrides. (Steve Schimpp)
State Mine Inspector – Report on Abandoned Mines
Safety Fund Expenditures and Contributions –The State
Mine Inspector is required by A.R.S. § 27-131 to establish
a program to address public safety hazards at
abandoned mines. A.R.S. § 27-131 created the
Abandoned Mines Safety Fund (AMSF) to fund the
program. The Mine Inspector must submit an annual
report to JLBC on or before December 1 detailing the
contributions to the AMSF, and the expenditures by the
fund during the preceding fiscal year.
For FY 2013, the State Mine Inspector reports that the
AMSF had no new revenue. The State Mine Inspector
secured 26 mine sites during FY 2013, at a total cost of
$44,800. The Mine Inspector has completed preliminary
planning for an additional 24 mine sites in FY 2014, with
an estimated cost of $47,600. The Mine Inspector
financed these activities through the fund’s carryforward balance. (Krista MacGahan)
Arizona State Retirement System - Report on Incentive
Compensation Plan – Pursuant to A.R.S. § 38-611.01, the
Arizona State Retirement System (ASRS), in consultation
with the Director of the Arizona Department of
Administration (ADOA), may establish an Incentive
Compensation Plan (ICP) for investment-related
personnel. Within 10 days of adopting such a plan, ASRS
is required to file the ICP with the JLBC.
The recently adopted ICP would apply only to the
investment staff, which currently consists of 10 FTE
Positions. The ICP has 3 stated objectives: 1) retain
investment professionals; 2) attract investment
professionals; and 3) incentivize investment
performance.
The maximum increase that any employee would
receive is limited to 25% of base pay. If all FTE Positions
received the maximum amount, the total cost would be

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

Summary of Recent Agency Reports (Continued)
$350,000 annually. Individuals are evaluated on a
variety of criteria, including individual and group
performance of various investments over the past 3
years, as well as a qualitative assessment which may
vary from one individual to the next. Before any
incentive pay is rewarded, however, the fund’s
performance as a whole must be greater than 0% over
the most recent fiscal year. (Ben Henderson)
School Facilities Board - Report on Costs for Current and
Potential Litigation – Pursuant to A.R.S. § 15-2041L, the
School Facilities Board (SFB) is required to annually
report on the costs associated with current and
potential litigation against the agency. The litigation
account was created to pay for attorney fees, expert
witness fees and other costs associated with litigation in

which SFB pursues the recovery of damages for
deficiencies correction that resulted from alleged
construction defects or design defects that SFB believes
caused or contributed to the failure of the school
building to conform to the building adequacy
requirements prescribed in A.R.S. § 15-2011.
SFB is not currently in litigation and does not expect
there to be potential litigation in pursuing the recovery
of damages for deficiencies corrections. The account
currently has a zero balance. (Ben Henderson)

November Spending
November 2013 General Fund spending of $571.0 million
was $30.6 million greater than November 2012. Year-todate, spending is $4.9 billion, or $47.4 million above last
year.



The Department of Education spent $143.1 million
more year-to-date due to increased per-student
funding for the agency as part of the FY 2014
budget.

(See Tables 8 & 9).



Department of Economic Security expenditures are
$64.2 million greater through November due to
increased funding levels for the agency in FY 2014.

Table 8
General Fund Spending ($ in Millions)
Change From
Nov 13

YTD Change

Nov 12

Year-to-Date

from FY 13

Agency
AHCCCS

112.5

12.7

561.0

2.9

Corrections

69.7

(7.1)

395.9

12.4

Economic Security

2.2

(0.6)

500.7

64.2

Education

226.9

(45.5)

2,064.8

143.1

Health Serv ices

63.6

49.2

446.4

(36.0)

Public Safety

1.6

0.3

16.5

1.8

School Facilities Board

0.1

(0.7)

157.5

14.9

Univ ersities

42.4

(1.0)

425.2

9.1

Leaseback Debt Serv ice

0.0

0.0

84.1

0.0

Other

52.0

23.3

275.8

35.0

Total

571.0

30.6

4,927.9

247.4

0.0

0.0

0.0

(200.0)

571.0

30.6

4,927.9

47.4

Budget Stabilization
Fund Deposit
Grand Total

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2013

Table 9

General Fund Spending
($ in Thousands)
Agency
Department of Administration
ADOA Sale/Leaseback Debt Service
Office of Administrative Hearings
Department of Agriculture
AHCCCS
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
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/Superior Court
Court of Appeals
Department of Juvenile Corrections

Nov 13
9,318.9
63.1
640.7
112,471.4
1,418.2
-

Change from
Nov 12
7,239.2
(22.0)
26.4
12,735.8
(791.5)
-

Year-to-Date
26,050.8
84,119.8
392.3
3,792.6
560,952.0
9,823.4
-

YTD Change
from FY 13
12,031.8
(35.3)
162.9
2,890.9
512.2
(4.1)

52.5

(1.1)

401.0

55.9

2,625.0
222.2
35.5
69,705.6
458.2
2,192.9
226,871.8
641.9
7,000.0
17.1
50.2
37.4
204.7
132.2
223.7
50.7
743.6
63,567.3
211.5
52.6
53.9
2.5
380.3

(1,518.1)
(14.1)
(7,082.7)
(8.7)
(574.3)
(45,522.2)
217.5
7,000.0
17.1
16.1
(30.3)
(10.9)
106.8
(176.1)
(133.9)
131.1
49,227.0
(10.6)
5.4
(72.6)
0.1
35.2

7,875.0
32,714.5
208.9
395,861.2
10,846.4
500,723.1
2,064,780.4
2,664.7
7,000.0
88.2
324.3
374.4
1,261.3
912.1
1,396.1
310.1
4,678.4
446,442.7
1,570.6
300.9
697.0
28.0
2,395.7

(1,879.1)
(30.8)
12,364.2
625.8
64,210.9
143,064.5
(796.1)
33.2
7.5
47.6
59.2
28.6
(561.2)
(145.1)
1,241.9
(35,979.2)
10.1
1.2
69.6
3.1
226.0

10,250.6
1,083.5
2,805.9

7,521.7
58.7
(383.8)

44,261.6
6,021.2
16,876.2

613.4
179.3
(1,362.9)

12

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 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
Occupational Safety and Health Review
Phoenix Convention Center
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
Department of Transportation
Commission on Uniform State Laws
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 - JP Salaries Distribution
Other
Total
Budget Stabilization Fund Deposit
Grand Total

Nov 13
1,394.3
-

Change from
Nov 12
1,362.4
(5.2)

Year-to-Date
5,194.3
-

YTD Change
from FY 13
4,675.7
(27.7)

1,487.5
913.3
147.0
556.1
626.6
81.5
8.7
0.4
4.9
1,580.5
34.3
165.7
4,909.0
95.5
878.7
17.2
603.8
0.3
-

154.3
96.7
12.6
161.9
53.1
(7.3)
1.3
0.4
(33.6)
287.3
(30.5)
11.0
2,514.3
(745.4)
(425.3)
(0.5)
105.9
(2.6)
-

7,978.7
4,990.0
843.6
3,241.4
3,344.6
540.5
51.5
0.4
20,449.0
440.6
698.4
16,522.3
1,789.8
748.0
1,173.1
25,005.1
157,462.2
6,030.5
127.4
2,440.5
1.0
55.7

698.9
482.2
77.5
(500.9)
336.0
23.3
(2.7)
0.4
14,854.0
(97.6)
1,791.3
(0.7)
79.3
105.6
6,250.1
14,876.0
(3,488.9)
3.6
210.0
(17.8)
55.7

(382.7)
19,640.4
6,562.5
16,596.4
395.9
806.6
100.4
207.5
0.4
571,018.0
571,018.0

(4,594.4)
2,259.2
636.7
725.6
2.4
80.5
(0.7)
(12.7)
0.4
30,593.1
30,593.1

11,202.5
188,777.5
63,307.4
161,911.7
2,214.0
4,379.5
508.5
371.8
0.4
4,927,946.9
4,927,946.9

(9,054.4)
11,296.0
3,183.4
3,628.1
(204.0)
616.8
(49.9)
3.8
0.4
247,449.6
(200,000.0)
47,449.6

Total Non-Farm Employment

Tracking Arizona’s Recovery
December 2013
Appendix A

2,800

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

2004

2005

2006

2009

2011

JUL

JAN

JULY

JUL

2010

JAN

JUL

JAN

JUL

2008

JAN

JUL

2007

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

JAN

2003

2012 2013

2

Not seasonally adjusted

State Sales Tax Collections – Retail Category
$225

45,000
40,000

$200
35,000

$ in Millions

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

$175

$150

$125

2006

2007

Not seasonally adjusted

2008

2009

2010

2011

Oct-13

Jul-13

Jan-13

Apr-13

Jul-12

Oct-12

Jan 12

Apr 12

Oct 11

July 11

Jan 11

Oct 10

Apr 11

Apr 10

July 10

Jan 10

Oct 09

Apr 09

July 09

Jan 09

Oct 08

Jan 08

Apr 08

July 08

Oct 07

July 07

Jan 07

JUL

JAN

JULY

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

2005

JAN

JUL

2004

JAN

JUL

2003

JAN

JUL

2002

JAN

JUL

JAN

JAN

2001

Apr 07

$100

5,000

Oct 06

10,000

July 06

Total Monthly Claims for UI Benefits

2002

JLBC

Initial Claims for Unemployment Insurance

JLBC

JAN

JUL

JAN

JAN

2,100

2012 2013

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

$50

$25

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

2001
Excludes temporary 1 ¢ sales tax

JLBC

5

2003

JLBC

2007

2008

2009

2010

2011

2012

JUL

JAN

JULY

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

2006

JAN

JUL

2005

JAN

JUL

2004

JAN

JUL

JAN

JUL

2002

2013

6

12-Month Moving Sum

Maricopa County Pending Foreclosures

Economic Activity Index
210

50,000

200

Coincident Index Value

60,000

40,000

30,000

20,000

10,000

190
180
170
160
150

2003

2005

2006

2007

2008

2009

2010

2011

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

2012

2001

7

JLBC

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

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.

JUL

JAN

JAN

JULY

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

JAN

2013

JAN

140

JUL

JAN

JULY

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JAN

JUL

JUL

2004

JAN

JAN

JUL

JUL

2002

JAN

JAN

0

JLBC

JAN

JUL

0
JAN

Jul-13

Oct-13

Jan-13

Apr-13

Jul-12

Oct-12

Jan 12

Oct 11

Apr 12

July 11

Jan 11

Oct 10

Apr 11

July 10

Jan 10

Apr 10

Oct 09

July 09

Jan 09

Apr 09

Oct 08

Jan 08

Apr 08

July 08

Oct 07

Jan 07

July 07

Oct 06

Apr 07

10,000
July 06

$0

80,000

JAN

$ in Millions

$75

2013

8