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…FY 2018
General Fund
revenues are
6.2% above
the prior year
and are $261.7
million above
forecast.”

April 2018

Summary
March General Fund revenue collections of
$531.1 million were (5.5)% below the prior
year and $(1.6) million below forecast.

year’s results. The Department of Revenue,
however, will probably continue to process
refunds for another 6 weeks.

Sales, Individual Income and Corporate
Income Taxes all posted healthy gains over
March 2017. Insurance Premium Taxes (IPT),
however, declined sharply from March
2017. The IPT losses are likely due to a timing
issue and are expected to be recouped in
April.

April FAC Summary
The Finance Advisory Committee (FAC) met on
April 11, 2018 to update its 4-sector revenue
forecast. The FAC is a 13-member panel of
private and public-sector economists and their
views serve as one of the 4 equal inputs into
JLBC’s Baseline revenue forecast. The remaining
3 inputs are the JLBC Staff forecast and 2
University of Arizona (UA) econometric models.

Year-to-date, excluding Urban Revenue
Sharing and one-time fund transfers, FY 2018
General Fund revenues are 6.2% above the
prior year and are $261.7 million above
forecast.
As we have described in prior reports, the
large year-to-date forecast gain has been
driven by a 56.7% increase in Individual
Income Tax payments in December and
January. In part, this increase may be due to
tax filers increasing payments prior to the
cap of State and Local Tax (SALT)
deductions taking place in federal Tax Year
2018. While taxpayers may have paid early
so as to benefit their federal return, the
underlying state income tax liability has not
changed. As a result, the early payments
may be accompanied by larger than
expected refunds this spring.
Given that we are in the middle of tax filing
season, we are not yet able to make any
definitive conclusions about the growth
pattern in refunds. So far in filing season,
refunds are not significantly outpacing last

The FAC heard presentations on General Fund
Revenue collections, the U.S. and Arizona
economy, and state cash flows. The JLBC Staff
provided members with revised FY 2018 – FY
2021 revenue estimates based on the updated
April 4-sector revenue forecast.
In comparison to the January base revenue
forecast, the April FAC projections are
significantly higher for FY 2018, increasing from
4.3% to 5.6%. In part, this revision reflects the
growth in Individual Income Tax payments
discussed above. The projected revenue
growth rates for FY 2019 through FY 2021 were
largely unchanged (See Table 1).
Based on year-to-date growth, legislative
budget discussions had already envisioned
incorporating most of this forecast revision. The
updated 4-sector April forecast would raise the
projection by another $51 million.

Table of Contents

This report has been
prepared for the Arizona
Legislature by the Joint
Legislative Budget
Committee Staff on
April 20, 2018.

Summary

Summary of Recent Agency Reports

• April FAC Summary ............................................ 1

• AHCCCS – CMDP Report ...................................9

• Classroom Site Fund Report.............................. 2

• Attorney General – ICAC Report......................9

March Revenues .................................................... 2

• Attorney General – Legal Settlements ............9

Monthly Indicators ................................................. 5

• Aud. General – AZ Families FIRST Report .......10

JLBC Summary ........................................................ 8

• DCS – Monthly Hiring Report............................10

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

2

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018

Summary (Continued)
Table 1

Comparison of January and April FAC Forecasts
FY 18
January
April

4.3%
5.6%

FY 19

FY 20

FY 21

3.6%
3.7%

4.3%
4.2%

4.5%
4.5%

pupil amount anticipated for FY 2018 because of
projected growth in Proposition 301 sales tax revenues
and land trust earnings for FY 2019.

Classroom Site Fund Report
The JLBC Staff is required to annually determine by
March 30 of each year the estimated K-12 Classroom
Site Fund (CSF) per pupil amount for the upcoming
budget year. The CSF is funded from the Proposition 301
0.6¢ sales tax and from K-12 trust land endowment
earnings.
Under these parameters, public schools will receive $423
per weighted pupil from the CSF for FY 2019. The $423
per pupil amount would be higher than the $386 per

March Revenues
Table 2

General Fund Revenues ($ in Millions)

March
Year-to-Date

FY 2018
Collections
$
531.1
$ 6,867.1

Sales Tax collections of $381.0 million were 8.0% above
March of last year and $0.5 million above the forecast
for the month. March tax collections reflect sales
activities that occurred in February. Year-to-date,
collections are up by 6.4% and are $56.1 million above
forecast.
Sales tax collections by category for March are shown
in Table 3. The 5 major categories of the state’s sales
tax shown in the table account for approximately 90%
of total collections.
Table 3

Sales Tax Growth Rates
Compared to Prior Year

Retail
Contracting
Use
Restaurant & Bar
Utilities

March
6.8%
15.9%
9.7%
7.6%
5.1%

YTD
4.9%
14.3%
9.1%
6.2%
2.7%

Difference From
Enacted Forecast
$
(1.6)
$ 261.7

Difference
From FY 2017
$ (30.6)
$ 420.5

Individual Income Tax net revenues of $123.0 million in
March were $17.2 million more than in the prior year
and $0.3 million above the forecast for the month.
Year-to-date, revenue has grown 10.4% over the prior
year.
As indicated in Table 4, March withholding revenues
increased by 2.5% from last year and were $(2.7)
million below the forecast. Year-to-date withholding
collections are 6.1% above FY 2017.
March estimated and final payments of $77.1 million
were 11.8% above last year and $4.7 million above
the forecast. Year-to-date, payments are 27.2%
above FY 2017 and $142.6 million above the forecast.
As discussed more in previous issues of the Monthly
Fiscal Highlights, there are several potential reasons for
the large year-to-date increase in payments, such as
a recent federal limit placed on State and Local Tax

3

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018

March Revenues (Continued)
deductions and strong stock market growth in 2017. The
primary cause of high year-to-date payment growth
may not be clear until the April tax season concludes.
March Individual Income Tax refunds totaled $(342.3)
million – this compares to $(341.9) million in March 2017
and a forecasted amount of $(340.6) million. Year to
date, refunds are $23.1 million higher than expected.
Table 4

Individual Income Tax Growth Rates
Compared to Prior Year
March
YTD
Withholding
2.5%
6.1%
Estimated/Final Payments
11.8%
27.2%
Refunds
0.1%
7.2%
Corporate Income Tax net collections were $22.0 million
in March, which was $2.3 million more than in the prior
year and $(8.2) million below the forecast. Year-to-date,
collections are $(11.0) million below prior year collections
and $12.7 million above the enacted forecast.
Insurance Premium Tax collections of $44.2 million in
March were (62.7)% below the prior year. Much of this
decline is likely due to a timing issue in which collections
received in March were recorded in the state's
accounting system in April. Year-to-date, collections are
(23.7)% below last year and $(4.7) million below the
forecast.
The Lottery Commission reports that March ticket sales
were $100.0 million, which is $16.4 million, or 19.6%,
above sales in March 2017. Much of the growth in ticket
sales was in the Mega Millions and Powerball games,
which each had large jackpots during the month. Yearto-date sales are 18.7% above the prior year. In terms of
General Fund collections, year-to-date lottery revenues
are $6.6 million above the prior year and $6.2 million
above the forecast.
Highway User Revenue Fund (HURF) collections of $117.8
million in March were up 1.1% compared to March of last
year and were $(3.3) million below forecast. Year-todate collections are 3.6% above last year.
Due to delays in reporting final February revenues for
various revenues sources, DOR has made technical
adjustments to prior month collection figures. For March,
DOR has increased the amount of prior General Fund
revenue collections by $5.5 million, and the adjustment
has been included in the reported year-to-date results.

4
Table 5

General Fund Revenue:

Change from Previous Year and Budget Forecast
March 2018
Current Month

FY 2018 YTD (Nine Months)

Change From
Actual

March 2017

March 2018

Amount

Change from
Actual

Baseline Forecast
Percent

Amount

Percent

March 2017

Baseline Forecast

March 2018

Amount

$3,521,549,267

$210,641,333

$56,107,355

1.6 %

3,190,878,750

301,370,537

10.4

194,151,942

6.5

(11,035,620)

(5.7)

12,675,454

7.4

423,335

1.9

(560,997)

(3.3)

Percent

Amount

Percent

Taxes
Sales and Use
Income - Individual
- Corporate
Property
Luxury - Tobacco
- Liquor
Insurance Premium
Other Taxes
Sub-Total Taxes

$381,015,049

$28,089,701

123,022,855

17,208,940

16.3

22,020,857

2,296,347

11.6

181,881

(433,187)

8.0 %

(70.4)

$554,498
330,096
(8,213,549)
608,178

0.1 %
0.3
(27.2)

182,849,867

--

22,443,248

1,698,895

149,711

9.7

0

0.0

16,379,289

3,027,030

218,380

7.8

0

0.0

26,678,936

(62.7)

2,850,030

6.9

257,276,024

55.6

1,812,854

44,243,335
1,877,368
$577,087,271

(74,344,369)
671,074
($26,143,404)

(4.3) %

($2,057,892)

-(0.4) %

1,002,411
(220,938)
1,254,756
(80,002,702)

4,768,705

2,178,569

$7,222,824,085

$425,188,346

6.4 %

4.7
(1.3)
4.9

1,000,004

3.9

(23.7)

(4,730,675)

(1.8)

84.1

2,771,663

6.3 %

$261,838,080

138.8
3.8 %

Other Revenue
Lottery
License, Fees and Permits
Interest

0

0

4,399,889

568,564

14.8

354,576

0

-8.8

51,316,237

6,579,894

14.7

6,193,204

13.7

30,881,527

2,069,490

7.2

3,223,419

11.7

167,671

187.6

(11,788)

162.8

(242,952)

--

257,071

Sales and Services

1,620,642

(432,107)

(21.1)

(178,885)

(9.9)

23,913,405

(14,371)

(0.1)

(539,735)

(2.2)

Other Miscellaneous

4,965,152

(2,007,262)

(28.8)

83.4

17,704,048

(9,136,370)

(34.0)

(12,240,304)

(40.9)

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

(19,028)

--

0
(251,082)

0
(1,166,464)

---

$10,715,573

($3,049,057)

(22.2) %

$587,802,844

($29,192,461)

(4.7) %

2,258,193

--

0

0

(1,740,738)

0

--

29,859,430

8,820,701

$450,194

4.4 %

$153,931,717

$8,487,015

5.8 %

(0.3) %

$7,376,755,802

$433,675,361

6.2 %

($1,607,699)

-41.9

(534,350)

0

(67.5)

--

3,757,776

14.4

($139,989)

(0.1) %

$261,698,091

3.7 %

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

(56,730,840)
0
(56,730,840)
$531,072,004

(1,432,326)

0

(0.0)

--

0

--

(1,432,326)

2.6 %

0

(0.0) %

($30,624,788)

(5.5) %

($1,607,699)

(0.3) %

$6,867,078,242

1.1 %

($3,341,721)

(2.8) %

$1,077,033,848

0

2.6

(510,577,560)
900,000
(509,677,560)

(12,890,934)
(291,548)
(13,182,482)

2.6
(24.5)

0

(0.0)

0

0.0

2.7 %

0

(0.0) %

$420,492,879

6.5 %

$261,698,091

4.0 %

$36,972,784

3.6 %

Non-General Funds
Highway User Revenue Fund

$117,774,893

$1,252,474

($3,556,145)

(0.3) %

5

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018

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 2.9% in the
fourth quarter of 2017. This quarterly growth follows on
+3% growth during the prior 2 quarters. Growth during
the period was led by increases in consumer purchases
of durable goods and business and residential
investment. Additionally, growth of government
spending accelerated to its highest rate since the
second quarter of 2015.
The Conference Board’s U.S. Consumer Confidence
Index decreased by (1.8)% in March. The latest reading
is 2.2% above the index in March 2017, but fell slightly
from its 17 year high of 130.0 in February. The decrease
in March largely reflected a downward revision in
consumer expectations about the economy for the
coming months. Despite the decline, overall confidence
remains relatively high. The percentage of surveyed
individuals that think jobs are currently plentiful minus the
percent that think jobs are scarce rose from 24.9% to
25.0% during the month, which was the highest reading
since 2001. Economists expect that volatile stock market
performance that followed the March survey's
completion may restrain the index in April.
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
February. Monthly growth was led by 0.2% growth in
core inflation (all items less food and energy). This was
partly offset by price decreases of (0.1)% in the food and
energy categories. The index’s year-over-year growth
rate increased from 1.7% in January to 1.8% in February.
That rate is approaching the Federal Reserve Bank’s
(Fed) 2.0% annual inflation target.
Consumer prices, as measured by the U.S. Consumer
Price Index (CPI), decreased (0.1)% in March and
increased 2.4% above March 2018 prices. A (4.9)%
decrease in the gasoline index was the main negative
contributor to the monthly decrease. Positive
contributors, such as the indexes for shelter, medical
care and food, were not strong enough to offset the
gasoline index effect. Core inflation (all items less food
and energy) increased 0.2% for the month, along with
increases in the indexes for personal care, motor vehicle
insurance and airline fares, as well as those mentioned
above. The indexes for apparel, communication and
used vehicles saw decreases for the month.
The Conference Board's U.S. Leading Economic Index
increased 0.6% in February to 108.7 and stands 6.5%
above its February 2017 reading. The strongest positive

contributor for the month was the average
manufacturing workweek index, followed by the
indexes for average weekly initial claims and Institute
for Supply Management (ISM) new orders. These
increases more than offset declines in the indexes for
stock prices and building permits. Of the index's 10
components, 8 made positive contributions for the
month.
ARIZONA
Housing
Single-family housing construction is increasing. In
February, Arizona’s 12-month total of single-family
building permits was 28,130, or 14.8% more than a year
ago. The comparable single-family permit growth rate
for the entire U.S. was 9.5%.
The 12-month total of multi-family building permits has
been up and down. In February, Arizona’s total of
11,100 multi-family building permits was 3.3% more than
in 2017. Nationwide multi-family permits were 3.0%
more than in 2017.
Tourism
Revenue per available room was $111.95 in February,
which was 7.0% above the amount in February 2017.
Ridership through Phoenix Sky Harbor Airport during the
month was up 3.2% compared to February 2017.
Employment
According to the latest employment report released by
the Office of Economic Opportunity (OEO), the state
added 12,300 net new nonfarm jobs in March
compared to the prior month. This was more than the
10-year average net job gain for March of 8,000 jobs.
Most of the month-over-month job gains occurred in
the Leisure and Hospitality sector (+7,100), followed by
the Trade, Transportation and Utilities sector (+2,000)
Compared to the same month in the prior year,
Arizona added 68,600 net new jobs in March, which is a
year-over-year increase of 2.5%. This was the largest
such gain since July 2017. The largest year-over-year
job gains in March came from the following industries:
Education and Health Services (+14,300), Trade,
Transportation and Utilities (+10,800) and Construction
(+10,800).
The state’s regular unemployment rate remained
unchanged at 4.9% in March. The U.S. unemployment
rate was 4.1% in March, the same jobless rate as in the
prior 5 months.

6

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018

Monthly Indicators (Continued)
In February, the Average Weekly Hours worked by
individuals in Arizona’s private sector was 34.7 hours.
This workload was (0.3)% below the level during the prior
month, but 1.5% above the level in February 2017.
The Average Hourly Earnings received by private sector
workers was $25.75, which is (0.1)% below the average
in the prior month. Year-over-year growth in earnings
slowed from 3.4% in January to 2.8% in February.
The U.S. Department of Commerce Bureau of Economic
Analysis quarterly releases estimates of annual Personal
Income received in each state. This measure includes
wages and salaries, proprietors’ income, dividends,
interest, rent, and various supplements to income while
excluding capital gains, contributions for government
social insurance, and pension benefit payments.
In the fourth quarter of 2017, Arizona personal income
increased year-over-year by 5.6%, to $298.0 billion. That
was the third highest growth rate of any state during the
time period. The largest component of personal
income, wages and salaries, grew 6.7%. This rate
reflects an acceleration from growth of 3.0% and 3.8%
during the third and second quarters of 2017,
respectively. The higher wage and salary data appears
to be consistent with growth of 5.7% in average hourly
earnings and growth of 5.6% in withholding collections
during the same quarter.
State Agency Data
At the beginning of April 2018, the total AHCCCS
caseload was 1.80 million members. Since the federal
health care expansion in January 2014, the overall
AHCCCS population has grown by 540,100 members.
Total monthly enrollment increased by 3,300 during
March but was (3.8)% lower than a year ago. The
monthly increase was partly concentrated in the
Traditional population of low income parents and
children. This population grew 2,300, or 0.2% from the
prior month. Parent and child enrollment in the
Traditional population is (6.1)% lower than a year ago.
Laws 2016, Chapter 112 reopened enrollment in
KidsCare program in September 1, 2016. Following the
enrollment freeze in January 2010, the KidsCare
caseload had dropped to 500 members by August
2016. Through April 1, 2018, enrollment in the program
was 27,900, or 2,700 more than the prior month’s
enrollment.
In January 2014, the state started accepting new
enrollment to the Proposition 204 childless adults
program. In March 2018, the childless adult population

decreased by (300), or (0.1)%. At 305,300, this
population is (3.8)% lower than a year ago.
The state also opted to expand adult Medicaid
coverage to 133% of FPL. Their enrollment decreased
by (500) in March and now totals 76,600 individuals.
Enrollment is (6.6)% lower than a year ago. The
federal share of this population's cost decreased from
95% to 94% in January 2018.
There were 15,090 TANF recipients in the state in
March, representing a (3.1)% monthly caseload
decrease from February. The year-over-year number
of TANF recipients has declined by (15.2)%. The
statutory lifetime limit on cash assistance is 24 months.
The Supplemental Nutrition Assistance Program
(SNAP), formerly known as Food Stamps, provides
assistance to low-income households to purchase
food. In March, 849,249 people received food stamp
assistance in the state, representing a 0.4% increase
over February. Compared to March 2017, the level of
food stamp participation has declined by (8.2)%.
The inmate population was 41,888 as of March 31,
2018. This is a 0.4% increase since February, and a
(1.1)% decrease since last March.
Based on information the Department of Child Safety
provided for February 2018, reports of child
maltreatment totaled 47,487 over the last 12 months,
a decrease of (0.3)% over the prior year. There were
15,139 children in out-of-home care as of January
2018, or (11.9)% less than in January 2017. Compared
to the prior month, the number of out-of-home
children increased by 0.1%.
According to the most recent information from the
Administrative Office of the Courts, the Maricopa
County probation caseload was 28,628 as of February
2018. This was an increase of 101 above the prior
month, and a 579 increase since last February. In
addition, the state’s non-Maricopa County probation
caseload was 19,068. This was a decrease of (59)
below the prior month, and a decrease of (10) since
last February. These figures represent standard and
intensive probation caseloads, including both adult
and juvenile probation.

7

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018
Table 6

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
Building
- Residential Building Permits (12month 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 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 (2016 = 100)
- Consumer Price Index, SA (1982-84 = 100)
- Personal Consumption Price Index (2009 = 100)

MONTHLY INDICATORS

Change From
Prior Period

Change From
Prior Year

Time Period

Current Value

March
4th Q 2017

4.9%
9.5%

0.0%
(0.4)%

(0.2)%
(1.3)%

March
February
March
March
March
February
February

16,525
20,475
2,838,100
170,400
151,600
34.7
$25.75

16.1%
(6.1)%
0.4%
0.6%
0.6%
(0.3)%
(0.1)%

(7.4)%
(12.3)%
2.5%
5.5%
7.7%
1.5%
2.8%

February
February

28,130
11,100

February

6,765

February
January
February
February

$269,000
174.38
3,014
21,771

January
December
February
February

3,461,583
792,536
280,299
$111.95

(3.4)%
(14.3)%
0.8%
38.3%

3.2%
22.7%
7.8%
7.0%

3.2%
$298.0 billion
7,016,270

(1.5)%
1.3%
N/A

(1.1)%
5.6%
1.6%

May
May

AA / Aa2
Stable

N/A
N/A

N/A
N/A

April 1st

1,798,258
1,033,088
305,252
181,278
76,568
27,863
61,623
112,586

0.2%
0.2%
(0.1)%
(0.3)%
(0.7)%
10.8%
0.5%
(0.6)%

(3.8)%
(6.1)%
(3.8)%
5.2%
(6.6)%
61.3%
3.9%
(6.9)%

February
January

47,487
15,139

0.1%
0.1%

(0.3)%
(11.9)%

March
March

1,316
41,888

11
0.4%

(38)
(1.1)%

March
March

15,090
849,249

(3.1)%
0.4%

(15.2)%
(8.2)%

February
February

19,068
28,628

January
4th Q 2017
July 2017

4th Q, 2017 (3rd
Estimate)
March
February
March
February

0.7%
4.6%

14.8%
3.3%

27.3%

2.1%

0.0%
0.3%
(0.5)%
0.5%

9.4%
5.9%
(5.4)%
(12.1)%

(59)
101

(10)
579

$17.3 trillion

2.6%

2.9%

127.7
108.7
249.5
114.3

(1.8)%
0.6%
(0.1)%
0.2%

2.2%
6.5%
2.4%
1.8%

8

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018

JLBC Summary
At its April 18, 2018 meeting, the Joint Legislative
Budget Committee considered the following issues:
Arizona Department of Environmental Quality –
Review of Vehicle Emissions Contract Modifications –
The Committee gave a favorable review to the
modifications to the vehicle emissions inspection
contract with Gordon Darby. ADEQ did not seek
Committee review prior to implementing the
contract amendments. The favorable review
included provisions requiring ADEQ to report to the
Committee on how it will revise procedures to ensure
timely submissions to the Committee for all JLBC
requirements.
Department of Child Safety – Review of Line Item
Transfers – The Committee gave a favorable review
of General Fund and Expenditure Authority line item
transfers for FY 2018. The transfers include a $7.7
million General Fund transfer into the Adoption
Services line item in FY 2018 to address higher-thanbudgeted caseload growth in FY 2018. Most of the
transfer would be financed from reductions in Foster
Home Placement expenditures associated with
declining Out-of-Home caseloads. Also included is a
transfer of $1.5 million into In-Home mitigation from
Out-of-Home Support Services to use federal monies
on in-home services.
Department of Child Safety – Review of FY 2018 Third
Quarter Benchmarks – The Committee gave a
favorable review of the report assessing DCS’
progress towards meeting benchmarks for the
number of caseworkers, caseload standards, the
number of backlog cases and open reports, and for
reducing the number of children in out-of-home
care.
Arizona Department of Administration – Review of
Emergency Telecommunication Services Revolving
Fund Expenditure Plan – The Committee gave a
favorable review of the FY 2018 expenditure plan of
$18.0 million from the Emergency
Telecommunication Services Revolving Fund,
including $8.6 million for wireless services, $8.5 million
for wire services, and $900,000 for administrative
costs.
Arizona Department of Administration/Arizona State
Lottery Commission – Review of Server Migration and
Hardware Refresh (Automation Projects Fund) – The
Committee gave a favorable review of the FY 2018
expenditure plan of $597,400, including $472,400 for
server migration and $125,000 for a hardware refresh.
The favorable review included provisions stating that
a favorable review does not commit the Legislature

to ongoing funding. Another provision requires the
Lottery to submit a Project Investment Justification
(PIJ) to ADOA Arizona Strategic Enterprise
Technology Office (ASET) for review and approval
prior to expending any monies.
Department of Economic Security – Review of
Information Technology Security Plan (Automation
Projects Fund) – The Committee gave a favorable
review of $1.1 million in proposed expenditures for
information technology security addressing 4 areas of
concern identified in an April 2017 Auditor General
report: employee access, data security, external
access, and email threats. DES will not spend the
remaining $987,400 of the total $2.2 million
appropriation.
Arizona Department of Education – Review of State
Aid Correction for Chino Valley Unified – The
Committee gave a favorable review of the
expenditure plan providing the Chino Valley Unified
School District (VCUSD) with $143,500 in corrected
state aid funding due to a settlement in Arizona Tax
Court regarding property taxes paid in prior years by
Drake Cement, LLC.
Arizona Department of Education – Review of Joint
Technical Education District Quarterly and Annual
Reports – The Committee gave a favorable review of
ADE's December 2017 quarterly JTED report and FY
2017 annual JTED report.
Northern Arizona University – Review of Expenditure
and Performance Report of Nonprofit Biotechnology
Research Appropriation – The Committee gave a
favorable review of NAU's report on the expenditures
and performance of its grant recipient, Translational
Genomics Research Institute (TGen). NAU receives
$3.0 million annually from the General Fund, which it
then grants to TGen. The majority of the funding
($1.7 million) was used on research capital in 2017,
which is used to support projects funded by other
grants. In 2017, TGen report receiving 22 grants,
publishing 128 academic articles, and being
awarded 12 patents.

9

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018

Summary of Recent Agency Reports
Arizona Health Care Cost Containment System –
Quarterly Report on the Comprehensive Medical
and Dental Program (CMDP) – Pursuant to Laws 2016,
Chapter 273, the Arizona Health Care Cost
Containment System (AHCCCS) is required to report
quarterly on the financial and program
accountability trends of CMDP, the foster care
medical program. AHCCCS’ most recent report
covers State Fiscal Year 2017. AHCCCS reports the
following findings:
•
•

•

The percentage of CMDP children receiving
behavioral health services in June 2017 was
73.2%.
The services utilized by the highest percentage of
CMDP members using services in June 2017
included support services (95.6%), treatment
services (52.9%), and rehabilitation services
(15.8%). Support services for foster children
include case management, peer support, and
transportation to appointments. Treatment
services include individual and group counseling
as well as behavioral health diagnostic
evaluations. Rehabilitation services include living
skills training, cognitive rehabilitation (such as
memory training or anger management), and
behavioral health education and prevention
activities.
The services that accounted for the greatest
share of CMDP program costs in June 2017
included support services (39%), treatment
services (19%), and inpatient services (14)%.
Inpatient services primarily consist of inpatient
psychiatric services provided by hospitals.
(Patrick Moran)

Attorney General – Quarterly Report on Internet
Crimes Against Children Enforcement Fund
Expenditures – A.R.S. § 41-199 requires the Attorney
General (AG) to report quarterly on expenditures
from the Internet Crimes Against Children (ICAC)
Enforcement Fund and progress made towards ICAC
goals. The ICAC Enforcement Fund receives an
annual deposit of $900,000 in revenues from lottery
games that are sold from a vending machine in agerestricted areas. Monies in the fund are utilized to
support the ICAC Task Force, housed within the
Phoenix Police Department, which works with
federal, state, and local law enforcement to
investigate technology-facilitated sexual exploitation
of children.
Through the third quarter of FY 2018, $450,000 in
lottery revenues have been deposited into the ICAC
Enforcement Fund. A total of $74,900 was expended
in the third quarter of FY 2018 to help pay for the

operating costs of the ICAC Task Force. These
expenditures are in addition to $428,600 expended in
previous quarters, bringing total FY 2018 expenditures
to $503,600.
The FY 2018 expenditure plan for the ICAC
Enforcement Fund allocates monies to fund 4
positions within the Phoenix Police Department;
equipment costs including cameras, computers,
subscriptions to forensic tools, and other information
technology equipment; and law enforcement
training.
As of March 31, 2018, the ICAC Enforcement Fund
had a fund balance of $2.0 million and
encumbrances of $692,000. (Sam Beres)
Attorney General – Quarterly Reports on Legal
Settlements – Statute requires the Attorney General
(AG) to report quarterly to the JLBC on the receipts
to, and disbursements from, the Antitrust
Enforcement Revolving Fund, the Consumer
Protection - Consumer Fraud (CPCF) Revolving Fund
and the Consumer Restitution and Remediation
Revolving Fund (including its 2 subaccounts), as well
as deposits made to the General Fund.
In the third quarter of FY 2018, the AG deposited a
total of $2.0 million into various consumer accounts.
Of that amount, $1.5 million was deposited into the
CPCF Revolving Fund, $361,300 into the Consumer
Restitution Subaccount, and $87,400 into the
Consumer Remediation Subaccount. No monies
were deposited into the Antitrust Enforcement
Revolving Fund or General Fund this quarter. Only
the $87,400 deposit to the Consumer Remediation
Subaccount requires JLBC review prior to
expenditure.
Deposits to the CPCF Revolving Fund
The AG deposited $1.5 million to the appropriated
CPCF Revolving Fund, which may be used for any
purpose permitted by statute. Of this amount, $1.0
million was derived from a settlement with General
Motors, LLC (GM). The AG had sued GM for its failure
to disclose safety defects. An additional $6.2 million
from this settlement will be paid to a Claims
Administrator to provide restitution to consumers. An
additional $336,800 was derived from a settlement
with Boehringer Ingelheim Pharmaceuticals, Inc.,
which the AG had sued for deceptive practices in
marketing several drugs. The remaining $201,300 in
deposits to the fund were generated from legal
settlements under $250,000.

10

JLBC – MONTHLY FISCAL HIGHLIGHTS – APRIL 2018

Summary of Recent Agency Reports
Deposits to the Consumer Restitution Subaccount
The AG deposited $361,300 to the non-appropriated
Consumer Restitution Subaccount to compensate
specific entities for economic loss resulting from
consumer fraud. The full amount of these deposits
came from legal settlements under $250,000 in interest
income.
Deposits to the Consumer Remediation Subaccount
The AG deposited $87,400 from legal settlements under
$250,000 and interest income to the partiallyappropriated Consumer Remediation Subaccount to
rectify violations of consumer protection laws. An
expenditure plan must be reviewed by the JLBC before
any of these funds are spent from this account. That
review has not yet occurred. (Sam Beres)
Auditor General – Report on Arizona Families F.I.R.S.T. –
Pursuant to the FY 2017 Human Services Budget
Reconciliation Bill (Laws 2016, Chapter 123), the Auditor
General reported on the Department of Child Safety’s
(DCS) Arizona Families F.I.R.S.T. (AFF) program. AFF
provides substance abuse treatment and supportive
services to families for whom substance abuse is a
barrier to permanency.
The Auditor General made the following findings:
•

•

(Continued)

The report recommended that DCS could improve its
oversight by conducting periodic reviews of
underlying documentation for delivered services. DCS
agreed to the auditors' recommendation. (Patrick
Moran)
Department of Child Safety – Monthly Report on Hiring
– Pursuant to an FY 2018 General Appropriation Act
footnote, the Department of Child Safety (DCS)
reported on its progress in hiring and retaining child
safety staff through March 2018. (See Table 7 below.)
The number of direct line child safety staff
(caseworkers, caseworkers in training, caseworkers
awaiting training and hotline staff) was 1,316 in March,
or (90) fewer staff than the number of funded
positions. Most of the difference between funded
positions and filled positions was driven by lower-thanbudgeted staffing of caseworkers. Total direct line
staff increased by 11 positions since February.
There were also 1,412 non-direct line child safety staff
in March, or (99) 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 1 compared to February.
(Patrick Moran)

The AFF program utilizes best practices in rendering
substance abuse treatment services to families
involved with DCS, including family-centered
treatment services, peer recovery coaches, and
motivational interviewing. These best practices are
typically incorporated into DCS' contracts with AFF
providers.
DCS has implemented oversight of the AFF
program, including monthly progress reports,
review of invoices to ensure contractual
compliance, quarterly collaborative meetings with
stakeholders to improve service delivery, and semiannual site visits with AFF providers. Statute also
requires the program to be evaluated annually.
Table 7
DCS Filled FTE Positions as of March 2018
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

March
1,104
65
147
1,316
1,412
2,728

Difference
(86)
(11)
7
(90)
(99)
(189)

JLBC
Jul-16

Jul-17

2.8% Y/Y Growth
(February 2018)

Jan 09

3

JLBC
100%

Jul 05

Jul 16
Jul 17
Jan 18

35,000

Jan 17

40,000

Jul 15

2,200

Jan 16

2,300

Jul 14

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
Jul 17
Jan 18

Thousands of Jobs
2,400

Jan 15

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

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

$20

Jul 04

$25.75 / Hour
(February 2018)

Jan 05

$23

Jul 03

$24

Jan 04

$25

Jul 02

$27

Jan 03

Average Hourly Earnings – Private Sector

Jan 02

1
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
Jul 17
Jan 18

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 (%)

Page:

Jul 01

$26

Total Monthly Claims

April 2018
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
Jul 17
Jan 18

$19

Jan 01

Jan-18

Jul-17

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

Year Over Year Growth (%)

Jan-18

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

Jan-17

Jan 08
July 08

$21

Jan-16

Jan 07
July 07

$ / Hour
$22

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

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)
2,838,100
(March 2018)

2,100

2.5% Y/Y Growth
(March 2018)

JLBC
2

Initial Claims for Unemployment Insurance

45,000

30,000

16,525 Claims
(March 2018)

25,000

20,000

15,000

10,000
5,000

150%

(7.4)% Y/Y Growth
(March 2018)

50%

0%

-50%

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
Jul 17
Jan 18

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

Jul 16

* January 2014 estimate adjusted downward by $30 million to reflect one-time
category shift.

6.8% Y/Y Growth
(March 2018)

5

Residential Building Permits

100,000

90,000

80,000

70,000

Single Family Unit - 28,130 Permits
Multi-Family Unit - 11,100 Permits
(February 2018)

40,000

30,000

20,000

10,000

0

7

JLBC
Jan 08

Jan 09

Excludes temporary 1 ¢ sales tax

Jul 16

Jan 18

Jul 17

Jan 17

Jan 07

Jan 08

Jan 18

Jul 17

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

$ in Millions
$50

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

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

$100

July 06

$196.7 million
(March 2018)

July 08

Jul 17
Jan 18

$175

July 07

Jul 16
Jan 17

$200

Jan 07

Jul 15
Jan 16

$ in Millions
$225

July 06

Year Over Year Growth (%)

Jan 18

Jul 17

Jan 17

Jul 14
Jan 15

$125

Jan 16

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

$35.8 million
(March 2018)

$150
$25

$0

15.9% Y/Y Growth
(March 2018)

6