Difference between revisions of "Arizona state budget and finances"
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Revision as of 15:44, 3 July 2014
Energy • Public education • Higher education • School choice • Public pensions • State budget and finances • Taxes • Voting • Ballot access • Redistricting
|Arizona budget and finances|
|Budget calendar: |
|Fiscal year: |
|State credit rating: |
AA- (as of May 2012)
|Current governor: |
|GF expenses: |
$8.6 billion (estimated for FY 2013)
|All funds expenses: |
$29.2 billion (estimated for FY 2013)
|Spending % change: |
|% from federal funding: |
| State debt: |
|Per capita state debt: |
|Other state budgets|
|Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming|
|Total state expenditures • State debt • Tax 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.|
- 1 Budget process
- 2 Expenditures
- 3 Revenues
- 4 State budgets by year
- 5 Historical spending
- 6 State debt
- 7 Federal aid to state budget
- 8 Budget transparency
- 9 Accounting principles
- 10 See also
- 11 External links
- 12 References
- A summary of the budget drafting process
- Trends in expenditures and revenues
- Current and past fiscal year budget developments
- Financial transparency measures
Between fiscal year 2010 and fiscal year 2013, Arizona's total state expenditures increased by approximately $1.3 billion, from $27.9 billion in 2010 to $29.2 billion in 2013. This represents a 4.66 percent increase, below the cumulative rate of inflation during the same period (6.27 percent, calculated using the Consumer Price Indices for January 2010 and January 2013).
- Budget instructions are sent to state agencies on June 1 of the year preceding the start of the new biennium
- State agencies submit their budget requests to the governor by September 1.
- Agency hearings are held in November and December.
- The governor submits his or her proposed budget to the state legislature in January.
- From January through April, the legislature debates the budget. A simple majority is required to pass a budget.
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.
Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:
- General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
- Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the 'Other funds' column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
- Federal funds: "Funds received directly from the federal government."
- Bonds: "Expenditures from the sale of bonds, generally for capital projects."
The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context). Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.
|Total state expenditures, FY 2013 ($ in millions)|
|State||General fund||Federal funds||Other funds||Bonds||Total||Per capita expenditures|
| Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.|align="left" colspan="8" | Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers |}
Source: National Association of State Budget Officers
Expenditures by function
State expenditures in Arizona can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures by function, FY 2012 (as percents)|
|State||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Source: National Association of State Budget Officers|
From 2008 to 2012, expenditures for elementary and secondary education fell by 8.5 percentage points, or 30.9 percent, as a share of the budget. Meanwhile, during the same period Medicaid expenditures rose by more than nine percentage points, or 40.4 percent, as a share of the budget. Higher education expenditures rose by 2.6 percentage points, or 23.9 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012. Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures from 2008 to 2012 (as percents)|
|Year||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Change in %||-8.5%||2.6%||0.5%||9.2%||-0.6%||-0.6%||-2.6%|
|Source: National Association of State Budget Officers|
The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, FY 2013 ($ in millions)|
|State||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.|
Source: National Association of State Budget Officers
The table below details the change in revenue sources in the general fund from 2009 to 2013. Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, Arizona ($ in millions)|
|Year||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
|Change in %||1.76%||28.04%||16.22%||0.00%||-42.28%||3.71%||3.23%|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers
State budgets by year
Fiscal year 2014
|Arizona state budget -- 2014|
|Arizona State Legislature|
|Introduced:||June 11, 2013|
|House:||June 13, 2013|
|Vote (lower house):||33-27|
|Senate:||June 13, 2013|
|Vote (upper house):||19-10-1|
|Signed:||June 17, 2013|
Governor Jan Brewer signed the fiscal year 2014 budget into law on June 17, 2013. Brewer negotiated the budget with a bipartisan group of state legislators, the same who helped enact her Medicaid expansion plan during the same special legislative session.
The $8.8 billion dollar budget was approximately $100 million less than Brewer initially proposed. The budget included additional funding for Child Protective Services, community colleges, and the state's public universities. The budget also included $82 million in extra funding for elementary and secondary education, as well as $3.6 million for school resource officers. Democrats had pushed for $17 million for school officers.
Fiscal year 2013
- See also: Arizona state budget (2012-2013)
Fiscal year 2012
- See also: Arizona state budget (2011-2012)
Fiscal year 2011
- See also: Arizona state budget (2010-2011)
Fiscal year 2010
- See also: Arizona state budget (2009-2010)
State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).
|Historical state spending in Arizona ($ in millions)|
|Fiscal year||General Fund||Other funds||Federal funds||Bonds||Budget totals|
|Total||% of Budget||Total||% of Budget||Total||% of Budget||Total||% of Budget|
According to a January 2014 report by the nonprofit organization State Budget Solutions, Arizona had a state debt of over $61 billion. Its state debt per capita was $9,321. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.
|Total state debt in Arizona|
|Total state debt||$61,082,635,000||25|
|Per capita debt||$9,321||45|
|State and other fund expenditures||$15,478,000,000||27|
A 2012 report from the Pew Center on the States noted that Arizona's pension system was funded at 75 percent at the close of fiscal year 2010, below the 80 percent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."
Taken together, the funded ratio for the state's pension systems decreased from 80.1 percent in fiscal year 2007 to 71.9 percent in fiscal year 2012, a decrease of 8.2 percentage points, or 10.2 percent. Likewise, unfunded liabilities increased from approximately $7.8 billion in fiscal year 2007 to more than $14 billion in fiscal year 2012.
States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.
The table below lists the Standard and Poor's credit rating for Arizona from 2001 to 2012 (grades from surrounding states are provided for additional context).
|S&P credit ratings from 2001 to 2012|
Federal aid to state budget
- See also: Federal aid to budgets in the 50 states
The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.
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.
|Federal aid to state budgets in 2012|
|State||Federal aid as % of general revenue||Total federal aid||National rank|
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. 
|Line item expenditures|
|Public employee salaries|
|Last evaluated in 2012.|
Arizona publishes a website that tracks government spending, Arizona OpenBook.
Arizona does not have a constitutional provision providing a legislative review period.
The table to the right can be helpful in evaluating the level of transparency provided by a state spending and transparency database:
Arizona checkbook register
In February 2010, the state began posting its checkbook register online, dubbing the website AZCheckbook. The checkbook shows a snapshot of the daily total deposits and withdrawals from the State's Operating Account.
Multi-measure budget transparency profile
The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Arizona, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.
IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Arizona ranked last in the nation, earning two out of eight possible points.
|Arizona - IGPA score for budget process, contents and disclosure|
|Budget transparency indicator||Yes or no?|
|"Generally Accepted Accounting Principles" budget|
|Binding revenue forecast|
|Legislative revenue forecast|
|Constitution or statutory tax/spend limitations|
In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.
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. According to the report, Arizona received a grade of B and a numerical score of 84, indicating that Arizona was an "advancing" state in terms of transparency regarding state spending.
- See also: Arizona government accounting principles
The Joint Legislative Audit Committee, which oversees all audit functions of the Arizona Legislature, provides direction for the Auditor General’s Office. Subject to approval by a majority vote of both legislative houses, the Committee also appoints the Auditor General for a five-year renewable term. The Auditor General’s Office publishes online their audits and must:
- Ascertain whether public entities are making wise use of their resources—public money, personnel, property, equipment, and space;
- Determine whether public entities are complying with applicable laws, regulations, and governmental accounting and financial and reporting standards;
- Define standards and establish procedures for accounting and budgeting, as the Legislature requires; and
- provide technical assistance to state and local governmental entities.
Arizona Revised Statute §41-1279 establishes the Joint Legislative Audit Committee (JLAC). Among other duties, it is charged to:
- Oversee all audit functions of the legislature and state agencies including sunset, performance, special and financial audits, special research requests and the preparation and introduction of legislation resulting from audit report findings.
- Appoint an auditor general subject to approval by a concurrent resolution of the legislature and direct the auditor general to perform all sunset, performance, special and financial audits and investigations.
- Require state agencies to comply with findings and directions of the committee regarding sunset, performance, special and financial audits.
- Arizona government sector lobbying
- Arizona public pensions
- Governor of Arizona
- Arizona State Senate
- Arizona House of Representatives
- Arizona State Legislature
- State Budget Solutions, Arizona
- Arizona Office of the State Treasurer, Distributions
- Arizona Department of Administration, SPIRIT Automated eProcurement System
- Arizona Treasury Revenue Distributions database
- State of Arizona, "Gov. Jan Brewer - State of the State Address 2013," January 14, 2013
- U.S. PIRG, "Report: Transparent & Accountable Budgets," April 8, 2014
- The New York Times, "Battles loom in many states over what to do with budget surpluses," February 3, 2014
- Center on Budget and Policy Priorities, "Policy Basics: The ABCs of State Budgets," February 7, 2013
- Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
- This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
- Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
- InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
- National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
- National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2011-2013," accessed February 21, 2014
- United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
- United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
- Fox News, "Arizona passes Medicaid expansion after months of negotiation," June 13, 2013
- State of Arizona - Office of the Governor, "Statement from Governor Jan Brewer," June 17, 2013
- MyFoxPhoenix.com, "Brewer signs $8.8 billion state budget into law," June 17, 2013
- State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
- State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Pew Center on the States, "Widening Gap Update: Arizona," June 18, 2012
- Arizona State Retirement System, "Actuarial Report on the Valuation of the Plan as of June 30, 2012," accessed October 29, 2013
- Arizona Corrections Officer Retirement Plan, "Arizona Corrections Officer Retirement Plan Consolidated Report, June 30, 2012," accessed October 29, 2013
- Elected Officials' Retirement Plan, "Elected Officials' Retirement Plan Consolidated Report, June 30, 2012," accessed October 29, 2013
- Public Safety Personnel Retirement System, "Public Safety Personnel Retirement System Consolidated Report, June 30, 2012," accessed October 29, 2013
- Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
- United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
- Recovery, "Stimulus Spending by State"
- Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
- AZCheckbook.com, "Home page," accessed April 15, 2014
- ABC News, "New website shows how Arizona is spending your tax dollars," February 16, 2009
- Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
- Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
- U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
- State of Arizona, Office of the Auditor General, "Overview," accessed October 8, 2009