JLBC - Monthly Fiscal Highlights

June 2017

Summary
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 1.5%
above the
prior year and
are $(40.3)
million below
forecast.”

May 2017 General Fund revenues were
$725.1 million and were 6.7% above the prior
year. May collections were $45.8 million
above the enacted budget forecast.
Most of the month's forecast overage came
in the Individual Income Tax (IIT) category,
which grew by 3.9% and was $44.4 million
above forecast.
April Individual Income Tax revenues were
$(101.7) million below forecast. In the May
Monthly Fiscal Highlights, we speculated that
timing of tax return processing may have
caused the April results. Looking at the final
May data, the state did recapture some, but
not all, of the April Individual Income Tax
shortfall.

the retail component of the category,
however, the current cause is unclear at this
time. Data regarding the performance of
each subcomponent of retail sales (such as
auto sales) will not be available for several
months.
FY 2017 Ending Balance
Year-to-date, excluding Urban Revenue
Sharing and one-time fund transfers, General
Fund revenues are 1.5% above the prior year
and are $(40.3) million below forecast.
The enacted budget projected an FY 2017
ending balance of $171 million. Given the
year-to-date revenue shortfall, that balance
appears to provide sufficient room to cover
any year-end revenue gap.

Several factors helped recapture some of
the April IIT shortfall. During May, the number
of IIT payments processed increased by 21%
over the prior year and IIT payments
contributed $14.4 million of the overall $44.4
million IIT forecast gains.

As a quarterly reporting month, June can
result in substantial Individual Income Tax and
Corporate Income Tax activity. The month-todate June results, however, do not currently
suggest any significant deviation from the
monthly forecast.

In addition, the number of IIT refunds issued
during May declined by (9)% compared to
the prior year, and refunds contributed to
$25.7 million of the overall $44.4 million IIT
forecast overage.

May Spending
In comparison to May revenue collections of
$725 million, May 2017 spending was $636.6
million, which is a decrease of $(9.4) million
from the prior year.

In terms of the state's other major revenue
categories, Sales Tax posted a second
consecutive month of strong growth above
5%. Based on preliminary information, the
growth in May Sales Tax collections is due to

Table of Contents

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

Summary

• DCS – Monthly Report on Hiring ....................... 7

• FY 2017 Ending Balance .................................... 1

• EEC – Budget Stabilization Fund Report.......... 7

• May Spending ..................................................... 1

• DES – DD Cost Effectiveness Study .................. 8

May Revenues ........................................................ 2

• ADE – Data System (ELAS) Report .................... 8

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

• ADE – Federal Monies for English Learners ..... 9

Summary of Recent Agency Reports

• DPS – Quarter Report on GIITEM Fund............. 9

• AHCCCS – Nursing Facility Assessment ........... 7

May Spending ....................................................... 10

• DCS – Foster Care Medicaid Report ............... 7

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

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 2017

May Revenues
Table 1

General Fund Revenues ($ in Millions)

June
Year-to-Date

FY 2017
Collections
$ 725.1
$ 8,198.9

Difference From
Enacted Forecast
$ 45.8
$ (40.3)

Sales Tax collections of $375.9 million were 5.1% above
May of last year and $7.2 million above the forecast for
the month. May tax collections reflect sales activities that
occurred in April. Year-to-date, collections are up by 3.5%
and are $9.8 million above forecast.
Sales tax collections by category for May were not
available as of the Monthly Fiscal Highlights publication
date. The most recent data available, which is for April
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

April
2.3%
18.6%
20.2%
7.5%
0.9%

YTD
3.2%
7.5%
6.4%
6.3%
(1.5)%

Individual Income Tax net revenues of $294.8 million in
May were $11.1 million more than in the prior year and
$44.4 million above forecast. Year-to-date, revenue has
grown 3.8% over the prior year and is $12.9 million above
forecast.
As indicated in Table 3, May withholding decreased by
(3.8)% from last year. Year-to-date, revenue has grown
5.3% and is $19.4 million above forecast.
Due to technical reasons, DOR underreported
withholding receipts by a cumulative total of $(38.3)
million during July – April in FY 2016. DOR recognized the
entire $38.3 million in May 2016. If revenues had not
been underreported in the beginning of FY 2016, and
overreported in May 2016, year-over-year growth in
withholding would have equaled 7.1% in May 2017.
May estimated and final payments of $38.6 million were
64.5% above last year. Year to date, payments have
decreased (0.9)% compared to FY 2016 and are $(25.9)
million below the forecast.
May Individual Income Tax refunds totaled $(106.9)
million – this compares to $(116.9) million in May 2016
and a forecasted amount of $(132.6) million. Year-todate refunds have led to a $19.5 million revenue
increase compared to the enacted forecast.

Table 3

Difference
From FY 2016
$ 45.8
$ (105.4)

Individual Income Tax Growth Rates
Compared to Prior Year

Withholding
Estimated/Final Payments
Refunds

May
(3.8)%
64.5%
(8.6)%

YTD
5.3%
(0.9)%
3.4%

Corporate Income Tax net collections were $28.0 million
in May, which was $(10.5) million less than in the prior
year and $(0.2) million below the forecast. Year to date,
collections are $(178.9) million below prior year
collections and $(51.3) million below forecast.
Insurance Premium Tax collections of $41.4 million in
May were $0.6 million above the prior year. Year-todate, collections are 1.4% above last year and $(18.1)
million below the forecast.
Prior month tobacco and liquor tax are not typically
available for publication in the Monthly Fiscal
Highlights. Through the end of April, year-to-date
tobacco tax revenues are (7.1)% below FY 2016 and
are$(1.3) million below forecast. Year-to-date liquor
collections are 2.6% above 2017 and are $0.4 million
above forecast. Due to the late data, May collections
are simply reported at the forecast level.
The Lottery Commission reports that May ticket sales
were $78.7 million, which is $7.6 million, or 10.7%, above
sales in May 2016. Year-to-date ticket sales are $776.0
million, which is (3.5)% below last year’s sales. The yearto-date decrease reflects the one-time nature of
January 2016 ticket sales associated with a recordbreaking $1.4 billion Powerball jackpot. In terms of
General Fund collections, year-to-date lottery revenues
through May are $5.6 million above the forecast.
Highway User Revenue Fund (HURF) collections of $114.8
million in May were up 3.9% compared to May of last
year, but were $(0.8) million below forecast. Year-todate collections are 3.4% above last year.
Due to delays in reporting final April revenues for various
revenues sources, DOR has made technical adjustments
to prior month collection figures. For May, DOR has
decreased the amount of prior General Fund revenue
collections by $(0.1) million, and the adjustment has
been included in the reported year-to-date results.

3
Table 4

General Fund Revenue:

Change from Previous Year and Budget Forecast
May 2017
Current Month

FY 2017 YTD (Eleven Months)

Change From
Actual

May 2016

May 2017

Amount

Change from
Budget Forecast

Percent

Amount

Actual

Percent

May 2016

May 2017

Amount

Budget Forecast
Percent

Amount

Percent

Taxes
Sales and Use
Income - Individual
- Corporate

$375,941,459

$18,302,914

294,799,742

11,053,856

27,990,248

(10,480,867)

5.1 %

$7,227,637

3.9

44,360,301

2.0 %
17.7

$4,087,098,393

$139,911,784

3,728,288,928

135,587,357

3.5 %

$9,779,508

0.2 %

3.8

12,944,938

0.3

(27.2)

(216,376)

(0.8)

296,631,084

(178,869,913)

(37.6)

(51,265,706)

(14.7)

Property

4,965,524

2,887,773

139.0

392,045

8.6

29,622,294

(2,399,093)

(7.5)

(2,675,248)

(8.3)

Luxury - Tobacco

2,187,605

188,302

9.4

0

0.0

20,978,860

(1,247,418)

(5.6)

(1,295,254)

(5.8)

3,103,976

202,858

7.0

0

0.0

31,874,538

920,385

3.0

41,421,304

575,696

1.4

173,930

0.4

408,949,638

5,650,319

1.4

- Liquor
Insurance Premium
Other Taxes
Sub-Total Taxes

41,953

(276,477)

$750,451,811

$22,454,054

29,668,300

29,668,300

2,725,288

720,912

(86.8)
3.1 %

(788,895)
$51,148,642

(95.0)
7.3 %

2,706,036
$8,606,149,772

(4,392,419)
$95,161,002

(61.9)
1.1 %

430,688

1.4

(18,085,583)

(4.2)

(4,791,669)

(63.9)

($54,958,327)

(0.6) %

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

(513,266)
1,875,234
(4,784,044)
0
982,298

(485,330)
44,813
(1,300,920)
0
(491,570)

-36.0
--

2,406,366

8.8

74,404,643

9,431,893

14.5

5,643,343

8.2

829,871

43.8

34,804,080

7,948,290

29.6

6,188,286

21.6

(562,587)

--

(655,202)

--

2.4

(297,760)

(13.7)

27,912,718

2,044,130

7.9

(1,443,874)

(4.9)

37.3

(6,004,185)

--

32,808,849

11,853,861

56.6

5,764,327

21.3

--

0

0

(63.7)

30,304,822

144,658

(15.2) %

$199,814,686

$31,010,136

18.4 %

$14,622,238

7.9 %

6.2 %

$8,805,964,458

$126,171,138

1.5 %

($40,336,089)

(0.5) %

-(33.4)

$29,953,810

$28,156,205

-- %

$780,405,621

$50,610,260

6.9 %

0
(1,722,879)
($5,351,175)
$45,797,467

(420,427)

(412,696)

--

-0.5

0
(874,642)

-(2.8)

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

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

(4,828,986)
0
(4,828,986)

9.6

0

(0.0)

--

0

--

9.6 %

0

(0.0) %

$45,797,467

6.7 %

$8,198,872,353

(0.7) %

$1,283,281,360

$725,107,107

$45,781,273

6.7 %

$114,840,627

$4,277,691

3.9 %

(608,283,654)
1,191,548
(607,092,106)

(53,118,849)
(178,405,707)

9.6
(99.3)

0

(0.0)

0

0.0

(231,524,556)

61.6 %

0

(0.0) %

($105,353,418)

(1.3) %

($40,336,089)

(0.5) %

3.4 %

($11,698,285)

(0.9) %

Non-General Funds
Highway User Revenue Fund

($835,112)

$41,881,538

4

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 2017

Monthly Indicators
NATIONAL

ARIZONA

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 1.2% in the
first quarter of 2017. This estimate reflects a slowdown
from the growth of 2.1% experienced in the prior quarter.
The slowdown relative to the prior quarter was primarily
due to a deceleration in consumption expenditures and
a decrease in inventory investment. Declining
performance in these categories was partly offset by
growth in exports and residential and business
investment. Economists expect a portion of the
slowdown in GDP growth reflects temporary seasonal
variations not fully removed from the estimates.

Housing
Single-family housing construction is increasing. In April,
Arizona’s 12-month total of single-family building
permits was 24,943, or 4.4% more than a year ago. The
comparable single-family permit growth rate for the
entire U.S. was 8.4%.

The Conference Board’s U.S. Consumer Confidence
Index decreased by (1.3)% to 117.9 in May. The reading
was still 27.6% above the index in May 2016. The monthly
decrease reflected a reduction in expectations of future
economic conditions, following rapid gains earlier in the
year. Consumer confidence reached a 16-year high in
March.
According to the U.S. Department of Commerce Bureau
of Economic Analysis, the U.S. Personal Consumption
Expenditure Price Index (PCEPI) increased 0.2% in April.
The overall monthly increase was partly driven by a 1.0%
rise in energy prices. The index had reached year-overyear growth of 2.1% in February 2017, which is above the
Federal Reserve Bank's 2.0% annual inflation target. The
index's annual growth, though, since decreased to 1.7%
in April.
Consumer prices, as measured by the U.S. Consumer
Price Index (CPI), decreased (0.1)% in May and
increased 1.9% above May 2016 prices. The energy
index was the primary contributor the monthly decrease,
declining by (2.7)%, mostly driven by a (6.4)% decrease
in the gasoline index. A number of other indexes
decreased, including apparel, airline fares,
communication and medical care. Core inflation (all
items less food and energy) increased 0.1% for the
month, and the shelter index increased 0.2% for the
month.
The Conference Board's U.S. Leading Economic Index
increased 0.3% in April to 126.9 and stands 3.2% above its
April 2016 reading. Of the index's 10 components, 8
made positive contributions for the month. Interest rate
spread made its typically strong contribution, and
average weekly initial claims and the Institute of Supply
Management (ISM) index for new orders bolstered the
increase as well. Building permits and stock prices were
the only negative contributors for the month.

The 12-month total of multi-family building permits has
started to increase again. In April, Arizona’s total of
12,025 multi-family building permits were 41.6% more
than in 2016. Nationwide multi-family permits were
(8.3)% lower than in 2016.
Tourism
Revenue per available room was $96.15 in April, which
was 11.5% above the amount in April 2016. Ridership
through Phoenix Sky Harbor Airport during the month
was up 2.7% compared to April 2016.
Employment
According to the latest employment report released by
the Office of Economic Opportunity (OEO), the state
lost (14,700) nonfarm jobs in May over the prior
month. This was more than the 10-year average net
job loss for May of (5,400) jobs. Most of the month-overmonth job losses occurred in the Government sector
(-9,200), followed by the Professional and Business
Services sector (-2,100).
Compared to the same month in the prior year,
Arizona added 48,200 net new jobs in May, which is a
year-over-year increase of 1.8%. The state's job growth
rate has slowed in each of the last 4 months. The
largest year-over-year job gains in May came from the
following industries: Leisure and Hospitality Services
(+17,100), Education and Health Services (+11,200),
and Financial Activities (+9,700).
The state’s regular unemployment rate increased from
5.0% in April to 5.1% in May. Compared to May 2016, the
jobless rate is down by (0.2)%. The U.S. unemployment
rate declined from 4.4% in April to 4.3% in May. The last
time the U.S. unemployment rate was below 4.3% was in
February 2001. Arizona's jobless rate has not been below
5.0% since February 2008.
In April, the Average Weekly Hours worked by
individuals in Arizona’s private sector was 34.9 hours.
This workload was 1.5% above the level during the prior
month and 0.3% above the level in April 2016.
The Average Hourly Earnings received by private sector
workers was $25.25, which is 2.3% above the average in
the prior month. April earnings were 5.6% above the

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 2017

Monthly Indicators (Continued)
average in April 2016, which is tied for the highest rate
of year-over-year growth since October 2009.
The Office of Economic Opportunity (OEO) reported
that 23,124 initial claims for unemployment insurance
were filed in April, a decrease of (5.2)% compared to
the same month last year.
According to OEO, the state had a total of 25,896
claimants receiving unemployment insurance benefits
in April, an increase of 9.3% from March. This figure is
(9.0)% below the April 2016 level.
State Agency Data
At the beginning of June 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 615,700 members.
Total monthly enrollment decreased by (2,200)
members, or (0.1)%, during May. The Traditional
population of low income parents and children
decreased by (3,100), or (0.3%), in May to a level of 1.08
million members. This drop was partly offset by an
enrollment increase of 500, or 0.3%, in the Proposition
204 parent population.
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 June 1,
enrollment in the program reached 21,050, or 1,200
more than the prior month’s enrollment.
In January 2014, the state started accepting new
enrollment to the Proposition 204 childless adults
program. In May 2017, the childless adult population
decreased by (300), or (0.1)%. At 317,100, 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 increased by
100 in May and now totals 82,200 individuals. Enrollment
is (1.3)% 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 17,572 TANF recipients in the state in May,
representing a (1.3)% monthly caseloads decrease from
April. The year-over-year number of TANF recipients has
declined by (10.9)%. 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 May, 911,921 people received food stamp
assistance in the state. Food stamp enrollment in May
was essentially unchanged from the prior
month. Compared to May 2016, the level of food
stamp participation has declined by (4.0)%.
The inmate population was 42,187 as of May 31,
2017. This is a (1.7)% decrease since last May. The
population decreased by (0.2)% since April 2017.
Based on information the Department of Child Safety
provided for April 2017, reports of child maltreatment
totaled 47,352 over the last 12 months, a decrease of
(4.7)% over the prior year. There were 16,931 children
in out-of-home care as of March 2017, or (10.5)% less
than in March 2016. Compared to the prior month,
the number of out-of-home children decreased by
(1.1)%.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 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 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

May
1st Q 2017
April
April
May
May
May
April
April

5.1%
10.9%
23,124
25,896
2,747,000
162,000
138,300
34.9
$25.25

0.1%
0.1%
29.6%
9.3%
(0.5)%
0.0%
(0.7)%
1.5%
2.3%

(0.2)%
(0.8)%
(5.2)%
(9.0)%
1.8%
1.6%
3.4%
0.3%
5.6%

February
February
February

$952.9 million
$331.7 million
$379.8 million

(12.6)%
(27.7)%
(1.9)%

5.8%
3.1%
11.4%

April
April

24,943
12,025

0.6%
4.6%

4.4%
41.6%

April

6,300

(5.0)%

(7.0)%

April
March
April
April

$257,095
166.32
2,995
24,176

4.6%
0.6%
(2.9)%
(1.8)%

9.4%
5.6%
(27.8)%
(10.5)%

April
December
February
April

3,837,155
646,020
256,236
$96.15

(10.4)%
(17.0)%
32.2%
(24.1)%

2.7%
7.5%
(5.6)%
11.5%

4th Q 2016
December
4th Q 2016
July 2016

91.7
3.6%
$284.3 billion
6,931,071

3.7%
(0.1)%
0.9%
N/A

12.9%
0.0%
4.6%
1.7%

May
May

AA / Aa2
Stable

N/A
N/A

N/A
N/A

June 1st

1,873,850
1,078,398
317,135
194,261
82,228
21,050
59,673
121,105

(0.1)%
(0.3)%
(0.1)%
0.3%
0.1%
6.2%
0.3%
(0.6)%

April
March
May
May

47,352
16,931
1,343
42,187

(0.5)%
(1.1)%
(18)
(0.2)%

May
May

17,573
912,171

(1.3)%
0.0%

March
March

19,130
28,221

1st Q, 2017
(2nd Estimate)
May
April
May
April

52
172

3.9%
2.3%
2.6%
6.2%
(1.3)%
N/A
2.5%
4.6%
(4.7)%
(10.5)%
16
(1.7)%
(10.9)%
(4.0)%
486
579

$16.9 trillion

2.0%

1.2%

117.9
126.9
243.9
112.2

(1.3)%
0.3%
(0.1)%
0.2%

27.6%
3.2%
1.9%
1.7%

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 2017

Summary of Recent Agency Reports
AHCCCS – Report on Nursing Facility Assessment
Distribution Notification – A FY 2017 General
Appropriation Act footnote allows the Arizona Health
Care Cost Containment System (AHCCCS)
Administration to spend above the appropriated level of
$72.0 million for supplemental payments to nursing
facilities, but requires AHCCCS to report the increased
payment total. In May 2017, AHCCCS reported they
expect to make $77.0 million in supplemental payments
in FY 2017.
AHCCCS levies an assessment on nursing facilities to
receive matching Federal Funds that are used to make
supplemental payments to facilities for covered
Medicaid expenditures. On January 1, 2017, the agency
increased the assessment rate from $1.40 to $1.80 for
facilities with more than 43,500 Medicaid bed days per
year and from $10.50 to $15.63 for facilities with less than
43,500 Medicaid bed days per year.
The additional $5.0 million of supplemental payments
above the original FY 2017 budgeted amount reflects
additional funding from the January 1, 2017 increase to
assessment rates. The $5.0 million increase consists of
$1.5 million in assessments levied on nursing facilities (the
state match) and $3.5 million in Federal Funds. (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 third
quarter of FY 2017, DCS reports the following trends in
foster care and Medicaid eligibility:
1.

2.

There were 16,408 children eligible for Medicaid in
foster care at the end of the third quarter, down
(2.5)% from 16,820 at the end of the first quarter of FY
2017.
The percentage of foster care children eligible for
Medicaid increased from 93% at the end of the

3.

4.

second quarter of FY 2017 to 96% at the end of
the third quarter of FY 2017.
The amount of non-Medicaid expenditures for
behavioral health inpatient facilities and
behavioral health residential facilities used by
DCS to supplement Medicaid behavioral health
placement services was $1,268,900 in the third
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 $112,600 in the
third 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 May 2017. (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
May, or (63) fewer staff than the number of funded
positions. Most of the difference between funded
positions and filled positions was driven by lowerthan-budgeted staffing of caseworkers, which was
partly offset by higher-than-budgeted staff in
training. Total direct line staff decreased by (18)
since April.
There were also 1,388 non-direct line child safety
staff in May 2017, or (123) fewer staff than the
funded staffing level. The budgeted staffing level is
1,511 excluding Attorney General positions. Total
non-direct line positions decreased by (10) since
April. (Patrick Moran)
Economic Estimates Commission – Report on the
Budget Stabilization Fund – Pursuant to A.R.S. § 35144F, the Economic Estimates Commission (EEC) is
annually required to calculate the amount of
monies that may be deposited to or withdrawn

Table 6
DCS Filled FTE Positions as of May 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

May
1,087
72
184
1,343
1,388
2,731

Difference
(103)
(4)
44
(63)
(123)
(186)

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 2017

Summary of Recent Agency Reports (Continued)
from the Budget Stabilization Fund (BSF). The EEC
estimate is calculated based on a formula that
compares the growth rate of real adjusted Arizona
personal income in the most recent calendar year to the
average in the last 7 calendar years (hereafter referred
to as the “trend” growth rate).
Since the calendar year 2016 growth rate exceeded the
trend growth rate by 0.91%, EEC reported on May 31,
2017 that the formula calls for a BSF deposit of $84.3
million at the end of FY 2017. EEC calculations under the
formula, however, do not result in any automatic
deposits or withdrawals, as they must be authorized by
legislative action. In practice, the formula has only
served as a general guideline and has rarely been used
to determine the actual deposit or withdrawal. The FY
2018 budget does not include an appropriation of these
monies to the BSF.
The current BSF balance is about $460 million as the result
of large deposits in FY 2012 and FY 2013 and
accumulated interest earnings. (Ben Murphy)
Department of Economic Security – Report on Cost
Effectiveness Study Rates for Developmental Disabilities
Programs – Pursuant to A.R.S. § 36-2960, the Department
of Economic Security (DES) provided its annual report of
the cost-effectiveness study (CES) rate for persons
receiving services from the Division of Developmental
Disabilities (DDD). The CES reflects a federal requirement
for Arizona’s Medicaid program that the net cost of
home and community-based services (HCBS) for a DDD
client enrolled in ALTCS may not exceed the net cost of
institutional services for that client.
Table 7 below displays the CES for each DDD institutional
setting, and the percentage change compared to the
prior year. The FY 2018 CES ranges from approximately
$13,510 per month ($162,120 in annual costs) for clients

that would be placed in an Intermediate Care
Facility for Individuals with Intellectual Disabilities
(ICF/ID) to $33,458 monthly ($401,496 annually) for
individuals that would be placed in a nursing home
with the most intensive level of supervision. The FY
2018 budget continues to include $120,000 from the
Special Administration Fund to allow clients with
HCBS costs that exceed the CES to continue
receiving services at home or in the community.
(Patrick Moran)
Department of Education – Report on Education
Learning and Accountability System – Pursuant to
A.R.S. § 18-104, the Arizona Department of
Education (ADE) must contract with an
independent third-party vendor to provide
additional oversight on the development of ADE’s
Arizona Education Learning and Accountability
System (AELAS). The vendor is required to submit
quarterly reports that evaluate and assess the
project’s feasibility, estimated expenditures, timeline
for completion, technology approach and scope
throughout the life of the project. The vendor’s
most recent quarterly review, based on its April site
visit, was received on May 18, 2017.
The third-party review states that the $7.3 million FY
2018 appropriation for AELAS "is in on the low end of
the amount needed to maintain AELAS operations,
and does not provide funding for further
development, in particular of the replacement of
[the school payment reports]."
The review also states that ADE expects to
discontinue the statewide Opt-In SSIS program after
calendar year 2018 due to fiscal instability caused
by the low margins generated by small district users
and the June 2016 JLBC provision that prohibits
further marketing the offering to new (including
larger) districts.

Table 7
DDD Cost Effectiveness Study Rates
Monthly Cost ($)
Institutional Setting
ICF/ID 1/
Nursing Home Level II
Nursing Home Level III
Nursing Home Level IV
Behavioral Health Residential Facility

____________

FY 2017
13,395
15,846
18,433
33,458
24,425

FY 2018
13,510
17,137
19,078
33,458
28,166

1/ Intermediate Care Facility for Individuals with Intellectual Disabilities.

Change
0.9%
8.1%
3.5%
0.0%
15.3%

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 2017

Summary of Recent Agency Reports (Continued)
The review also recommends considering alternative
funding strategies to sustain the maintenance and
development of AELAS:
•
•
•
•
•

Charge districts a per student user fee
As allowed by Laws 2016, Chapter 317:
Pursue sale of AELAS components to other state
education agencies
Pursue sale and co-ownership with private
software/sales company
Release a request for proposal (RFP) for privatization
of ongoing AELAS support and maintenance

The review notes that ADE has improved the AELAS help
desk service and that "significant progress has been
made to reduce average ticket backlog and resolution
time" since the October 2016 review identified concerns
in this area.
The third-party reviewers have estimated an expected
annual savings from AELAS of $40 million per year. This
estimate is based on a broad assumption that the system
would produce more accurate student counts, saving
roughly 1% of the approximately $4 billion of school
payments processed by the system. It is difficult to
validate this estimate, however, as it would require
making the calculation using both the old and new
systems simultaneously. (Matt Beienburg)
Department of Education – Report on Federal Monies for
English Learners – Pursuant to A.R.S. § 15-756.10,
paragraph 3, the Department of Education (ADE)
recently submitted a report that includes an itemized list
of all federal monies received by the department for
English language learners in FY 2017. ADE received $14.4
million in federal Title III (Language Instruction for Limited
English Proficient and Immigrant Students) funding for FY
2017. Of that amount, approximately $13.7 million was
distributed directly to school districts and charter schools.
The remaining $0.7 million was used for state
administration, technical assistance, and to meet federal
set-aside requirements for immigrant education. (Steve
Schimpp)
Department of Public Safety – Quarterly Report on the
GIITEM Fund – Pursuant to A.R.S. § 41-1724, the
Department of Public Safety (DPS) is required to report
quarterly on Gang and Immigration Intelligence Team
Enforcement Mission (GIITEM) Fund expenditures. In FY
2017, the GIITEM Fund was appropriated $2.6 million in
General Fund monies for grants to local law enforcement
agencies to help with border security. Additionally, due
to the non-lapsing nature of the GIITEM Fund
appropriations, DPS also has access to unused prior-year
appropriations. During the third quarter of FY 2017 DPS
expended $104,200 primarily for equipment and other

operating costs related to DPS' support of local law
enforcement that participate in the GIITEM Task
Force. These expenditures bring the year-to-date
total to $2.4 million, of which $247,900 has been
expended from the FY 2016 GIITEM Fund
appropriation.
Additionally, the GIITEM Border Security and Law
Enforcement Subaccount received $559,900 in
criminal fine and fee revenues in the third quarter of
FY 2017, bringing the year-to-date revenue total to
$1.5 million. DPS expended $612,800 in the third
quarter for grants to 9 local law enforcement
agencies and the Arizona Department of
Corrections for detention liaison officers, GIITEM
Border District positions, and other border security
purposes. (Eric Billings)

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 2017

May Spending
May 2017 General Fund spending was $636.6 million,
which represents a decrease of $(9.4) million below
May 2016. (See Tables 8 & 9). Year-to-date, General
Fund spending is $8.88 billion, or $163.9 million above
the prior year.

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

YTD Change

May 17

May 16

Year-to-Date

from FY 16

AHCCCS

178.2

89.0

1,604.3

524.7

Corrections

85.4

1.1

945.3

(9.4)

Child Safety

24.4

(9.4)

344.7

(43.6)

Economic Security

8.2

(29.7)

508.6

31.3

Agency

Education

239.3

13.8

3,810.6

151.1

Health Serv ices

7.0

(4.1)

78.4

(509.3)

Public Safety

2.7

0.9

107.9

19.6

School Facilities Board

0.1

(0.2)

213.8

23.2

Univ ersities

55.4

(72.5)

637.4

(76.5)

Leaseback Debt Serv ice

0.0

0.0

84.1

0.0

Other

35.9

1.7

543.4

52.8

Total

636.6

(9.4)

8,878.5

163.9

11

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 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

May 17
1,898.4
61.4
8.9
958.2
178,198.8
1,740.6
72.3

Change from
May 16
(2,631.3)
(9.0)
(8.4)
186.5
88,992.6
(225.3)
3.0

Year-to-Date
32,616.9
84,117.4
798.4
113.9
8,327.3
1,604,314.4
21,124.4
916.1

YTD Change
from FY 16
7,629.6
2.8
0.5
(4.0)
720.8
524,694.6
545.4
(58.1)

24,428.0

(9,406.7)

344,719.5

(43,636.9)

1,791.7
227.8
45.1
85,383.5
225.5
49.2
8,175.7
67.7
239,259.9
576.6
19.1
43.8
53.3
262.6
0.1
1,666.9
125.0
654.9
7,005.8
188.2
66.6
38.6
67.5
389.7

(416.6)
82.7
9.5
1,097.2
(461.4)
49.2
(29,691.0)
(32.7)
13,834.0
(208.9)
5.6
8.8
(6.8)
(7.6)
(168.1)
1,315.5
125.0
(69.7)
(462.3)
(4,088.1)
(28.7)
3.3
38.6
(51.7)
34.4

19,889.6
54,705.3
759.1
945,285.9
14,000.5
19,908.0
549.2
508,593.2
829.9
3,810,592.7
7,398.4
2,823.6
171.7
507.7
687.4
2,604.3
(2.2)
9,912.3
1,979.5
8,380.4
78,415.9
2,959.5
743.1
798.3
967.2
4,568.9

(4,626.7)
3,136.4
216.2
(9,432.3)
8,000.0
(2,058.4)
549.2
31,344.6
(278.9)
151,100.7
(2,633.3)
(4,176.4)
(6.1)
18.5
(144.6)
(122.9)
(2,022.4)
2,485.8
185.1
(883.2)
(1,053.0)
(509,339.4)
(12.5)
(89.1)
798.3
(689.1)
(58.3)

12,524.7
1,058.9
1,425.2

1,645.6
(141.0)
(268.7)

93,348.0
12,712.8
20,465.5

5,206.3
(247.5)
(1,712.1)

12

JLBC – MONTHLY FISCAL HIGHLIGHTS – JUNE 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
Department of Weights & Measures
Other - State Treasurer/JP Salaries
Other - ADOT Capital (Navajo Nation Projects)
Other - ADOT Capital (Local HURF Distribution)
Other
Total

May 17
2,083.3

Change from
May 16
1,441.4

Year-to-Date
10,599.9

YTD Change
from FY 16
776.7

1,612.3
1,011.0
165.3
388.2
727.6
86.4
8.4
4.8
2,704.0
35.9
177.7
1,306.4
104.3
603.4
17.5
4.9

1,897.5
32.4
3.5
5.3
77.2
(1.8)
0.1
4.8
868.9
35.4
(16.5)
688.2
(239.1)
(485.5)
17.5
(1.1)

18,142.0
12,332.4
2,088.3
5,979.2
8,279.7
1,040.8
117.7
20,449.0
1,396.8
107,869.1
6,000.0
1,558.6
2,252.6
27,687.5
213,771.7
24,253.6
248.3
7,112.0
38.0
44.6

1,410.0
(456.6)
4.6
324.5
1,020.1
(0.1)
7.7
(2.5)
(417.8)
19,591.0
(36.6)
0.6
(759.6)
23,169.1
11,881.0
23.5
8.3
30.9
(2.2)

(11.7)
25,494.7
8,439.7
21,457.6
435.4
936.1
51.8
636,605.1

(699.3)
(81,638.5)
2,487.8
7,377.3
(151.5)
(113.3)
(4.2)
(24.2)
(9,390.1)

35,620.4
272,960.3
92,787.3
236,033.5
5,300.2
9,859.3
0.8
1,028.0
1,500.0
30,000.0
497.6
8,878,453.2

14,379.4
(90,969.2)
(2,178.4)
2,220.9
163.4
(327.4)
(1,061.4)
(130.0)
1,500.0
30,000.0
360.8
163,880.4

JLBC
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-17

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

Jul-15

Jan 08

$23

$25.25 / Hour
(April 2017)

$20

$19

5.6% Y/Y Growth
(April 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

Jan 09

July 08

$21

Jan-16

Jan 07
July 07

$ / Hour
$22

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

Year Over Year Growth (%)

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

Page:
Thousands of Jobs

June 2017
Appendix A

1

JLBC

Average Hourly Earnings – Private Sector

$27

3

JLBC

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
Year Over Year Growth (%)

Arizona Economic Trends

Total Non-Farm Employment

2,900

2,800

2,700

2,600

2,500

2,400

2,300

2,200

$24

$22.73 / Hour
(Octoberjobs
2014)
2,747,000
(May 2017)

2,100

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

1.8% Y/Y Growth
(May 2017)

2

$26

Initial Claims for Unemployment Insurance

$25

45,000

40,000

35,000

30,000

23,124 Claims
(April 2017)

25,000

20,000

15,000

10,000

5,000

Not seasonally adjusted

4

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

JLBC
Excludes temporary 1 ¢ sales tax

60,000

50,000

12-Month Moving Sum
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

Jul 14

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

2.3% Y/Y Growth
(April 2017)

5

Residential Building Permits

100,000

90,000

80,000

70,000

Single Family Unit - 24,943 Permits
Multi-Family Unit - 12,025 Permits
(April 2017)

40,000

30,000

20,000

10,000

0

7

JLBC
Jan 08

Excludes temporary 1 ¢ sales tax

Jul 15

Jan 17

Jul 16

Jan 16

Jan 08

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

$50

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

40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
Jan 07

$100

July 07

$210.7 million
(April 2017)
July 06

$ in Millions

$175

July 07

Jul 16
Jan 17

$200

Jan 07

Jul 15
Jan 16

$ in Millions
$225

July 06

Year Over Year Growth (%)

Jan 17

Jul 16

Jan 16

Jul 14
Jan 15

$125

Jul 15

Jan 15

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 14

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

JLBC
Jan 07

July 06

Year Over Year Growth (%)

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

$250
$100

$75

$40.0 million
(April 2017)

$150
$25

$0

18.6% Y/Y Growth
(April 2017)

6