Arizona state budget and finances

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Arizona budget and finances
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General information
Budget calendar:
Biennial
Fiscal year:
2015
State credit rating:
AA- (as of 2014)
Current governor:
Doug Ducey
Financial figures
Total spending (state and federal funds):
$28.9 billion (estimated for 2014)
Per capita spending:
$4,294 (estimated for 2014)
Total state tax collections:
$13.4 billion (2013)
Per capita tax collections:
$2,030 (2013)
State debt:
$61 billion (as of 2014)
Per capita state debt:
$9,321 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in Arizona
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.
Between fiscal years 2013 and 2014, total government spending in Arizona decreased by approximately $300 million, from $29.2 billion in fiscal year 2013 to an estimated $28.9 billion in 2014. This represents a 1.3 percent decrease. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned Arizona a credit rating of AA-.[1][2][3]
In fiscal year 2014, total estimated spending in Arizona amounted to $28.9 billion. In 2012 Arizona ranked 10th in the nation for the percentage of its revenue comprised of federal aid, which stood at 36.5 percent.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

Total estimated spending in Arizona was $28.9 billion, second-highest among its neighboring states. Arizona's estimated per capita spending was second-lowest at $4,294.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
Arizona $16,068 $12,837 $28,905 6,731,484 $4,294.00
Colorado $22,531 $7,756 $30,287 5,355,866 $5,654.92
Nevada $5,903 $2,823 $8,726 2,839,099 $3,073.51
New Mexico $10,100 $6,126 $16,226 2,085,572 $7,780.12
Utah $9,263 $3,644 $12,907 2,942,902 $4,385.81
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013.
Source: National Association of State Budget Officers

State spending in Arizona can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.[3]

In 2013 the bulk of Arizona's budget was dedicated to Medicaid, which accounted for 29.8 percent of spending, the largest portion among all of its neighboring states. Arizona also dedicated a smaller portion of its budget to K-12 education and transportation than its neighboring states.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
Arizona 18.6% 14.3% 1.2% 29.8% 3.5% 5.6% 27%
Colorado 26% 8.3% 0% 22% 2.6% 8.5% 32.6%
Nevada 22.3% 8.5% 0.6% 22.7% 3.2% 7.4% 35.3%
New Mexico 19.5% 19.3% 1% 25% 2% 5.7% 27.4%
Utah 23.6% 11.5% 0.6% 17.2% 2.1% 10.4% 34.6%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

From 2009 to 2013, the portion of the budget dedicated to Medicaid largely remained the same. The portion dedicated to K-12 education decreased, while the portion dedicated to higher education increased. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percentages)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 18.6% 14.3% 1.2% 29.8% 3.5% 5.6% 27%
2012 19.0% 13.5% 1.0% 32.0% 3.6% 6.4% 24.6%
2011 20.0% 13.9% 0.2% 33.9% 3.5% 6.2% 22.3%
2010 22.0% 12.6% 0.3% 27.7% 3.8% 5.6% 28.0%
2009 23.9% 11.7% 0.4% 29.4% 3.8% 5.9% 24.8%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Population" and "Per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "Population" and "Per capita revenue" have not been abbreviated.[9]

Arizona's total revenue collections in 2013 amounted to $13.4 billion, highest among its neighboring states. Its per capita revenue collections were the lowest among its neighboring states at $2,030.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
Arizona $762,651 $8,206,708 $412,769 $3,397,707 $662,026 $29,829 $13,471,690 6,634,997 $2,030.40
Colorado N/A $4,279,544 $637,707 $5,528,485 $652,180 $147,746 $11,245,662 5,272,086 $2,133.06
Nevada $235,143 $5,468,363 $586,801 N/A N/A $736,319 $7,026,626 2,791,494 $2,517.16
New Mexico $71,587 $2,651,625 $255,968 $1,240,945 $267,457 $713,998 $5,201,580 2,086,895 $2,492.50
Utah N/A $2,739,916 $294,174 $2,852,088 $330,684 $112,050 $6,328,912 2,902,787 $2,180.29
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
Arizona tax collections by source in 2013.
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Sales taxes and gross receipts accounted for the bulk of Arizona's collections at 60.9 percent.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
Arizona 5.66% 60.92% 3.06% 25.22% 4.91% 0.22%
Colorado N/A 38.06% 5.67% 49.16% 5.80% 1.31%
Nevada 3.35% 77.82% 8.35% N/A N/A 10.48%
New Mexico 1.38% 50.98% 4.92% 23.86% 5.14% 13.73%
Utah N/A 43.29% 4.65% 45.06% 5.22% 1.77%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historical Arizona budget and finance information

Fiscal year 2015

DocumentIcon.jpg See budget bill: Fiscal Year 2015 Enacted Budget

Governor Jan Brewer announced her fiscal year 2015 budget proposal on January 17, 2014. Under the governor's proposal, total general fund spending for fiscal year 2015 would have equaled approximately $9.3 billion, including a $50 million deposit into the state's rainy day fund. In addition, Brewer's budget proposal included $37.6 million in "performance funding" for K-12 education.[10]

On April 11, 2014, Brewer signed into law the fiscal year 2015 budget, which included general fund spending totaling $9.2 billion. The enacted budget increased spending by $440.7 million over fiscal year 2014.[10][11]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Arizona had a state debt of approximately $61.1 billion. Its state debt per capita was $9,321. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[12]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
Arizona $61,082,635,000 $9,321 45
Colorado $86,879,414,000 $16,748 19
Nevada $52,838,629,000 $19,152 13
New Mexico $50,137,504,000 $24,041 7
Utah $35,727,752,000 $12,513 37
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: Arizona public pensions and Arizona public employee salaries

Between fiscal years 2008 and 2012, the funded ratio of Arizona's state-administered pension plans decreased from 81.8 percent to 74.3 percent. The state paid 101 percent of its annual required contribution, and as of fiscal year 2012, the pension system's unfunded accrued liability totaled $10.6 billion. This amounted to $1,702 in unfunded liabilities per capita.[13][14]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[15][16]

The table below lists the Standard and Poor's credit ratings for Arizona and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[17]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Arizona AA- AA- AA- AA- AA- AA- AA AA AA AA AA
Colorado AA AA AA AA AA AA AA AA AA- AA- AA-
Nevada AA AA AA AA AA+ AA+ AA+ AA+ AA+ AA AA
New Mexico AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+
Utah AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to the state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[18]

The table below notes what share of Arizona’s general revenues came from the federal government in 2012. That year, Arizona received approximately $10.4 billion in federal aid, 36.5 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[18]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
Arizona $10,394,549 36.46% 10
Colorado $6,310,538 28.84% 35
Nevada $2,798,426 25.48% 44
New Mexico $5,171,367 36.43% 11
Utah $4,481,494 31.61% 31
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Arizona received $6.7 billion in federal stimulus funding between February 2009 and June 2013.[19] [20]

Budget process

Arizona operates on a biennial budget cycle, with each biennium beginning in July. The sequence of key events in the budget process is as follows:[21][22]

  1. Budget instructions are sent to state agencies on June 1 of the year preceding the start of the new biennium
  2. State agencies submit their budget requests to the governor by September 1.
  3. Agency hearings are held in November and December.
  4. The governor submits his or her proposed budget to the state legislature in January.
  5. From January through April, the legislature debates the budget. A simple majority is required to pass a budget.

Arizona is one of 44 states in which the governor has line item veto authority.[22]

The governor is required by law to submit a balanced budget to the legislature. In turn, the legislature is legally required to pass a balanced budget.[22]

Agencies, offices and committees

The following standing committees in the Arizona State Legislature deal with budget and finance matters:

  1. Appropriations Committee, Arizona House of Representatives
  2. Appropriations Committee, Arizona State Senate
  3. Finance Committee, Arizona State Senate
  4. State Debt and Budget Reform Committee, Arizona State Senate
  5. Ways and Means Committee, Arizona House of Representatives

The Arizona Treasurer is the chief banker and investment officer of the state of Arizona. The treasurer oversees the state's investments and bank accounts. The treasurer is elected in partisan midterm elections for a term of four years.[23]

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[24] According to the report, Arizona received a grade of B and a numerical score of 84, indicating that Arizona was "advancing." in terms of transparency regarding state spending.[24]

Budget and finance ballot measures

Voting on
state and local
government budgets,
spending and finance
State finance.jpg
Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
See also: Spending and finance on the ballot and List of Arizona ballot measures

Ballotpedia has tracked the following ballot measures relating to state and local budget and financial matters in Arizona.

  1. Arizona Adjustment of Expenditure Limitation Bases, Proposition 102 (1986)
  2. Arizona All Revenues to State Treasury, Proposition 1 (September 1922)
  3. Arizona City or Town Debt, Proposition 101 (1990)
  4. Arizona Commissioner of State Finance, Proposition 8 (1928)
  5. Arizona Debt Restrictions Amendment, Proposition 100 (October 1965)
  6. Arizona Department of Finance, Proposition 3 (1952)
  7. Arizona Expenditure Limitations for School Districts, Proposition 101 (1986)
  8. Arizona First Things First Program Repeal, Proposition 302 (2010)
  9. Arizona Gasoline Tax Revenues Distributed Amongst Cities, Proposition 9 (1940)
  10. Arizona Land Conservation Fund Transfer, Proposition 301 (2010)
  11. Arizona Legislative Approval of Expenditures Amendment, Proposition 101 (1984)
  12. Arizona Limiting State Appropriations Amendment, Proposition 101 (1978)
  13. Arizona Local Debt Limit Amendment, Questions 107 and 108 (1912)
  14. Arizona Local Debt Limits Amendment, Proposition 106 (1972)
  15. Arizona Local Spending Adjustment Amendment, Proposition 104 (1992)
  16. Arizona Maximum County Appropriation from Public Funds, Proposition 2 (1932)
  17. Arizona Maximum State Appropriation from Public Funds, Proposition 1 (1932)
  18. Arizona Permanent Funds Amendment, Proposition 118 (2012)
  19. Arizona Public Debt, Revenue and Taxation, Proposition 104 (1988)
  20. Arizona Removal of School Attendance Requirement for State Money, Proposition 4 (September 1953)
  21. Arizona School District Debt Limit Amendment, Proposition 103 (1974)
  22. Arizona School District Debt Limits Amendment, Proposition 100 (1978)
  23. Arizona State Appropriation of Receipts from Sale of Public Land, Proposition 2 (1927)
  24. Arizona State Appropriations Limitation Amendment, Proposition 106 (1974)
  25. Arizona State School Trust Land Revenues, Proposition 300 (2002)

Recent news

This section displays the most recent stories in a Google news search for the terms "Arizona budget."

Some of the stories below may not be relevant to this page due to the nature of Google's news search engine.

Arizona state budget and finances - Google News Feed

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See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  11. Arizona State Legislature, "Overview of Budget Proposals - General Fund," accessed September 22, 2014
  12. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  13. Morningstar, "The State of State Pension Plans 2013: A Deep Dive Into Shortfalls and Surpluses," accessed September 16, 2013
  14. The Pew Charitable Trusts, “The Fiscal Health of State Pension Plans Funding Gap Continues to Grow,” accessed April 8, 2014
  15. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  16. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  17. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  18. 18.0 18.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  19. Recovery, "Stimulus Spending by State"
  20. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  21. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  22. 22.0 22.1 22.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  23. Office of the Arizona State Treasurer, "About," accessed March 11, 2015
  24. 24.0 24.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014