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

www.azleg.gov/jlbc.htm

" Year-todate…
General Fund
revenues are
3.4% above
the prior year

March 2017

Summary
February 2017 revenues totaled $406.6 million,
which represents an increase of 2.2% above
the prior year. Collections for the month were
$7.8 million above the Baseline forecast.

In comparison to February revenue collections
of $406.6 million, February 2017 spending was
$603.6 million, which is an increase of $77.5
million from the prior year.

February marks the beginning of substantial
processing during the state's tax filing season.
February results typically show significant
volatility from year-to-year, as the timing of
processing tax returns and refunds can have a
significant impact on the level of collections
for the month. This February, however, showed
only a modest change from the prior year.

Fiscal year-to-date, General Fund revenues of
$5.88 billion have been offset by $6.91 billion of
expenditures.

February's modest revenue growth was due to
mixed results across categories. Of the state's
larger revenue categories, Individual and
Corporate Income Taxes declined by $(11.1)
million and $(14.6) million, respectively
compared to the prior year.

The operating fund balance consists of the
General Fund and certain dedicated funds.
The operating balance as of mid-February 2017
is $1.82 billion, while the state's Budget
Stabilization Fund has a current balance $458.0
million.

These declines were offset by growth in the
Sales Tax category, along with gains from
Lottery revenues and other miscellaneous
state revenues.
Year-to-date, excluding Urban Revenue
Sharing and one-time fund transfers, General
Fund revenues are 3.4% above the prior year
and are $5.7 million above forecast.

and are $5.7
million above
forecast.”

Table of Contents
Summary

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
March 20, 2017.

February Revenues ................................................ 2

• ADE – Budget Status Report .............................. 8

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

• DEQ – E-licensing Third Party Report................ 8

Summary of Recent Agency Reports

• Supreme Court – State Aid to Courts .............. 9

• AHCCCS – Inpatient Psychiatric Treament .... 7

February Spending ................................................. 9

• AHCCCS – Health Insurer Fee ........................... 7

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

• DCS – Foster Care and Medicaid Report....... 7
• DCS – Monthly Hiring Report ............................. 8

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

February Revenues
Table 1

General Fund Revenues ($ in Millions)

February
Year-to-Date

FY 2017
Collections
$ 406.6
$ 5,885.0

Sales Tax (preliminary) collections of $351.2 million were
3.9% above February of last year and $(1.0) million below
the forecast for the month. February tax collections
reflect sales activities that occurred in January. Year-todate, collections are up by 3.5%.
Sales tax collections by category for February were not
available as of the Monthly Fiscal Highlights publication
date. The most recent data available, which is for
January collections, is shown in Table 2 below. The 5
major categories of the state’s sales tax shown in the
table account for approximately 90% of total collections.
Table 2

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Use
Restaurant & Bar
Utilities

January
5.3%
11.6%
25.8%
8.6%
(7.1)%

YTD
3.8%
5.3%
3.8%
7.5%
(0.6)%

Individual Income Tax net revenues of $66.4 million in
February were $(11.1) million less than the prior year and
were $10.2 million above forecast. Year-to-date,
revenue has grown 6.5% over the prior year and is $30.2
million above forecast.
As indicated in Table 3 February withholding decreased
by (4.1)% from last year, but was $2.5 million above the
forecast. The large monthly decrease was primarily
driven by differences in the number of processing days in
February 2017 compared to February 2016.
Year-to-date withholding collections are 6.5% 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.
February estimated and final payments of $21.2 million
were (16.5)% below last year. Year to date, payments
have decreased (0.5)% compared to FY 2016 and are
$1.8 million above the forecast.

Difference From
Baseline Forecast
$
7.8
$
5.7

Difference
From FY 2016
$
8.6
$
93.6

February Individual Income Tax refunds totaled $(277.3)
million – this compares to $(284.4) million in February
2016 and a forecasted amount of $(290.5) million. Yearto-date refunds have led to a $15.6 million increase
compared to the enacted forecast.
Table 3

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated/Final Payments
Refunds

February
(4.1)%
(16.5)%
(2.5)%

YTD
6.5%
(0.5)%
(2.3)%

Corporate Income Tax net collections were $(2.3) million
in February. Collections are negative when refunds
exceed payments. The February results were $(14.6)
million less than in the prior year. Year to date,
collections are $(116.6) 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 $10.0 million in
February were $7.9 million above the prior year. Yearto-date, collections are 13.3% above last year and $1.8
million above the forecast.
The Lottery Commission reports that January ticket sales
were $72.9 million, which is $(65.5) million, or (47.3)%,
below sales in January 2016. The decrease reflects the
one-time nature of January 2016 ticket sales associated
with a record-breaking $1.4 billion Powerball jackpot.
Year-to-date ticket sales are $458.2 million, which is
(11.6)% below last year’s sales. In terms of General Fund
collections, year-to-date lottery revenues through
February are $3.2 million above the forecast.
Highway User Revenue Fund (HURF) collections of $115.7
million in February were up 1.7% compared to February
of last year and were $(3.2) million below forecast. Yearto-date collections are 3.8% above last year.
Due to delays in reporting final January revenues for
various revenues sources, DOR has made technical
adjustments to prior month collection figures. For
February, DOR has increased the amount of prior
General Fund revenue collections by $1.5 million, and
the adjustment has been included in the reported yearto-date results.

3
Table 4

General Fund Revenue:

Change from Previous Year and Budget Forecast
February 2017
Current Month

FY 2017 YTD (Eight Months)

Change From
Actual

February 2016

February 2017

Amount

Change from
Baseline Forecast

Percent

Amount

Actual

Percent

February 2016

February 2017

Amount

Baseline Forecast

Percent

Amount

Percent

Taxes
Sales and Use
Income - Individual
- Corporate

$351,241,547

$13,315,433

66,442,626

(11,079,350)

(2,349,691)

(14,610,094)

3.9 %
(14.3)

10,170,201

$101,385,084

2,783,694,248

171,081,768

3.5 %

$9,882,732

0.3 %

6.5

30,235,261

1.1

174,160,977

(116,578,461)

(40.1)

(33,345,666)

(16.1)

913,080

303.4

301,852

33.1

20,825,769

(2,760,728)

(11.7)

(225,991)

(1.1)

Luxury - Tobacco

1,965,000

141,725

7.8

0

0.0

15,189,604

(760,622)

(4.8)

(249,149)

(1.6)

2,947,698

(329,234)

0

0.0

23,113,790

1,253,199

5.7

729,249

3.3

218,691,021

25,604,236

13.3

1,758,924

0.8

(2,730,437)

(66.4)

(2,045,569)

Insurance Premium
Other Taxes
Sub-Total Taxes

9,962,221

--

$2,957,975,411

1,214,024

(10.0)

(4,812,255)

(0.3) %
18.1

Property
- Liquor

--

($1,028,804)

7,894,960

381.9

5,332,075

115.2

25,526

(1,368,437)

(98.2)

(1,849,927)

(98.6)

$431,448,951

($5,121,917)

(1.2) %

$8,113,142

--

3,236,977
635,142

1.9 %

1,383,841

2.9 %

$6,739,792

(59.6)

$6,195,034,663

$176,494,039

0.1 %

21.9

44,736,343

17,191,893

62.4

3,236,977

7.8

34.0

24,980,712

5,245,632

26.6

2,208,585

9.7

Other Revenue
Lottery
License, Fees and Permits
Interest

17,992,300

17,992,300

2,503,164

177,642

2,582

(177)

7.6
(6.4)

Sales and Services

10,992,636

10,056,531

--

Other Miscellaneous

(1,483,370)

(3,844,026)

--

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

0
431,163

0
(625,872)

--

(1,093)
458,011
(2,705,358)
0

(59.2)

(1,924,109)
($300,429)

$30,438,474

$23,756,399

355.5 %

$461,887,425

$18,634,481

4.2 %

$7,812,713

(29.7)
4.3
--

96,640

83,247

621.6

(81,436)

21,875,027

11,357,120

108.0

(431,111)

(1.9)

(3,569,449)

(15.6)

19,329,677

--

0

(81.7)

20,123,346

(909,382)
0
(2,475,488)

(4.5)
-(11.0)

0
(2,434,582)

(45.7)

-(10.8)

(1.0) %

$131,141,745

$30,493,022

30.3 %

($1,071,015)

(0.8) %

1.7 %

$6,326,176,407

$206,987,061

3.4 %

$5,668,776

0.1 %

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

(55,298,514)
0
(55,298,514)

0

(0.0)

(5,168,200) (100.0)

(4,828,986)

9.6

0

--

(9,997,186)

22.1 %

0

(0.0) %

(442,388,112)
1,191,548
(441,196,564)

(38,631,890)
(74,752,352)

9.6
(98.4)

(0)

0.0

0

0.0

(113,384,242)

34.6 %

0

0.0 %

$406,588,911

$8,637,295

2.2 %

$7,812,713

2.0 %

$5,884,979,843

$93,602,819

1.6 %

$5,668,777

0.1 %

$115,726,647

$1,940,223

1.7 %

($3,184,068)

(2.7) %

$923,538,644

$33,612,818

3.8 %

($4,142,655)

(0.4) %

Non-General Funds
Highway User Revenue Fund

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

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 1.9% in the
fourth quarter of 2016. This estimate reflects a slowdown
from the strong growth of 3.5% experienced in the prior
quarter. The slowdown relative to the prior quarter was
primarily due to declines in exports and federal spending
and a deceleration in consumer spending. Declining
performance in these categories was partly offset by
growth in residential and business investment.
The Conference Board’s U.S. Consumer Confidence
Index increased by 2.9% in February and was 22.1%
above the reading in February 2016. The latest reading
was the index's highest since July 2001. The monthly
increase reflected improvement to consumers'
assessment of current economic conditions and
expectations of future economic and job
circumstances.
According to the U.S. Department of Commerce Bureau
of Economic Analysis, the U.S. Personal Consumption
Expenditure Price Index (PCEPI) increased 0.4% in
January. The overall monthly increase was primarily
driven by a 4.2% increase in energy prices. The index's
year-over-year growth increased to 1.9%, the highest
annual rate of growth seen since October 2012. Growth
in the index has been steadily moving closer to the
Federal Reserve Bank's (Fed) 2.0% annual inflation target.
The Fed cited the recent price increases and improved
labor market as justification for its March increase to
short term interest rates.
Consumer prices, as measured by the U.S. Consumer
Price Index (CPI), increased 0.6% in January and 2.5%
above January 2016 prices. Continuing a 5-month
trend, the monthly increase was primarily driven by a
7.8% increase in the gasoline index. Indexes for shelter,
apparel and new vehicles also contributed to the
monthly increase. Energy prices increased 4.0% and
core inflation (all items less food and energy) increased
0.3% for the month. There were very few monthly
decreases in January, the most significant among them
being a small decrease in the used cars and trucks
index.
The Conference Board's U.S. Leading Economic Index
increased 0.6% in January and stands 1.6% above its
January 2016 reading. Of the index's 10 components, 8
made positive contributions in January. Particularly
strong contributors include interest-rate spread, building
permits, average initial claims, and the ISM index for new
orders. Stock prices also supported the monthly increase
in the index.

ARIZONA
Housing
Single-family housing construction is increasing.
Arizona’s 12-month total of single-family building
permits is 24,366, or 6.1% more than a year ago. The
comparable single-family permit growth rate for the
entire U.S. is 9.8%.
The 12-month total of multi-family building permits has
started to increase again. Arizona’s total of 10,965
multi-family building permits is 11.8% more than 2016.
Nationwide multi-family permits are (11.7)% lower than
2016.
Employment
As a result of the annual benchmarking revision of
establishment survey data, the Office of Economic
Opportunity (OEO) reported in March that Arizona
added added on average 3,100 more jobs in 2016
than previous estimates had indicated. On an
average annual basis, the job growth in 2016 was 0.1%
higher than previously estimated. Overall, the state
had a net increase of 68,100 (+2.6%) nonfarm jobs in
2016.
The latest estimate of nonfarm employment showed
that the state shed (56,700) jobs in January over
December in the prior year. Job losses typically occur
in January when the holiday season comes to an end.
The average job reduction for the month of January in
the prior 10 years was (58,200). Compared to January
2016, nonfarm employment was up by 2.0%, or 53,700
jobs.
The household survey data used to estimate the state’s
unemployment rate was also recently revised. The
historical revision was relatively small on an annualized
basis. January’s seasonally adjusted jobless rate of
5.0% remained unchanged from the prior month. The
U.S. unemployment rate in January was 4.8%.
In January, the Average Weekly Hours worked by
individuals in Arizona’s private sector was 34.8 hours.
This workload was 1.2% above the level during the prior
month and 1.8% above the level in January 2016. The
year-over-year growth rate is the highest since August
2015.
The Average Hourly Earnings received by private sector
workers was $24.53, which is 2.0% above the average in
the prior month. January earnings were 4.2% above
the average in January 2016. Year-over-year growth
has been at or above 3.0% in each month since
February 2016.

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

Monthly Indicators (Continued)
Revenue per available room was $77.17 in January,
which was 2.6% above the amount in January 2016.
January's Phoenix Sky Harbor Airport passenger count
during the month was up 0.1% compared to January
2016.
State Agency Data
At the beginning of March 2017, the total AHCCCS
caseload was 1.87 million members. Since the federal
health care expansion in January 2014, the overall
AHCCCS population has grown by 611,400 members.
Total monthly enrollment decreased by (1,000)
members, or (0.1)%, during February. The Traditional
population of low income parents and children
increased 8,800, or 0.8%, in February to a level of 1.10
million members. This increase was offset by an
enrollment decrease of (9,400), or (5.1)%, in the
Proposition 204 parent population. The nearly offsetting
changes in the 2 populations appear to be the result of
a shift of enrollees from Proposition 204 to Traditional.
The JLBC Staff is working with AHCCCS to understand
the reasons for this shift.
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 March 1,
enrollment in the program reached 15,200, or 1,500
more than the prior month’s enrollment.
In January 2014, the state started accepting new
enrollment to the Proposition 204 childless adults
program. In February 2016, the childless adult
population decreased by (1,900), or (0.6)%. At 316,400,
this population is 2.6% higher than a year ago.
The state also opted to expand adult Medicaid
coverage to 133% of FPL. Their enrollment decreased
by (400) in February and now totals 81,500 individuals.
Enrollment is (2.7)% lower than a year ago. The share of
this population's cost that is funded by the federal
government decreased from 100% to 95% in January.
There were 18,325 TANF recipients in the state in
February, representing a (1.4)% monthly decrease from
January. The year-over-year number of TANF recipients
has declined by (14.9)%. 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 February, 926,557 people received food
stamp assistance in the state, representing a (1.6)%
decrease over January caseloads. Compared to
February 2016, the level of food stamp participation
has declined by (3.7)%.
The inmate population was 42,223 as of February 28,
2017. This is a (1.1)% decrease since last
February. The population decreased by (0.2)% since
January 2017.
Based on information the Department of Child Safety
provided for January 2017, reports of child
maltreatment totaled 47,949 over the last 12 months,
a decrease of (5.8)% over the prior year. There were
17,149 children in out-of-home care as of December
2016, or (8.5)% less than in December
2015. Compared to the prior month, the number of
out-of-home children decreased by (1.5)%.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017
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

January
4th Q 2016
January
January
January
January
January
January
January

5.0%
10.8%
19,648
19,620
2,716,300
161,700
132,600
34.8
$24.53

0.0%
(0.1)%
25.2%
(17.2)%
(2.0)%
(0.2)%
(1.0)%
1.2%
2.0%

(0.5)%
(2.0)%
1.7%
(23.9)%
2.0%
1.4%
3.1%
1.8%
4.2%

January
January
January

$1.09 billion
$458.9 million
$387.2 million

13.6%
25.1%
(2.0)%

10.5%
7.8%
8.8%

January
January

24,366
10,965

0.5%
(3.6)%

6.1%
11.8%

January

5,317

40.6%

17.8%

January
December
January
January

$240,000
164.73
3,205
24,338

0.0%
0.2%
(3.2)%
8.0%

4.8%
4.9%
(22.9)%
(6.0)%

January
December
December
January

3,492,291
646,020
158,644
$77.17

(4.5)%
(17.0)%
(19.0)%
39.2%

0.1%
7.5%
30.2%
2.6%

4th Q 2016
December
December
3rd Q 2016
July 2016

91.7
224.64
3.6%
$279.1 billion
6,931,071

3.7%
0.2%
(0.1)%
1.0%
N/A

12.9%
3.0%
0.0%
3.8%
1.7%

May
May

AA / Aa2
Stable

N/A
N/A

N/A
N/A

March 1st

1,869,505
1,103,802
316,436
172,735
81,462
15,233
58,981
120,856

(0.1)%
0.8%
(0.6)%
(5.1)%
(0.5)%
10.6%
0.1%
0.3%

January
December
February
February

47,949
17,149
1,344
42,223

(0.6)%
(1.5)%
3
(0.2)%

February
February

18,325
926,557

(1.4)%
(1.6)%

(14.9)%
(3.7)%

December
December

18,935
27,799

(3)
(15)

337
240

$16.8 trillion

1.9%

1.9%

114.8
125.5
244.2
112.1

2.9%
0.6%
0.6%
0.4%

22.1%
1.6%
2.5%
1.9%

4th Q, 2016
(2nd Estimate)
February
January
January
January

3.6%
5.1%
2.6%
(8.4)%
(2.7)%
2042.5%
2.2%
4.9%
(5.8)%
(8.5)%
67
(1.1)%

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

Summary of Recent Agency Reports
Arizona Health Care Cost Containment System – Report
on Availability of Inpatient Psychiatric Treatment –
Pursuant to Laws 2016, Chapter 122, the Arizona Health
Care Cost Containment System (AHCCCS) reported on
the availability of inpatient psychiatric treatment for
enrollees in Arizona's behavioral health system.
AHCCCS' report included the following findings:
1.
2.

3.

4.

There were 1,590 licensed psychiatric beds in
Arizona hospitals as of 2015. An average of 76% of
those beds were occupied in 2015.
AHCCCS expended $238.4 million in Total Funds for
inpatient psychiatric stays in FY 2016, including
$74.9 million for 16,653 members under 22 years of
age and $163.5 million for 50,811 members 22 years
of age or older.
There were 1,538 AHCCCS enrollees that were sent
out of state for inpatient psychiatric care, including
348 members under the age of 22 and 1,190
members age 22 and older. AHCCCS notes that
out-of-state placements are sometimes necessary
due to the need for specialized programming not
currently available in Arizona, a lack of in-state
capacity, and ensuring proximity to family
members for the patient. The percent of inpatient
psychiatric expenditures for out-of-state care was
4% for members under age 22 and 1.8% for
members age 22 and older.
There were 465 AHCCCS members that
experienced "psychiatric boarding" in the first half
of FY 2016, including 102 members under age 22
and 363 members age 22 or older. Psychiatric
boarding refers to the holding of psychiatric
patients in an emergency room for at least 24
hours before transferring to a psychiatric treatment
setting. For the 465 enrollees that experienced
psychiatric boarding, AHCCCS reports that the

average time spent in the emergency room while
awaiting placement was 3-4 days. (Patrick
Moran)
AHCCCS – Report on Health Insurer Fee
Reimbursement – Pursuant to a FY 2017 General
Appropriation Act (Laws 2016, Chapter 117) footnote,
the Arizona Health Care Cost Containment System
(AHCCCS) submitted a report on retroactive
capitation rate increases for reimbursement of a
health insurer fee. The Affordable Care Act (ACA)
placed an $8 billion nationwide annual fee on the
health insurance industry in 2014 that grows to $14.3
billion in 2018 and is indexed to inflation thereafter.
AHCCCS and the Department of Economic Security
(DES) revised previously reviewed contract year (CYE)
2016 capitation rates to reimburse Medicaid health
insurers for costs of paying the fee in 2016.
Table 6 below compares the General Fund amounts
included in the FY 2017 budget for the health insurer
fee to actual costs reported by AHCCCS. The
General Fund impact of the capitation rate revision
to fund the health insurer fee is $(7.0) million less than
the $25.1 million included in the FY 2017 budget. Of
that difference, $(5.0) million is due to lower-thanbudgeted reimbursement for insurers of behavioral
health services. The JLBC Staff is working with the
agency to understand the reason for the large
savings in behavioral health services. (Jon Stall)
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 second quarter of FY 2017, DCS reports the
following trends in foster care and Medicaid eligibility:
1.

There were 16,820 children eligible for Medicaid
in foster care at the end of the second quarter,

Table 6

Health Insurer Fee Capitation Rate Revisions
General Fund Impact
($ in millions)

Populations
Acute Care
ALTCS Elderly & Physically Disabled
Behavioral Health Services
DES Developmentally Disabled
Total

FY 2017
Budget
$ 16.4
0.2
7.5
1.0
$ 25.1

FY 2017
Actual
$ 14.7
0.3
2.5
0.6
$ 18.1

Difference
from Budget
$ (1.7)
0.1
(5.0)
(0.4)
$ (7.0)

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

Summary of Recent Agency Reports (Continued)
2.

3.

4.

down (1.5)% from 17,075 at the end of the first
quarter of FY 2017.
The percentage of foster care children eligible for
Medicaid decreased from 94% at the end of the
first quarter of FY 2017 to 93% at the end of the
second 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 $492,500 in the
second 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 $79,500 in the second quarter of FY
2017. (Patrick Moran)

Department of Child Safety – Monthly Report on Hiring
– Pursuant to a FY 2017 General Appropriation Act
footnote, the Department of Child Safety (DCS)
reported on its progress in hiring and retaining child
safety staff through February 2017. (See Table 7
below.)
The number of direct line child safety staff
(caseworkers, caseworkers in training, caseworkers
awaiting training and hotline staff) was 1,344 in
February, or (62) 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 3 since
January.
There were also 1,392 non-direct line child safety staff
in February 2017, or (119) 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 10 since January. (Patrick
Moran)

Department of Education – Budget Status Report –
Pursuant to a General Appropriation Act footnote and
A.R.S. § 35-131D, the Arizona Department of Education
(ADE) recently provided an update regarding its
budget status for FY 2017. In that report, ADE estimates
that it will experience a $(20.7) million net funding
shortfall for formula programs for FY 2017. This consists of
an estimated $(15.8) million shortfall for Basic State Aid
and estimated $(4.9) million shortfall for Additional State
Aid (the Homeowner’s Rebate and 1% Cap programs).
ADE’s current $(20.7) million shortfall estimate is subject
to revision as additional data become available. The
JLBC Baseline includes a $17.1 million supplemental to
address ADE's FY 2017 shortfall. (Steve Schimpp)
Department of Environmental Quality – Third-Party
Report on E-Licensing Project – Pursuant to a FY 2015
General Appropriation Act footnote, the Department of
Environmental Quality (DEQ) provided a quarterly
update of the E-Licensing project. The vendor gave an
overall favorable evaluation of DEQ’s progress in
incorporating recommendations from the previous thirdparty report and provided 6 recommendations.
DEQ has now automated many of its services and is
expected to automate more of its services at an
accelerated pace. Customer adoption rates for
myDEQ are also steadily increasing. The vendor
commended DEQ's progress in developing a data
management framework but emphasized the need to
create a DEQ Data Governance Board, which would
make decisions relating to data management, data
quality assurance, data analysis and business
intelligence, and data security. No foreseeable project
end date or total estimated project costs were
provided. (Josh Hope)

Table 7
DCS Filled FTE Positions as of February 2017
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

February
1,065
69
210
1,344
1,392
2,736

Difference
(125)
(7)
70
(62)
(119)
(181)

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

Summary of Recent Agency Reports (Continued)
Supreme Court – Report on Criminal Case Proceedings,
Enforcement of Court Orders, and State Aid to Courts
Fund Expenditures – Pursuant to A.R.S. § 12-102.01D,
the Supreme Court is required to report annually to the
JLBC on the progress of criminal case processing
projects and the enforcement of court orders including
the collection of court ordered fees, fines, penalties,
sanctions and forfeitures. Additionally, pursuant to
A.R.S. § 12-102.02D, the Supreme Court is required to
report annually to the JLBC on the expenditure of
monies from the State Aid to the Courts Fund for the
prior fiscal year and the progress made in improving
criminal case processing.
Since 2003, the Supreme Court has contracted with an
outside vendor to increase compliance with court
orders, resulting in total collections of $46.6 million from
backlogged cases in FY 2016, or 3.3% above FY 2015.
Additionally, the Supreme Court utilizes a debt setoff
program to match outstanding criminal fines or fees to
outstanding tax and governmental liabilities. Tax and
lottery interceptions in the debt setoff program were
$15.0 million in FY 2016, or flat relative to FY 2015.

Expenditures from the State Aid to the Courts Fund were
$2.4 million in FY 2016. These monies were disbursed to
Superior and Justice Courts for the processing of criminal
cases.
The Supreme Court reported that criminal case
processing was enhanced by using State Aid to the
Courts Fund monies for computers, video conferencing
equipment, a case management system, early
resolution and deferred incarceration programs, staff
training, pre-sentence investigators, judges, pre-trial
services, probation and domestic violence staff, clerks,
court commissioners, administrative positions, support
staff, interpreters, security staff, computer programmers,
supplemental funding to Driving Under the Influence
(DUI) and drug courts, and the enhancement of
electronic data sharing. (Eric Billings)

February Spending
February 2017 General Fund spending was $603.6
million, which represents an increase of $77.5 million
above February 2016. (See Tables 8 & 9). Year-to-date,
General Fund spending is $6.91 billion, or $(3.8) million
below the prior year.
Table 8
General Fund Spending ($ in Millions)
Change From

YTD Change

Feb 17

Feb 16

Year-to-Date

from FY 16

AHCCCS

102.8

21.4

1,167.1

310.5

Corrections

86.8

8.9

691.0

0.3

Child Safety

21.4

(2.7)

254.0

(17.0)

Economic Security

13.5

3.7

482.1

58.3

Education

225.8

4.3

3,030.8

113.3

Health Serv ices

4.1

(11.4)

58.1

(486.4)

Public Safety

3.6

1.8

64.9

8.1

School Facilities Board

41.7

17.8

212.9

27.0

Univ ersities

49.6

13.2

449.8

(61.5)

Leaseback Debt Serv ice

0.0

0.0

84.1

0.0

Other

54.3

20.5

411.2

43.6

Total

603.6

77.5

6,906.0

(3.8)

Agency

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

Table 9

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

Feb 17
1,377.5
65.5
19.8
569.2
102,765.3
1,644.0
67.5

Change from
Feb 16

Year-to-Date

YTD Change
from FY 16

(3,437.5)
3.8
9.2
286.8
21,388.9
(1,057.5)
(8.0)

27,345.2
84,117.4
588.6
85.9
6,084.6
1,167,080.4
15,014.7
656.9

9,666.3
2.8
12.3
4.7
831.3
310,530.2
356.3
(60.0)

21,379.7
1,747.6
263.5
36.0
86,780.4
2,465.9
38.0
13,475.4
56.8
225,818.0
(38.7)
9.4
26.6
41.0
197.2
399.6
386.5
4,131.8
209.3
59.4
60.3
40.6
430.7

(2,727.3)
(535.7)
48.3
34.5
8,899.8
554.2
38.0
3,664.0
(29.6)
4,279.7
(766.4)
(12.1)
4.3
(38.3)
(9.8)
(212.0)
107.9
(79.6)
(306.1)
(11,383.4)
14.0
(29.0)
60.3
(197.8)
94.3

254,039.8
14,439.5
40,403.7
611.3
690,993.6
14,000.5
16,350.4
38.0
482,133.2
610.3
3,030,827.0
5,607.1
2,823.6
133.9
408.4
503.2
1,859.7
(2.4)
4,385.1
1,854.5
6,182.9
58,095.5
2,197.0
526.2
580.9
758.5
3,232.1

(16,964.6)
(3,451.9)
1,725.6
323.1
280.5
8,000.0
(1,827.9)
38.0
58,298.5
(132.7)
113,281.0
(114.1)
(4,176.4)
8.1
27.9
(122.1)
(130.8)
(1,467.8)
845.2
60.1
(685.2)
(143.1)
(486,426.4)
(68.4)
(61.6)
580.9
(396.4)
(86.7)

2,277.9
1,023.7
855.3

230.9
(1.3)
(678.9)

59,094.8
8,988.6
14,488.8

2,542.3
(209.2)
(2,471.8)

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – MARCH 2017

Table 9 (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 - State Treasurer/JP Salaries
Other - ADOT Capital (Navajo Nation Projects)
Other - ADOT Capital (Local HURF Distribution)
Other
Total

Feb 17

Change from
Feb 16

Year-to-Date

YTD Change
from FY 16

604.6

(29.7)

6,765.5

(307.7)

1,569.6
1,255.6
160.3
547.1
742.7
74.5
11.9
3,577.5
146.1
2,633.9
41,729.1
821.5
34.0
37.1
(1.4)

77.7
7.8
(4.9)
51.7
129.2
(11.3)
4.2
(2.5)
1,814.0
(6.5)
(23.7)
(1,424.5)
17,799.7
(2,172.9)
16.8
37.1
(2.5)

12,821.9
8,594.2
1,508.8
4,585.0
5,717.9
734.8
86.6
20,449.0
1,392.0
64,949.4
6,000.0
1,228.0
1,700.5
19,722.3
212,928.2
19,719.0
186.7
6,187.2
37.7
34.1

(254.3)
(536.2)
(7.8)
335.7
740.6
(8.2)
6.8
(2.5)
(277.8)
(4.8)
8,144.0
37.7
37.1
(7,761.8)
27,035.9
10,683.0
6.4
(212.1)
37.7
12.1

(4,789.9)
24,684.4
8,436.3
21,311.5
390.4
715.7
65.6
30,000.0
181.8
603,620.4

(4,812.1)
8,129.8
2,609.4
7,231.3
(47.6)
(150.7)
(4.2)
(23.5)
30,000.0
86.7
77,487.1

14,485.6
197,409.6
67,441.4
170,492.3
3,688.9
6,784.2
500.0
0.8
757.5
1,500.0
30,000.0
419.9
6,905,969.0

(4,592.8)
(26,113.3)
(9,668.6)
(21,079.5)
284.9
(149.0)
500.0
(820.1)
(60.1)
1,500.0
30,000.0
283.1
(3,793.3)

JLBC
Jan 11

Jul-15

Jul-16

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
Jan 17

Jan-16

Jan 09

$24.53 / Hour
(January 2017)

$20

$19

4.2% Y/Y Growth
(January 2017)
Total Monthly Claims for UI Benefits

Jan-17

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

$21

Jan-16

Jan 08
July 08

$22

Jan-15

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

Jul 14

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

July 11

Jan 07
July 07

$ / Hour

1

JLBC

Average Hourly Earnings – Private Sector

$26

3

JLBC

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

35,000

Jul 15

Jan 17

Jul 16

Jan 16

2,200
Jul 14

2,300

Jan 15

2,400

Jan 14

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

March 2017
Appendix A

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
Jan 17

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
Year Over Year Growth (%)

Page:

July 10

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

2,900

2,800

2,700

2,600

2,500

$22.73 / Hour
(Octoberjobs
2014)
2,716,300
(January 2017)

2,100

2.0% Y/Y Growth
(January 2017)

2

$25

Initial Claims for Unemployment Insurance

$24

$23

45,000

40,000

30,000

19,468 Claims
(January 2017)

25,000

20,000

15,000

10,000

5,000

Not seasonally adjusted

4

JLBC
12-Month Moving Sum

0

7

JLBC
Jul 16

Jan 16

Jul 15

Jan 15

Jul 14

Excludes temporary 1 ¢ sales tax

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.

Jan 17

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 15

Jan 17

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

Jan 17

Jul 16

Jan 16

$ in Millions
$50

Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

230

Jul 11

Jan 11

Jul 10

140

Jul 09

150

10,000

Jan 10

20,000

Jul 08

30,000

Jan 09

40,000

Jan 08

Single Family Unit - 24,366 Permits
Multi-Family Unit - 10,965 Permits
(Jan. 2017)

Jul 07

70,000

Jul 06

90,000

Jan 07

100,000

Jan 06

Residential Building Permits

Jul 05

80,000

JLBC

Jul 04

5

Jan 05

Jul 16
Jan 17

5.3% Y/Y Growth
(January 2017)
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%

Jul 03

Jul 15
Jan 16

Jul 14
Jan 15

$100

Jan 04

Jul 14
Jan 15

* Jan 14

Jul 13

Jan 13

Jul 12

Jan 12

$251.0 million
(January 2017)

Jul 02

Jul 13

Jan 11
July 11

$175

Jan 03

50,000
Jan 13

Jan 10
July 10

$200

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
$225

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
Jan 17

Building Permits

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

$250
$100

$75

$41.3 million
(January 2017)

$150
$25

$0

11.6% Y/Y Growth
(January 2017)

6

Economic Activity Index

240

220

224.6 Index Value
(December 2016)

210

200

190

180

170

160

8