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

www.azleg.gov/jlbc.htm

" Year-to-date,
…General
Fund revenues
are 3.3%
above the
prior year and
are $65.5

December 2016

Summary
November 2016 General Fund revenues were
$670.6 million, which is a decrease of (8.0)%
below the prior year. This decline is almost
entirely due to a reduction in the level of
budgeted one-time fund transfers. There were
no fund transfers during November 2016,
compared to a level of $58.4 million during
November 2015.

In comparison to revenue collections of $670.6
million, November 2016 spending was $564.8
million, which is a decrease of $(18.3) million
from the prior year.

Looking at the November results excluding
Urban Revenue Sharing and one-time fund
transfers, General Fund revenues were 0.7%
above the prior year and $(3.0) million below
the enacted forecast.

The operating fund balance consists of the
General Fund and certain dedicated funds.
The operating balance as of mid-November
2016 is $1.68 billion, while the state's Budget
Stabilization Fund has a current balance
$451.9 million.

The relatively minor forecast loss was the
outcome of mixed results across the state's
revenue categories.

Fiscal year-to-date, General Fund revenues of
$3.70 billion have been offset by $4.90 billion of
expenditures.

Sales Tax had another month of poor
performance, declining by (0.2)% and ending
up $(9.0) million below forecast. This was
partially offset by gains in the Individual
Income Tax and smaller miscellaneous
revenue categories.
Year-to-date, excluding Urban Revenue
Sharing and one-time fund transfers, General
Fund revenues are 3.3% above the prior year
and are $65.5 million above the enacted
forecast.

million above

Table of Contents

the enacted
forecast.”

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
December 20, 2016.

Summary

• County Attorneys – Deferred Prosecution .... 11

November Revenues ............................................. 2

• Courts – Dependency Surge .......................... 11

Monthly Indicators.................................................. 4

• ACJC – CJEF Report ......................................... 11

JLBC Meeting .......................................................... 7

• Economic Opportunity – Annual Report ...... 12

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

• Economic Security – Domestic Violence...... 12

Summary of Recent Agency Reports

• Education – Override Report .......................... 12

• ADOA – Motor Vehicle Fleet ............................ 9

• Executive Clemency – FY 2016 Caseload .... 12

• ADOA – Repayment of State Debt ................. 9

• Postsecondary Ed. – Grant Program ............. 12

• DCS – Monthly Hiring Report ............................. 9

• Postsecondary Ed. – Loan Forgiveness ......... 13

• DCS – Foster Care Medicaid Report ............... 9

• Sec. of State – PPE Election Expenditures..... 13

• Commerce – Competes Fund Report .......... 10

• ABOR – Financial Aid Report .......................... 14

• Comm. Colleges – Annual Report ................. 10

November Spending............................................ 14

• Comm. Colleges – Prop 301 Expenditures ... 11

Arizona Economic Trends...................Appendix A

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

November Revenues
Table 1

General Fund Revenues ($ in Millions)

November
Year-to-Date

FY 2017
Collections
$ 670.6
$ 3,700.4

Sales Tax (preliminary) collections of $357.9 million were
(0.2)% below November of last year and $(9.0) million
below the forecast for the month. Year-to-date, Sales Tax
revenues have increased by 2.8% and are $(0.9) million
below forecast.
Table 2 below provides additional information on the
major categories of the state’s sales tax, which together
account for approximately 90% of total collections.
Table 2

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Use
Restaurant & Bar
Utilities

November
1.8%
(0.4)%
(3.6)%
6.2%
(7.5)%

YTD
3.5%
3.0%
(0.9)%
8.4%
(0.6)%

Individual Income Tax net revenues of $315.5 million in
November were $(8.1) million less than the prior year and
$3.8 million above forecast for the month. Year-to-date,
revenue has grown 5.1% over the prior year.
As indicated in Table 3, withholding decreased by (0.1)%
from last year and was $4.6 million above the forecast.
The monthly decrease was, in part, the result of 1 less
major processing day compared to November of 2015.
Year-to-date withholding collections are 6.6% above FY
2016. Due to technical reasons, DOR underreported
withholding receipts during July – March in FY 2016. If
revenues had not been underreported in the beginning
of FY 2016, growth in withholding would instead equal
5.3% year-to-date in FY 2017.
November estimated and final payments of $40.4 million
were 82.0% above last year and $16.9 million above the
forecast. The monthly increase in payments may partly
reflect timing issues for processing returns of taxpayers
that took extensions on their 2015 returns. Year to date,
payments are (1.9)% below those collected during the
same period of FY 2016.
November Individual Income Tax refunds totaled $(44.6)
million – this compares to $(18.7) million in November
2015 and a forecasted amount of $(27.0) million. The
reasons for the large monthly increase in refunds may
partly reflect timing issues for processing returns of
taxpayers that received extensions on their 2015 returns.
Year-to-date refunds have led to a $16.3 million gain
compared to the enacted forecast.

Difference From
Budget Forecast
$
(3.0)
$
65.5
Table 3

Difference
From FY 2016
$
(58.3)
$
45.4

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated/Final Payments
Refunds

November
(0.1)%
82.0%
138.3%

YTD
6.6%
(1.9)%
8.7%

Corporate Income Tax net collections were $14.3 million
in November, which was $(6.3) million less than in the
prior year and $(0.8) million less than the forecast. Year
to date, collections are $(58.7) million below prior year
collections. This decrease is probably the result of the
multi-year statutory decline in the Corporate Income Tax
rate and a decline in corporate profits during the last
year.
Insurance Premium Tax collections of $0.2 million in
November were $0.1 million above the prior year and
$(0.1) million below the forecast. Year-to-date,
collections are 10.1% above last year and $18.4 million
above the forecast.
The Lottery Commission reports that November ticket
sales were $66.2 million, which is $5.3 million, or 8.6%,
above sales in November 2015. Year-to-date ticket sales
are $314.8 million, which is 3.7% above last year’s
sales. In terms of General Fund collections, year-to-date
lottery revenues are $13.1 million above the forecast.
Highway User Revenue Fund (HURF) collections of $110.8
million in November were up 2.3% compared to
November of last year and were $1.6 million above
forecast. Year-to-date collections are 4.0% above last
year.
A total of $11.5 million has been added to prior month
collection figures. Of that amount, $1.2 million
represents technical adjustments, due to DOR reporting
delays of final sales, luxury, individual income and
corporate income tax data.
The remaining $10.3 million increase to prior month
collection figures represents adjusting revenue amounts
to reconcile to the FY 2016 Annual Financial Report
released by the General Accounting Office on
December 1, 2016. Of these adjustments, $3.5 million of
Insurance Premium Tax revenues and $12.8 million of
Lottery profits have now been credited to FY 2017,
rather than to FY 2016. These gains are offset by the loss
of $(6.0) million under the Sales and Services category,
as these collections were credited to FY 2016 instead of
FY 2017.

3
Table 4

General Fund Revenue:

Change from Previous Year and Budget Forecast
November 2016
Current Month

FY 2017 YTD (Five Months)

Change From
Actual

November 2015

November 2016

Amount

Change from
Budget Forecast

Percent

Amount

Actual

Percent

November 2015

November 2016

Amount

Budget Forecast

Percent

Amount

Percent

Taxes
Sales and Use

$357,856,892

($581,598)

(0.2) %

315,453,040

(8,088,698)

(2.5)

14,316,229

(6,282,313)

(30.5)

(779,399)

(5.2)

130,643,428

(58,705,432)

(31.0)

(23,903,068)

(15.5)

Property

5,938,936

1,289,392

27.7

(166,394)

(2.7)

11,527,762

(1,651,926)

(12.5)

(1,512,948)

(11.6)

Luxury - Tobacco

1,903,020

159,316

9.1

0

0.0

9,890,870

(21,914)

(0.2)

(35,606)

(0.4)

3,173,447

239,417

8.2

0

0.0

13,507,415

669,862

5.2

89,852

0.7

167,822

118,983

243.6

14,046,422

10.1

18,392,814

13.7

(1,119,977)

(48.0)

(1,472,034)

(54.8)

Income - Individual
- Corporate

- Liquor
Insurance Premium
Other Taxes
Sub-Total Taxes

30,439

(2,136,664)

$698,839,825

($15,282,166)

(98.6)
(2.1) %

($9,033,213)
3,839,449

(2.5) %
1.2

$1,817,297,915

$48,743,442

1,752,282,229

84,352,211

(129,247)

(43.5)

152,826,207

(1,034,813)

(97.1)

1,215,715

($7,303,616)

(1.0) %

$3,889,191,541

$86,312,689

2.8 %
5.1

2.3 %

($891,490)
45,892,051

$36,559,571

(0.0) %
2.7

0.9 %

Other Revenue
Lottery
License, Fees and Permits
Interest
Sales and Services
Other Miscellaneous
Disproportionate Share
Transfers and Reimbursements
Sub-Total Other Revenue
TOTAL BASE REVENUE

13,942,250

13,942,250

3,383,451

878,114

27,643

26,119

3,304,032

1,864,375

129.5

2,102,338

(3,477,432)

(92.8)

(2,922,859)

268,623

-35.0
--

252,143

1.8

26,744,043

13,812,568

106.8

13,053,936

95.4

715,098

26.8

14,533,364

2,365,364

19.4

1,255,574

9.5

148,419

138,918

174.9

10,304,391

5,722,099

124.9

3,532,725

52.2

(91.6)

19,587,730

10,601,971

118.0

11,705,333

148.5

--

0

0

15,235,055

7,772,631

26,093

0

0

--

0

6,155,318

6,952,873

--

4,147,378

$27,081,317

$20,186,298

292.8 %

$725,921,142

$4,904,132

0.7 %

(4,828,986)

9.6

--

206.5

--

-104.2

134,756

0
(753,671)

--

-(4.7)

$4,320,190

19.0 %

$86,553,002

$40,413,551

87.6 %

$28,928,653

50.2 %

($2,983,426)

(0.4) %

$3,975,744,543

$126,726,239

3.3 %

$65,488,224

1.7 %

Other Adjustments
Urban Revenue Sharing
One-Time Transfers
Sub-Total Other Adjustments
TOTAL GENERAL FUND REVENUE

(55,298,514)
0
(55,298,514)
$670,622,629

(58,382,000) (100.0)

(0)

0.0

0

--

(276,492,570)
1,191,548
(275,301,022)

(24,144,931)
(57,190,452)
(81,335,383)

9.6

(0)

0.0

0

0.0

41.9 %

0

0.0 %

(98.0)

(63,210,986)

-- %

(0)

0.0 %

($58,306,854)

(8.0) %

($2,983,426)

(0.4) %

$3,700,443,521

$45,390,856

1.2 %

$65,488,224

1.8 %

2.3 %

$1,588,753

1.5 %

$571,600,177

$21,998,798

4.0 %

$15,829,880

2.8 %

Non-General Funds
Highway User Revenue Fund

$110,796,415

$2,445,101

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Monthly 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 3.2% in the
third quarter of 2016. This estimate is the highest rate of
growth since the third quarter of 2014 and reflects a
strong pickup from the weak growth of 1.4% in the
second quarter of 2016. The acceleration relative to the
prior quarter was primarily due to growth in inventory
investment, exports and federal government spending.
Improved performance in these categories was partly
offset by a deceleration in consumption spending and
an increase in imports.
The Conference Board’s U.S. Consumer Confidence
Index increased by 6.3% to a post-recession high of 107.1
in November. The large monthly increase followed on a
(4.7)% decrease in October that may have been driven
by political uncertainty in the lead-up to the election.
The increase in November reflected widespread
improvement in consumer optimism about current and
future economic and job circumstances. Economists
think the recent increase may have also been bolstered
by the positive reaction of stock markets to November
election results. Year-over-year growth for the index rose
to 15.7% in November.
According to the U.S. Department of Commerce Bureau
of Economic Analysis, the U.S. Personal Consumption
Expenditure Price Index (PCEPI) grew 0.2% in October,
relative to September. The monthly increase in the
overall measure was largely driven by growth of 3.8% in
energy prices. The index's year-over-year growth
increased to 1.4% and has been steadily moving closer
to the Federal Reserve Bank's (Fed) 2.0% annual inflation
target in recent months. Citing increased inflation and
an improving labor market, the Fed chose to resume
increases to the federal funds interest rate in December
2016.
Consumer prices, as measured by the U.S. Consumer
Price Index (CPI), increased 0.4% in October and 1.6%
above October 2015 prices. Similar to September, the
monthly increase was primarily driven by a 7.0% increase
in the gasoline index and also by a 0.4% increase in the
shelter index. Energy prices increased 3.5%, the largest
monthly increase since February 2013. Core inflation (all
items less food and energy) increased 0.1% for the
month. Indexes for apparel, new vehicles, and motor
vehicle insurance increased, while indexes for personal
care, communication, used cars and trucks, recreation,
and airfare decreased.
The Conference Board's U.S. Leading Economic Index
increased by 0.1% in October and stands 1.1% above its
October 2015 reading. Of the index's 10 components, 6
made positive contributions in October. Average

weekly manufacturing hours contributed positively in
October after making negative contributions in the
past 2 months. Interest rate spread was the strongest
positive contributor, while average weekly initial claims
and the ISM for new orders were the strongest negative
contributors.
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.
Arizona’s coincident index increased by 3.0% compared
to October 2015. Over the same time period, the U.S.
coincident index increased by 2.9%. See Appendix A –
Arizona Economic Trends for additional historical
information.
Housing
Single-family housing construction is increasing. Multifamily construction had previously peaked, but has
recently started to increase again. Arizona’s 12-month
total of single-family building permits is 23,964, or 10.5%
more than a year ago. The comparable single-family
permit growth rate for the entire U.S. is 9.4%. See
Appendix A – Arizona Economic Trends for historical
information.
The 12-month total of multi-family building permits has
started to increase again. Arizona’s total of 10,153
multi-family building permits is 4.4% more than 2015.
Arizona’s rate of increase is now greater than the
comparable multi-family permit growth for the U.S. as a
whole, which is (5.1)% lower than 2015.
Employment
According to information released by the Office of
Economic Opportunity (OEO), the state added 16,800
net new nonfarm jobs in November over the prior
month. This was significantly below the average
employment gain for November in the prior 5 years,
which was 29,500.
Compared to the same month in the prior year, the
state added 29,900 nonfarm jobs in November. This
represents a net job growth rate of 1.1%, which is the
smallest employment increase since July 2011. Arizona
job growth has slowed considerably since August. To
provide some perspective, the average job growth
rate from January to July of 2016 was 3.0% compared
to 1.8% in the period from August to November.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Monthly Indicators (Continued)
Among the private sector industries, the manufacturing
sector continues to underperform in Arizona with a yearto-date job growth rate of only 0.6%. Manufacturing
employment made up 5.76% of statewide employment
in November, the lowest such share since at least
January 1960 (data before this period is not available).
The state’s unemployment rate declined from 5.2% in
October to 5.0% in November. This was the lowest
jobless rate in Arizona since February 2008. The U.S.
unemployment rate was 4.7% in October, a decrease of
(0.4)% over the prior month.
In October, the Average Weekly Hours worked by
individuals in Arizona’s private sector was 34.7 hours.
This workload was 1.8% above the level during the prior
month and 0.3% above the level in October 2015.
The Average Hourly Earnings received by private sector
workers was $24.55, which is 1.4% above the average in
the prior month. October earnings were 5.3% above
the average in October 2015. The reading represented
only second time since the start of calendar year 2010
that year-over-year earnings growth exceeded 5.0%.
OEO reported that 17,773 initial claims for
unemployment insurance were filed in October, an
increase of 3.8% compared to the same month last
year. This was the first year-over-year increase of initial
jobless claims for the month of October since 2013.
According to OEO, the state had a total of 28,421
claimants receiving unemployment insurance benefits
in October, a decrease of (5.2)% from September. This
figure was (4.4)% below the October 2015 level, and
represented the lowest number of claimants receiving
jobless benefits for the month of October in 10 years.
State Agency Data
At the beginning of December 2016, the total AHCCCS
caseload was 1.9 million members. Since the federal
health care expansion in January 2014, the overall
AHCCCS population has grown by 609,600 members.
Total monthly enrollment increased by 4,200 members,
or 0.2%, during November. Approximately half of the
overall enrollment increase was concentrated in the
Traditional population of low income parents and
children, which grew by 2,100 members, or 0.2%, in
November.
Laws 2016, Chapter 112 reopened enrollment in the
KidsCare program for children with family incomes
above those in the Traditional population, beginning
September 1, 2016. Following the enrollment freeze in
January 2010, the KidsCare caseload had dropped to

500 members by August 2016. Through December 1,
enrollment in the program reached 9,700, or 500 more
than the prior month’s enrollment.
In January 2014, the state started accepting new
enrollment to the Proposition 204 childless adults
program. In November 2016, the childless adult
population increased by 1,500, or 0.5%. At 318,200,
this population is 3.1% higher than a year ago.
The state also opted to expand adult Medicaid
coverage to 133% of FPL. Their enrollment increased
by 900 in November and now totals 82,000 individuals.
Enrollment is 4.1% higher than a year ago. The federal
government pays 100% of this cost through the end of
calendar year 2016. The federal match rate for this
population drops to 95% in calendar year 2017.
There were 19,752 TANF recipients in the state in
November, representing a (1.6)% decrease from
October. The year-over-year number of TANF
recipients has declined by (15.0)%. The statutory
lifetime limit on cash assistance is 12 months.
The Supplemental Nutrition Assistance Program
(SNAP), formerly known as Food Stamps, provides
assistance to low-income households to purchase
food. In November, 967,468 people received food
stamp assistance in the state, representing a (0.8)%
decrease over October caseloads. Compared to
November 2015, the level of food stamp participation
has declined by (2.9)%.
The inmate population was 42,447 as of November 30,
2016. This is a (0.8)% decrease since last
November. The population decreased by (0.3)%
since October 2016. Laws 2016, Chapter 119 included
a provision that if the male inmate count exceeds
39,762 by November 2016, the department may open
1,000 additional private prison beds. As of November
30, 2016, ADC held 38,418 male prisoners. As a result,
ADC no longer has the authority to open these 1,000
additional beds and will instead need new legislative
authorization for added capacity.
Based on information the Department of Child Safety
provided for October 2016, reports of child
maltreatment totaled 48,111 over the last 12 months,
a decrease of (5.9)% over the prior year. There were
18,046 children in out-of-home care as of September
2016, or (3.3)% less than in September
2015. Compared to the prior month, the number of
out-of-home children decreased by (0.1)%.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016
Table 5

MONTHLY INDICATORS

Indicator
Arizona
Employment
- Regular Unemployment Rate
- Total Unemployment Rate (discouraged/underemployed)
- Initial Unemployment Insurance Claims
- Unemployment Insurance Recipients
- Non-Farm Employment - Total
Manufacturing
Construction
- Average Weekly Hours, Private Sector
- Average Hourly Earnings, Private Sector
Sales
- Retail Taxable Sales
Motor Vehicles/Misc. Auto
Furniture/Home Furnishings
Building Material/Lawn & Garden
Building
- Residential Building Permits (12-month avg)
Single-family
Multi-family
- Maricopa County/Other, Home Sales (ARMLS)
Single-Family (Pending Sales)
- Maricopa County/Other, Median Home Price (ARMLS)
Single-Family (Pending Sales)
- Phoenix S&P/C Home Price Index (2000 = 100)
- Maricopa Pending Foreclosures
- Greater Phoenix Total Housing Inventory, (ARMLS)
Tourism
- Phoenix Sky Harbor Air Passengers
- National Park Visitors
- State Park Visitors
- Revenue Per Available Hotel Room
General Measures
- Arizona Consumer Confidence Index (1985 = 100)
- Arizona Coincident Index (July 1992 = 100)
- Arizona Leading Index -- 6 month projected growth
- Arizona Personal Income
- Arizona Population
- State Debt Rating
Standards & Poor’s/Moody’s
Outlook
Agency Measures
- AHCCCS Recipients
Acute Care Traditional
Prop 204 Childless Adults
Other Prop 204
Adult Expansion
Kids Care I
Long-Term Care – Elderly & DD
Emergency Services
- Department of Child Safety (DCS)
Annual Reports of Child Maltreatment (12-month total)
DCS Out-of-Home Children
Filled Caseworkers (1406 Budgeted)
- ADC Inmate Growth
- Department of Economic Security
- TANF Recipients
- SNAP (Food Stamps) Recipients
- Judiciary Probation Caseload
Non-Maricopa
Maricopa County
United States
- Gross Domestic Product
(Chained 2009 dollars, SAAR)
- Consumer Confidence Index (1985 = 100)
- Leading Indicators Index (2010 = 100)
- Consumer Price Index, SA (1982-84 = 100)
- Personal Consumption Price Index (2009 = 100)

Change From
Prior Period

Change From
Prior Year

Time Period

Current Value

November
3rd Q 2016
October
October
November
November
November
October
October

5.0%
10.9%
17,773
28,421
2,746,900
158,300
136,700
34.7
$24.55

(0.2)%
(0.4)%
6.4%
(5.2)%
0.6%
0.4%
(1.9)%
1.8%
1.4%

(0.9)%
(2.7)%
3.8%
(4.4)%
1.1%
(1.3)%
3.6%
0.3%
5.3%

August
August
August

$1.01 billion
$331.1 million
$396.4 million

3.9%
(4.2)%
(5.8)%

5.5%
4.1%
6.1%

October
October

23,964
10,153

0.2%
(4.5)%

10.5%
4.4%

October

5,391

(3.8)%

17.5%

October
September
October
October

$242,900
163.27
3,415
25,040

(0.8)%
0.3%
(2.6)%
4.0%

8.0%
5.3%
(24.0)%
1.6%

October
August
August
August

3,564,888
1,647,913
184,610
$53.83

12.5%
(8.8)%
(34.7)%
(5.5)%

(3.9)%
(10.2)%
(5.0)%
5.5%

4th Q 2016
October
October
2nd Q 2016
July 2015

91.7
223.19
5.6%
$275.3 billion
6,828,065

May
May

3.7%
0.5%
0.9%
1.2%
N/A

12.9%
3.0%
0.3%
3.3%
1.5%

AA / Aa2
Stable

N/A
N/A

N/A
N/A

December 1st

1,867,696
1,092,926
318,239
184,407
81,982
9,701
58,760
121,680

0.2%
0.2%
0.5%
(0.6)%
1.1%
5.6%
0.0%
0.3%

October
September
November
November

48,111
18,046
1,343
42,447

(0.9)%
(0.1)%
2
(0.3)%

November
November

19,752
967,468

(0.7)%
(0.8)%

September
September

18,880
27,766

29
(17)

583
502

$16.7 trillion

1.6%

3.2%

107.1
124.5
241.86
111.4

6.3%
0.1%
0.4%
0.2%

15.7%
1.1%
1.6%
1.4%

3rd Q, 2016
(2nd Estimate)
November
October
October
October

3.4%
3.5%
3.1%
(1.6)%
4.1%
1074.5%
1.9%
4.0%
(5.9)%
(3.3)%
64
(0.8)%
(16.2)%
(2.9)%

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

JLBC Meeting
Arizona Department of Administration – Review of
Emergency Telecommunication Services Revolving
Fund Expenditure Plan – The Committee gave a
favorable review of the $5.1 million wireless portion of
the Emergency Telecommunication Services Revolving
Fund expenditure plan.
Arizona Department of Administration – Review of
Public Safety Broadband – The Committee gave a
favorable review of ADOA's annual report on
expenditures for the State and Local Implementation
Grant Program (SLIGP). These monies are part of a
nationwide planning effort associated with a public
safety broadband effort.
Arizona Department of Administration – Review of
Automation Project Fund Expenditure Reallocation –
The Committee gave a favorable review of the
reallocation of the ADOA Arizona Strategic Enterprise
Technology (ASET) Office’s FY 2016 Automation
Projects Fund (APF) appropriation to develop a
Customer Relationship Management System to
communicate with agencies on the status of
Information Technology (IT) projects.

Arizona Department of Education – Review of Joint
Technical Education District (JTED) Quarterly Report –
The Committee gave a favorable review of ADE's
October 31, 2016 JTED quarterly report, which
rejected 3 programs from additional state funding:
Arts Management, Entrepreneurship and
Entertainment Marketing. The request did not
address the Food Products and Processing Systems
Program, which was not reviewed by the Committee
at its September meeting.
JLBC Staff - Consider Approval of Index for School
Facilities Board Construction Costs – The Committee
approved a 4.31% adjustment in the cost-per-squarefoot factors used in SFB funding formulas, based on
the overall change in construction costs since
November 2008. This is the first increase the
Committee has approved since November 2008.
Department of Public Safety – Review of Sexual
Assault Kit Report and Expenditure Plan – The
Committee gave a favorable review of DPS' report on
sexual assault kits and the $500,000 expenditure plan
for the Sexual Assault Kit Testing line item.

Arizona Department of Administration/Arizona
Department of Corrections – Review of FY 2017 Adult
Inmate Management System (Automation Projects
Fund) – The Committee gave a favorable review of the
FY 2017 expenditure plan of $8.0 million for the third
and final year of funding for the replacement of the
Adult Inmate Management System (AIMS) at ADC. The
Committee added a provision requiring ADC to submit
an expenditure plan if they spend more than $100,000
of the $1,307,400 contingency allocation.

Universities – Arizona Board of Regents – Review of FY
2017 Tuition Revenues – The Committee gave a
favorable review of the expenditure plan for tuition
revenue amounts greater than the amounts
appropriated by the Legislature and all nonappropriated tuition and fee revenue expenditures
for the current fiscal year. The Committee added a
provision requiring ABOR to report all tuition and fees
in future year reports. ABOR has been excluding
approximately $430 million in certain tuition and fees.

Department of Child Safety – Review of FY 2017 First
Quarter Benchmarks – The Committee gave a
favorable review of DCS' first quarter benchmark
report, which assessed the progress made in increasing
the department's number of FTE Positions and in
reducing the number of backlog cases.

Universities – Arizona Board of Regents – Review of
Qualifying College Credit Examinations – The
Committee gave a favorable review of ABOR's list of
qualifying examinations with passing scores that high
school students may take in order to receive college
credit from Arizona's public universities. Passing
scores on these examinations are eligible to receive
bonus funding under the College Credit by
Examination Incentive Program beginning in FY 2018.
The Committee added a provision requiring ADE to
submit a copy of this report to the JLBC for review
along with the amount of award funding received by
each school under the incentive program.

Department of Child Safety – Review of FY 2017 Third
Quarter Funding for New Case Aides and Overtime –
The Committee gave a favorable review of $765,200
for New Case Aides and $2,092,500 for Overtime in FY
2017 for third quarter funding. The remaining amounts
from the FY 2017 appropriation will be reviewed upon
further updates on the progress of reducing the
backlog of non-active cases.

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

JCCR Meeting
Arizona Department of Administration – Review of 1740
West Adams Renovation Plan – The Committee gave a
favorable review of the $3.7 million expenditure plan
and the tenant relocation plan that will relocate 27
state agencies from private office space and other
state-owned office space. This item was previously
held at the September 2016 meeting. The Committee
added a provision requiring ADOA to report to the
JLBC Staff on the agency space allocations and
project timeline by February 28, 2017. Another
provision was added to specify that this favorable
review does not constitute an endorsement of addition
funding to reconfigure 1740 W. Adams if the health
boards are consolidated.
Community Colleges – Pinal County District – Review of
Student Union and Science Building – The Committee
gave an unfavorable review of the District's $30.2
million bond project. The project is for the construction
of a new Science Building and a new Student Union
Building. It would be financed with a $30.6 revenue
bond issuance, which includes $30.2 million for
construction and $350,000 for issuance costs.
Department of Emergency and Military Affairs – Review
of Proposed Flagstaff Military Installation Fund Grant –
The Committee gave a favorable review of DEMA's
plan to expend $250,000 from the Military Installation
Fund for a grant to the City of Flagstaff in order to fund
a light mitigation system for the City's Public Works Core
Services Facility, which is located approximately 2.5
miles from the U.S. Naval Observatory – Flagstaff
Station.
Arizona State Lottery Commission – Review of FY 2017
Building Renewal Allocation Plan – The Committee
gave a favorable review of the Commission's FY 2017
Building Renewal Allocation Plan of $118,100. The
Committee added provisions requiring the Commission
to report any changes in the building renewal
spending plan to the JLBC Staff.
Arizona Department of Transportation – Review of
Vehicle Wash Systems Project – The Committee gave a
favorable review of the department's $2.5 million
expenditure plan for 6 new vehicle wash system
buildings. The cost projections are consistent with the
low bid and are within the proposed budget of the
project. The Committee added a provision requiring
ADOT to report any project reallocations above
$100,000. Another provision was added requiring
ADOT to submit to JLBC Staff by March 1, 2017 a costbenefit analysis of building and operating the 10
additional vehicle wash systems authorized by the
department's FY 2017 capital appropriation.

Arizona State Parks Board – Review of City of
Cottonwood Easement Agreement – The Committee
gave a favorable review of ASP's proposed easement
agreement with the City of Cottonwood at Dead
Horse Ranch State Park. ASP will provide to the city a
no cost easement to one of ASP's sewer lift stations in
exchange for the city assuming ownership of the lift
station and providing for all of its future operating and
maintenance costs.
Arizona State University – Review of Armstrong
Hall/Ross-Blakley Library Renovation Project Financing
– The Committee gave a favorable review of $26.0
million in system revenue bond issuances to fund
renovations of the Armstrong Hall and Ross-Blakley
Library buildings on the Tempe campus. The debt
service payments will be funded by tuition revenues.
The Committee added standard university financing
provisions.
Arizona State University – Review of Student Housing
Indirect Financing Project – The Committee gave a
favorable review of a 5-acre ground lease for the
approximately $72.0 million development of student
housing associated with fraternities and sororities at its
Tempe Campus. The proposed residences, known as
the "Greek Leadership Village," will provide
approximately 950 beds among 27 newlyconstructed townhouses. The Committee added
standard university financing provisions.
University of Arizona – Review of FY 2017 Capital
Improvement Plan for One-time Appropriation – The
Committee gave a favorable review of UA's $8.0
million expenditure plan for the renovation of and
capital equipment for a facility to be used by the
proposed veterinary school. The Committee added
a provision requiring UA to report to the Committee if
results of the current accreditation appeals process
affect the planned expenditures for renovation and
capital improvement. The Committee also added a
standard university provision.

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Summary of Recent Agency Reports
Arizona Department of Administration – Report on
Motor Vehicle Fleet – Pursuant to A.R.S. § 41-803R, the
Arizona Department of Administration reported on the
FY 2016 year-end inventory of state-owned alternative
fuel vehicles. Of the 12,709 state vehicles, 5,370 or
42.3% are subject to the alternative fuel vehicle
requirements. (Law enforcement and certain other
vehicles are exempt.)
Of the 5,370 state vehicles subject to the alternative
fuel vehicle requirements, 3,822, or 71.0% are
alternative fuel vehicles. This percentage is the same
as the prior year and exceeds the 40% target
established by statute. Statute also requires 90% of the
state vehicles in Maricopa County to be capable of
using alternative fuels. The state reports that 82.0% of
its Maricopa County vehicles are alternative fuel
vehicles. This is a decrease of (6.6)% from the prior
year.
A.R.S. § 41-803G additionally requires that 75% of new
vehicle purchases in Maricopa and Pima Counties be
capable of using alternative fuels for models year 2001
or later. Of the 109 eligible vehicles purchased in these
counties in 2016, 62.0% were capable of using
alternative fuels.
Notwithstanding the number of vehicles capable of
using alternative fuel, only 1.9% of the state fleet’s fuel
budget was spent on alternative fuels. (Rebecca
Perrera)
Arizona Department of Administration – Report on
Repayment of State Debt and Obligations – Pursuant
to A.R.S. § 41-726, the Arizona Department of
Administration (ADOA) is required to report on the
amount of potential savings if the state repays the
balance of any outstanding long-term General Fund
financing obligations, under the following repayment
scenarios: $50 million, $100 million, $150 million, and
$200 million. Under the 4 repayment scenarios, ADOA

reported the following net lifetime savings in debt
service payments:
•
$50 million repayment – $23.5 million
•
$100 million repayment – $46.3 million
•
$150 million repayment – $68.5 million
•
$200 million repayment – $88.9 million
(Josh Hope)
Department of Child Safety – Monthly Report on Hiring
– Pursuant to a FY 2017 General Appropriation Act
footnote, the Department of Child Safety (DCS) has
reported on its progress in hiring and retaining child
safety staff through November 2016. (See Table 6
below.)
The number of direct line child safety staff
(caseworkers, caseworkers in training, caseworkers
awaiting training and hotline staff) was 1,343 in
November 2016, or (63) fewer staff than the number
of funded positions. Most of the difference between
funded positions and filled positions was driven by
lower-than-budgeted staffing of caseworkers, which
was partly offset by higher-than-budgeted staff in
training. Total direct line staff increased by 2 since
October.
There were also 1,368 non-direct line child safety staff
in November 2016, or (143) fewer staff than the
funded staffing level. The budgeted staffing level is
1,511 excluding Attorney General positions. Total
non-direct line positions increased by 17 since
October. (Patrick Moran)
Department of Child Safety – Quarterly Report on
Foster Care and Medicaid – Pursuant to Laws 2013,
Chapter 220 as amended by Laws 2016, Chapter 273,
the Department of Child Safety (DCS) is required to
report on foster care and Medicaid eligibility. During
the first quarter of FY 2017, DCS reports the following
trends in foster care and Medicaid eligibility:

Table 6
DCS Filled FTE Positions as of November 2016
Caseworkers
Hotline Staff
Staff in Training
Subtotal - Direct Line
Subtotal - Non-Direct Line Staff
Grand Total 1/

____________
1/ Excludes 276.2 Attorney General Staff.

Funded
1,190
76
140
1,406
1,511
2,917

November
1,042
68
233
1,343
1,368
2,711

Difference
(148)
(8)
93
(63)
(143)
(206)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Summary of Recent Agency Reports (Continued)
1.

2.

3.

4.

There were 17,075 children eligible for Medicaid in
foster care at the end of the first quarter, down
(3.7)% from 17,712 at the end of the fourth quarter
of FY 2016.
The percentage of foster care children eligible for
Medicaid decreased from 96% at the end of the
fourth quarter of FY 2016 to 95% at the end of the
first quarter of FY 2017.
The amount of non-Medicaid expenditures for
behavioral health group homes, residential
treatment centers, and therapeutic group homes
used by DCS to supplement Medicaid behavioral
health placement services was $1.6 million in the
first quarter of FY 2017.
The amount of non-Medicaid behavioral health
counseling/psychiatric services expenditures used
by DCS to supplement Medicaid behavioral health
services was $104,439 in the first quarter of FY 2017.
(Patrick Moran)

Arizona Commerce Authority – Annual Report on
Arizona Competes Fund – Pursuant to A.R.S. § 411545.04, 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 average wages.
New FY 2016 Grants
In total, ACA awarded 17 grants from the Arizona
Competes Fund totaling $6.4 million in FY 2016.
ACA reports awarding 6 grants totaling $3.6 million for
the purpose of expanding or retaining business in
Arizona. The largest grant of $1.0 million was awarded
to Carlisle Companies Incorporated.
Each recipient agreed, as part of the granting process,
to meet certain metrics regarding job creation. The 6
recipients agree, over the next 3 years, to create a
collective total of 1,392 jobs, provide average annual
wages of $85,000, make a collective capital
investment of $76.2 million, and pay for at least 65% of
health insurance costs.
The remaining $2.8 million in new grants was awarded
as part of the Arizona Innovation Challenge (AIC)
grant program to 11 early-stage companies for the
purposes of funding the start-up costs of small
businesses. The 11 recipients agreed, over the next
year, to create a collective total of 38 jobs. As of June
30, 2016, the grantees had created 14 jobs and capital
investment of $46,400. The reported average wage of
the jobs created was $74,500 although information for

2 of the positions was not released due to confidentiality
concerns resulting from the low number of jobs created.
Unlike prior years, ACA did not award any grants in FY
2016 to support their Rural Economic Development
Grant (REDG) program which provides monies to local
governments and economic development entities.
ACA reports that the lack of awards was due to no
applications being submitted in FY 2016.
Prior-Year Grants
ACA awarded 13 grants from FY 2012 – FY 2015 totaling
$18.5 million for the purpose of expanding or retaining
business in Arizona. Through FY 2016, these grantees
created 2,489 jobs with average annual wages of
$71,800 and capital investment of $177.1 million. This
compares to commitments of 6,214 jobs created,
average annual wages of $65,000, and capital
investment of $133.7 million. The grantees have 3 years
to reach the agreed upon metrics. Grantees that did
not perform the agreed upon metrics were only funded
for the job creation and capital investments that were
completed.
From FY 2012 – FY 2015, ACA made 66 REDG and AIC
grants for the purpose of supporting rural and small
businesses totaling $17.0 million. As of June 30, 2016,
these grantees created 1,446 jobs and $152.8 million in
capital investment compared to commitments of 2,889
jobs and $383.8 million in capital investment. These
grantees also created an additional $7.5 million in
capital investment that was not subject to a contractual
commitment. The average wage of the jobs created
was $39,600.
Fund Status
The Arizona Competes Fund received an annual $21.5
million deposit of income tax withholding monies and
$3.5 million in state lottery revenues from FY 2012 – FY
2015. Laws 2015, Chapter 12 reduced the General Fund
deposit to $16.5 million in FY 2016 and $11.5 million in FY
2017 and each year thereafter. The monies are used to
retain, attract, and expand businesses in Arizona
through the provision of grants and loans. As of June 30,
2016, the Arizona Competes Fund had a balance of
$27.0 million. The FY 2016 General Appropriation Act
(Laws 2015, Chapter 8) swept $75.0 million from the
Arizona Competes Fund in FY 2016. (Eric Billings)
Arizona Community Colleges – Annual Report – Pursuant
to A.R.S. § 15-1427, the Arizona Community Colleges are
required to report by December 1 of each year on their
progress during the previous year. They have just
submitted their FY 2016 report, which includes the
following summary information on the state system:

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

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

292,812 students (headcount) were enrolled for
credit, resulting in a Full-Time Student Equivalent
count of 116,546.
92.0% of enrolled students resided within the
district, while 8.0% did not reside within the district.
Total number of instructors employed was 10,298,
of which 2,532 (24.6%) were full-time and 7,766
(75.4%) were part-time.
Total operating revenues were $1.6 billion (this
amount excludes bond proceeds and fund
balance which total $110.4 million).
Total expenditures were $1.7 billion. (Steve
Schimpp)

Arizona Community Colleges – Report on Workforce
Development Expenditures – Arizona Community
Colleges recently reported their Proposition 301
workforce development expenditures for FY 2015 and
FY 2016 pursuant to A.R.S. § 15-1472. Total reported
expenditures were $15.5 million for FY 2015 and $16.0
million for FY 2016, which were used for workforce
development and job training. Total reported
revenues were $16.8 million for FY 2015 and $17.4
million for FY 2016. Unspent revenues were carried
forward to the next fiscal year. (Steve Schimpp)
County Attorneys – Report on Deferred Prosecution –
Pursuant to A.R.S. § 11-362, each county attorney that
oversees an established Deferred Prosecution Program
shall submit an annual evaluation of their respective
program that includes the following metrics:
•
•
•

The number of persons who were enrolled in
deferred prosecution programs during the previous
fiscal year.
The number of persons who successfully
completed deferred prosecution programs during
the previous fiscal year.
If available, the number of persons who were
enrolled in deferred prosecution programs during
the previous fiscal year and who were
subsequently convicted of a new felony offense.

Ten counties submitted reports which indicated a total
of at least 4,466 individuals were placed in a deferred
prosecution program in FY 2016. This was one more
county, but (2,078) fewer individuals, than in FY 2015.
Of these individuals and those already enrolled, 3,443
successfully completed the program during FY 2016, a
decline of (1,386) individuals from FY 2015. No
counties submitted information on the number of
participants in FY 2015 that were subsequently
convicted of a new felony offense.
Deferred prosecution allows individuals who commit
non-dangerous, non-serious crimes to avoid

prosecution through the completion of a program that
may involve restitution, community service, substance
abuse treatment, counseling, or other means by which
the individual can make amends for their crime. After
the completion of the program, the charges are
dismissed. (Eric Billings)
Administrative Office of the Courts – Report on
Dependency Surge – The FY 2017 budget included a
$3.0 million, one-time, General Fund appropriation for
distribution by the Administrative Office of the Courts
(AOC) to the Superior Courts to help with the processing
of dependency cases. Pursuant to a footnote in the FY
2017 General Appropriation Act (Laws 2016, Chapter
117), AOC is required to report on the amounts
allocated to each Superior Court and the purposes for
which those monies will be expended. AOC allocated
the funding proportionate to the amount of children
with an open dependency case petition as of January
1, 2016. The expenditure plan AOC provided would
allocate monies to 13 of Arizona's Superior Courts as
follows:
Apache - $12,200
Cochise - $41,100
Coconino - $22,500
Gila - $19,000
Graham - $14,200
Maricopa - $1,904,100
Mohave - $99,100

Navajo - $23,800
Pima - $531,700
Pinal - $177,800
Santa Cruz - $9,100
Yavapai - $64,900
Yuma - $69,400

Greenlee and La Paz Superior Courts rejected the
$11,200 total that AOC offered to them due to their low
dependency caseload and the minimal amount of
funding allocated to them. AOC has indicated that
they intend to distribute the remaining $11,200 in
funding to other counties at a later time.
The distributed monies will be used to increase
mediation and family support services, enhance case
flow management through improvements in processing
and additional staff, hire additional commissioners and
interpreters, purchase courtroom equipment to
facilitate hearings, and expand dependency court
operations. The monies will be spent over 2 years, FY
2017 and FY 2018. (Eric Billings)
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 2016, CJEF
revenues totaled $38.8 million, a 6.7% increase from FY
2015. Total funds available for the fiscal year, including

12

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Summary of Recent Agency Reports (Continued)
the beginning balance and adjustments, was $62.4
million. FY 2016 CJEF expenditures totaled $37.8 million.
(Josh Hope)
Office of Economic Opportunity – 2015/2016 Annual
Report – Pursuant to A.R.S. § 41-5401, the Office of
Economic Opportunity's Workforce Arizona Council
(WAC) has submitted its annual report on workforce
development. The report divides the state's workforce
training programs into 5 categories:
1)
2)
3)

4)
5)

Adult, Youth and Dislocated Workers – professional
training and career services that prepare
individuals for entry into the workforce.
Adult Education and Literacy – services to help
adults become literate and obtain knowledge
and skills necessary for employment and life.
Public Employment Offices – a network of public
employment offices that provide job placement
services for job seekers and labor recruitment
services for employers.
Vocational Rehabilitation – provides individuals
with disabilities with services that help them
become prepared for employment.
Community Colleges – classes and training
provided at Community Colleges that target
specific industries and skill sets.

The total workforce spending from state, federal, and
local sources for FY 2015 was at least $324 million. Of
this total, the Community Colleges accounted for $194
million and the Department of Economic Security,
Department of Education, and Governor's Office
accounted for $130 million combined. Excluding the
community colleges, the largest programs in FY 2015
included Vocational Rehabilitation ($59.3 million),
Adult, Youth and Dislocated Workers ($41.5 million),
Adult Education and Literacy ($15.8 million), and Public
Employment Offices (at least $13.3 million). These
expenditures allowed for the provision of services to a
total of at least 175,371 individuals in FY 2015 at a cost
of at least $1,800 per individual. (Eric Billings)
Department of Economic Security – Report on
Domestic Violence – Pursuant to an FY 2016 General
Appropriation Act footnote, the Department of
Economic Security has reported the amount of state
and federal monies available for domestic violence
funding in FY 2016. Six agencies spent a total of $27.3
million in domestic violence funding, a 12.4% increase
in spending from FY 2015. The extra funding is due
almost entirely to a $2.8 million increase in Federal
Funds to these agencies. (Chris Gustafson)
Department of Education – Override Report – Pursuant
to A.R.S. § 15-249.04, the Arizona Department of

Education (ADE) recently reported FY 2017 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 93 districts statewide have
Maintenance and Operation (M&O) overrides pursuant
to A.R.S. § 15-481 in FY 2017, 3 have “Special Program”
overrides pursuant to A.R.S. § 15-482, and 22 have
“District Additional Assistance” overrides pursuant to
A.R.S. § 15-481. The total amounts budgeted for
overrides for FY 2017 include $466.9 million for both types
of M&O overrides combined and $75.0 million for District
Additional Assistance overrides. (Steve Schimpp)
Board of Executive Clemency - Report on FY 2016
Caseload - Pursuant to a footnote in the FY 2017
General Appropriation Act, the board is required to
submit a report on its FY 2016 caseload by November 1,
2016.
The board conducted 4,125 case hearings in FY 2015, as
described below:
•

•
•

•
•

•

•

Phases 1 and 2 Commutation (501): After reviewing
an inmate’s request to have their sentence
commuted, the board can decide to deny the
request or allow the request to move to a Phase 2
Commutation hearing.
Pardon (19): The board may recommend that the
Governor pardon an offender.
Absolute Discharge (7): The board can discharge a
person from imprisonment or parole supervision prior
to the sentence expiration date or prior to the
expiration of parole.
Modification (8): The board can recommend to the
Governor that an inmate’s sentence be modified or
commuted.
Reprieve (0): The board can make a
recommendation to the Governor to delay or
temporarily suspend the carrying out of an inmate’s
punishment.
Parole (397): These hearings only apply to offenders
sentenced prior to 1994. The board may place
these offenders on parole or deny their application
for parole and return them to the Department of
Corrections.
Violator (3,241): These hearings are conducted
when an offender has violated the terms of
community supervision. (Micaela Larkin)

Commission for Postsecondary Education – Report on
Postsecondary Education Grant Program – A.R.S. § 151855 requires the Commission for Postsecondary
Education (ACPE) to report annually on its
Postsecondary Education Grant (PEG) program.

13

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Summary of Recent Agency Reports (Continued)
The PEG program provides grants to students
attending private postsecondary institutions. The
program was launched in March 2007 and received
funding through FY 2010. In FY 2010, a total of $2.2
million was disbursed to 1,400 grantees representing 20
private postsecondary schools. Funding was
eliminated after FY 2010 and the program continues to
be suspended.
Since its inception, 4,475 students received a PEG loan.
Of those recipients, 3,163 have already graduated
with a baccalaureate degree. The remaining
recipients are either currently enrolled and working on
completing their degree or not enrolled or attending
the last institution on file at the time of their last grant
award.
The FY 2016 Higher Education Budget Reconciliation Bill
(BRB) (Laws 2015, Chapter 16), allows the commission
to contract with a third-party vendor to collect
outstanding PEG debt. The BRB also allows the
commission to use Postsecondary Education Student
Financial Assistance funds to administer PEG
collections. The commission has begun a PEG
repayment program for those who do not meet loan
forgiveness requirements and is currently researching
third-party vendors to collect outstanding PEG debt.
(Morgan Dorcheus)
Commission for Postsecondary Education – Report on
Math, Science, and Special Education Teacher Loan
Forgiveness Program – A.R.S. § 15-1782 requires the
Commission for Postsecondary Education to report
annually on its Math, Science, and Special Education
Teacher Loan Forgiveness (MSSE) program.
The MSSE program provides forgivable loans to eligible
students attending any regionally or nationally
accredited institution in Arizona (public or private) that
agree to a service commitment to teach in an Arizona
public K-12 school. The program was created in 2007.
In FY 2016, the MSSE program had 49 applicants and
disbursed 26 loans. This total includes 13 new loans
and 13 renewals. The total disbursement was $163,600.
Of the 26 recipients, 4 are studying mathematics, 1 is
studying science, 19 are studying special education,
and 2 are studying elementary education. Six
recipients attend private postsecondary institutions
and 20 attend public universities.
The commission is responsible for collecting retention
data for loan recipients. At the conclusion of FY 2016,
275 students have participated in the MSSE program.
Of those, 26 are still enrolled in a postsecondary
institution, 14 are in the 12-month grace period, 22 are

teaching in a public K-12 school in Arizona, 115 had
their loan forgiven for completing their teaching service,
41 are in repayment, 10 have paid their loan balance in
full, 16 have had their loans referred to the Attorney
General, and 31 have completed the retention tracking
cycle. (Morgan Dorcheus)
Secretary of State – Report on Presidential Preference
Election Reimbursement - Presidential Preference
Elections (PPE) require a separate ballot for each
recognized political party and no other election can
appear on the ballot. Laws 2015, Chapter 12 returned
the reimbursement rate to $1.25 per active registered
voter, the rate established in statute prior to 2012.
For FY 2016, the Legislature elected to provide a onetime appropriation in FY 2017 to counties at a higher
reimbursement rate than $1.25. Beyond the estimated
$2,607,300 remaining in the Secretary of State (SOS)
base FY 2016 election budget for the PPE, the
Legislature appropriated an additional $6,130,000 for
the PPE election in FY 2016. Counties were to receive
the lesser of the county's estimated cost for the election
or the amount calculated based on active registered
voters as of January 1, 2016: $2.50 per voter for counties
with more than 450,000 active voters, $3.00 per voter for
counties with between 35,000 and 450,000 active voters,
or $3.50 per voter for counties with less than 35,000
active voters. The reimbursement amounts for
Coconino, Gila, La Paz, Mohave and Pima Counties
were based on the calculation of active voters, but the
remaining counties had a reimbursement based on their
estimated costs. As required by Laws 2016, Chapter
117, Section 125, on or before October 1, 2016 the SOS
was to report the reimbursements made pursuant to this
section.
The total maximum reimbursement cost has been
determined to be $8,816,913, including $736,600 in SOS
costs. Of this amount, the SOS indicated so far
reimbursement requests have totaled $5,774,907. The
SOS reimbursed $5,649,527 for the PPE as of December
2016.
Of this amount, reimbursements were allocated for the
following uses:
•
•
•
•
•
•
•
•
•
•

Early Ballots – $2,890,151
Personnel – $1,354,412
Official Ballots – $724,614
Postage – $193,544
Sample Ballots – $135,410
Equipment – $82,524
Miscellaneous Items – $79,336
Outreach – $74,409
Supplies – $61,555
SOS Agency Costs – $53,472

14

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Summary of Recent Agency Reports (Continued)
SOS is still seeking information to verify the remaining
reimbursements, and any further reimbursement
activity will be reported to the JLBC and OSPB Staff.
(Micaela Larkin)
Universities – Arizona Board of Regents – Report on
University System’s Financial Aid – Pursuant to A.R.S. §
15-1650, the Arizona Board of Regents has submitted its
annual report on financial aid. Highlights from the FY
2016 report include:
•
•

Approximately $2.4 billion in total financial aid was
provided to students.
Of this amount, $1.05 billion (43.7%) came from
federal sources, $808.1 million (33.7%) came from
tuition and other sources, $539.2 million (22.5%)
came from private sources and the Arizona
Financial Aid Trust (AFAT) (AFAT distributed $20.3
million of both state General Fund and institutional

monies in FY 2016), and $951,700 (0.04%) came from
state scholarships, grants and loans.
A total of 150,478 students received aid, including
122,694 undergraduate students and 27,784
graduate students.
Of the undergraduate students receiving aid, 30,750
received non-need-based gift aid, 65,487 received
need-based gift aid, and 54,203 were awarded
miscellaneous types of non-gift aid (i.e. work study).
Some students received multiple types of aid.
The average aid package for undergraduate
students was $12,076, which includes both need
and non-need-based aid.
58.3% of undergraduate students and 52.7% of
graduate students have debt. Of those students
with debt, the average undergraduate student
debt was $23,684 upon graduation, while the
average graduate student debt was $49,430. (Matt
Beienburg)

•
•

•
•

November Spending
November 2016 General Fund spending was $564.8
million, which represents a decrease of $(18.3) million
below November 2015. (See Tables 7 & 8). Year-todate, General Fund spending is $4.90 billion, or
$(298.2) million below the prior year.
•

Year-to-date, Department of Education spending
has increased by $33.8 million, due to increased
enrollment and inflation funding.

•

Prior to FY 2017, DHS used to administer the state’s
Medicaid Behavioral Health program. Beginning in
FY 2017, this responsibility has been shifted to

AHCCCS. Due to this shift, DHS will no longer be
making its beginning of the year Medicaid
transfer, causing DHS spending to decline by
$(461.1) million year-to-date compared to FY 2016.
•

The decline in Universities' spending year-to-date is
a technical timing issue relating to the distribution
of funds to the University system. Excluding
additional monies for the rollover repayment
(which occurred at the end of FY 2016), the
Universities received a net increase in funding for
FY 2017.

Table 7
General Fund Spending ($ in Millions)
Change From

YTD Change

Nov 16

Nov 15

Year-to-Date

from FY 16

AHCCCS

115.6

43.1

711.2

212.3

Corrections

80.2

1.9

440.1

(14.6)

Child Safety

12.6

(56.6)

149.2

(53.1)

Economic Security

6.4

(5.6)

462.2

61.9

249.8

(9.6)

2,233.3

33.8

Health Serv ices

7.5

(11.7)

41.2

(461.1)

Public Safety

2.4

0.8

42.8

4.5

School Facilities Board

0.1

(0.0)

170.9

9.1

Univ ersities

58.4

16.7

284.4

(110.5)

Leaseback Debt Serv ice

0.0

0.0

84.1

0.0

Other

31.8

2.7

278.9

19.5

Total

564.8

(18.3)

4,898.3

(298.2)

Agency

Education

15

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Table 8

General Fund Spending
($ in Thousands)
Agency
Dept. of Admin./Automation Projects Fund
ADOA – Sale/Leaseback Debt Service
Office of Administrative Hearings
Commission of African-American Affairs
Department of Agriculture
AHCCCS
Attorney General
State Board of Charter Schools
Department of Child Safety
AZ Commerce Authority
Community Colleges
Corporation Commission
Department of Corrections
County Funding
AZ State Schools for the Deaf & Blind
Office of Economic Opportunity
Department of Economic Security
State Board of Education
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
Department of Forestry and Fire Management
Department of Gaming
Arizona Geological Survey
Governor/OSPB
Department of Health Services
Arizona Historical Society
Prescott Historical Society of AZ
Department of Housing
Independent Redistricting Comm.
Department of Insurance
Judiciary
Supreme/Superior Court
Court of Appeals
Department of Juvenile Corrections

Nov 16

Change from
Nov 15

Year-to-Date

YTD Change
from FY 16

1,501.3
65.9
9.2
1,047.4
115,601.1
1,593.0
143.5

100.2
(5.3)
2.3
580.6
43,083.2
12.9
66.8

19,948.6
84,117.4
390.8
49.8
4,209.3
711,182.4
9,823.4
451.5

9,107.2
2.8
5.4
3.7
534.4
212,290.8
1,069.8
(31.8)

12,604.7
1,791.7
908.7
293.2
80,152.1
752.0
50.9
6,423.2
123.3
249,754.7
570.9
18.1
34.9
48.9
201.9
1.2
325.6
1,388.4
7,514.8
203.1
59.0
69.8
169.2
649.6

(56,626.6)
(416.6)
656.4
270.6
1,936.8
(6,000.5)
(276.7)
50.9
(5,598.5)
18.3
(9,631.6)
220.4
(0.2)
(12.6)
(9.0)
(16.4)
(120.4)
53.5
(83.4)
793.5
(11,729.7)
(5.7)
3.5
69.8
2.1
325.2

149,207.9
9,033.5
26,257.5
488.3
440,070.2
14,000.5
11,253.8
50.9
462,152.5
445.0
2,233,349.6
3,785.8
2,823.6
88.2
336.0
263.2
1,246.9
(2.4)
2,884.4
1,779.5
4,312.1
41,184.8
1,505.2
346.6
391.3
559.5
2,176.3

(53,087.6)
(2,008.0)
551.9
249.4
(14,624.9)
8,000.0
(1,561.2)
50.9
61,854.8
(66.9)
33,827.5
74.6
2,823.6
20.5
28.9
(168.2)
(71.7)
(880.9)
503.5
(14.9)
(366.8)
491.3
(461,053.3)
(154.8)
(27.8)
391.3
112.8
(134.7)

1,651.4
1,020.3
2,401.2

(436.1)
(51.9)
751.3

44,796.0
5,933.6
11,486.3

2,022.5
(182.4)
(782.1)

16

JLBC – MONTHLY FISCAL HIGHLIGHTS – DECEMBER 2016

Table 8 (Continued)

Agency
State Land Department
Legislature
Auditor General
House of Representatives
Joint Legislative Budget Comm.
Legislative Council
Senate
Mine Inspector
Nav. Streams & Adjudication
Occupational Safety and Health Review
Arizona State Parks Board
Phoenix Convention Center
Comm. for Postsecondary Ed.
Department of Public Safety
Public Safety Personnel Retirement System
Radiation Regulatory Agency
Real Estate Department
Department of Revenue
School Facilities Board
Secretary of State
Tax Appeals Board
Office of Tourism
Department of Transportation
Governor's Office on Tribal Relations
Universities
Board of Regents
Arizona State University
Northern Arizona University
University of Arizona
Department of Veteran Services
Department of Water Resources
Water Infrastructure Finance Authority
Department of Weights & Measures
Other - JP Salaries Distribution
Other
Total

Nov 16

Change from
Nov 15

Year-to-Date

YTD Change
from FY 16

1,185.5

(629.8)

4,857.4

(207.2)

1,801.0
925.4
154.6
882.7
598.9
72.3
8.9
2,384.8
88.1
149.5
1,869.5
84.2
1,204.1
21.8
3,129.4
1,500.0
2.2

(140.2)
5.7
(26.5)
414.3
79.3
5.1
1.6
(2.5)
750.2
29.0
(30.6)
1,737.1
(6.9)
330.8
4.9
3,129.4
1,500.0
(0.0)

8,426.3
5,153.4
995.7
2,830.4
3,586.4
507.3
61.3
20,449.0
696.3
42,767.5
6,000.0
923.8
1,245.3
13,886.0
170,914.9
13,724.9
134.3
4,907.0
1,500.7
30.1

(130.0)
(603.7)
19.5
44.9
456.7
(2.3)
7.1
(1.6)
(275.3)
(2.1)
4,548.8
108.6
61.6
(10,351.0)
9,122.8
9,105.4
6.2
(70.3)
1,500.7
12.6

3,937.9
24,676.2
8,436.3
21,311.5
465.0
765.4
42.6
564,842.0

(1,193.5)
8,048.6
2,609.4
7,231.3
43.6
(8.6)
(159.5)
(24.2)
(18,324.8)

12,378.0
123,381.0
42,132.3
106,557.7
2,458.2
4,467.8
500.0
378.0
37.0
4,898,267.9

129.8
(50,332.2)
(17,496.9)
(42,773.4)
252.3
53.6
500.0
(539.6)
(125.9)
(6.2)
(298,187.8)

JLBC
Jul-15

3

JLBC
Jul 14
Jul 15
Jul 16

Jan 16

35,000

Jan 15

8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%

Jul 13

Jul 16

Jan 16

Jul 15

Jan 15

Jul 14

Jan 14

2,200

Jul 13

Jan 13

Jul 12

Jan 12

Jul 11

Jan 11

Jul 10

Jan 10

Jul 09

Jan 09

Jul 08

Jan 08

Jul 07

Jan 07

Jul 06

Jan 06

Jul 05

Jan 05

Jul 04

Jan 04

Jul 03

Jan 03

Jul 02

Jan 02

Jul 01

Jan 01

Thousands of Jobs
2,300

Jan 14

Year Over Year Growth (%)

2,400

Jan 13

Jul 12

Jan 12

Jul 11

Jan 11

Jul 10

Jan 10

Jul 09

Jan 09

Jul 08

Jan 08

Jul 07

Jan 07

Jul 06

Jan 06

Jul 05

5.3% Y/Y Growth
(October 2016)

Jan 05

$19

Jul 04

$20

Jan 04

$26

Jul 03

Average Hourly Earnings – Private Sector
Jan 01
Jul 01
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Jul 07
Jan 08
Jul 08
Jan 09
Jul 09
Jan 10
Jul 10
Jan 11
Jul 11
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16

JLBC

Jan 03

$24.55 / Hour
(October 2016)

Total Monthly Claims for UI Benefits

Jul-16

Jan-16

Jul-15

Jan-15

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

1

Jul 02

Jan 11
July 11

2……Total Non-Farm Employment
3……Average Hourly Earnings – Private Sector
4……Initial Claims for Unemployment Insurance
5……State Sales Tax Collections – Retail Category
6……State Sales Tax Collections – Contracting
Category
7……Residential Building Permits
8……Economic Activity Index

Jan 02

Jan 10
July 10

December 2016
Appendix A

Jul 01

Jan 01

Jul-16

12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%

Jan-16

Jan 09
July 09

$21

Jan-15

Jan 08
July 08

$22

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 07
July 07

$ / Hour

Page:

Jan 10

July 09

Jan 09

July 08

Jan 08

July 07

Jan 07

Year Over Year Growth (%)

Arizona Economic Trends

Total Non-Farm Employment

2,800

2,700

2,600

2,500

$22.73 / Hour
(Octoberjobs
2014)
2,746,900
(November 2016)

2,100

1.1% Y/Y Growth
(November 2016)

2

$25

Initial Claims for Unemployment Insurance

$24

$23

45,000

40,000

30,000

17,773 Claims
(October 2016)

25,000

20,000

15,000

10,000

5,000

Not seasonally adjusted

4

JLBC
12-Month Moving Sum

0

7

JLBC
Jul 09

Jul 12

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 16

Jan 16

Jul 15

Jan 15

Jul 14

Jan 14

Jul 16

Jan 16

Jul 15

Jan 15

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

Jan 08

July 07

Jan 07

July 06

Year Over Year Growth (%)

Jul 16

Jul 14

Jul 16

Jan 16

Jul 15

Jan 15

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 11

July 10

Jan 10

July 09

Jan 09

July 08

Jan 08

July 07

Jan 07

July 06

Jul 16

Jan 16

Jul 15

Jan 15

$ in Millions
$50

Jul 13

Jan 13

230

Jan 12

Jul 11

Jan 11

Jul 10

140

Jan 10

150

10,000

Jul 08

20,000

Jan 09

30,000

Jul 07

40,000

Jan 08

Single Family Unit - 23,964 Permits
Multi-Family Unit - 10,153 Permits
(Oct. 2016)

Jul 06

70,000

Jan 07

90,000

Jul 05

100,000

Jan 06

Residential Building Permits

Jan 05

80,000

JLBC

Jul 04

5

Jul 03

Jul 15
Jan 16

1.8% Y/Y Growth
(November 2016)
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%

Jan 04

Jul 14
Jan 15

* Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

$100

Jul 02

Jul 13

Jan 11
July 11

$184.3 million
(November 2016)

Jan 03

50,000
Jan 13

Jan 10
July 10

$150

Jul 01

60,000
Jul 12

Jan 12

July 11

Jan 11

July 10

July 09

Jan 09

July 08

Jan 08

July 07

Jan 07

July 06

$ in Millions
$175

Jan 02

* January 2014 estimate adjusted downward by $30 million to reflect onetime category shift.

Coincident Index Value

Excludes temporary 1 ¢ sales tax
Jan 10

July 09

Jan 09

July 08

Jan 08

July 07

20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
* Jan 14

JLBC
Jan 07

July 06

Year Over Year Growth (%)
$125

Jan 01

Jan 01
Jul 01
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Jul 07
Jan 08
Jul 08
Jan 09
Jul 09
Jan 10
Jul 10
Jan 11
Jul 11
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16

Building Permits

State Sales Tax Collections – Retail Category
State Sales Tax Collections – Contracting Category

$225
$100

$200
$75

$37.0 million
(November 2016)

$25

$0

(0.4)% Y/Y Growth
(November 2016)

Excludes temporary 1 ¢ sales tax

6

Economic Activity Index

240

220

223.2 Index Value
(October 2016)

210

200

190

180

170

160

8