Historical Arizona budget and finance information

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The historical Arizona budget and finance information below applies to years prior to the most current fiscal year. With the exception of the tab labeled "Prior fiscal year budgets," the tabs below display information, from several different fiscal years, as it was presented on Ballotpedia in prior calendar years. For more current information regarding Arizona's budget and finances, click here.

As published 2016

Arizona budget and finances

General information

Budget calendar: Biennial

Fiscal year: 2017

State credit rating: AA- (as of 2014)

Current governor: Doug Ducey

Financial figures

Total spending (state and federal funds): $31.2 billion (estimated for 2015)

Per capita spending: $4,566.74 (estimated for 2015)

Total state tax collections: $13.1 billion (2014)

Per capita tax collections: $1944.49 (2014)

State debt: $61 billion (as of 2014)

Per capita state debt: $9,321 (as of 2014)

State budget and finance pages • Total state expenditures • State debt • Tax policy in Arizona

In Arizona, as in other states, lawmakers and public officials are elected in part to manage the state's finances. This includes generating revenues (money coming into the state from various sources) and approving expenditures (the money spent on governmental functions and servicing state debt). State budgets are complex and fluid, as they depend on anticipated revenues and planned expenditures, which may alter over the course of a fiscal year. If revenues do not keep pace with expenditures, states generally have to raise taxes, cut services, borrow money, or a combination of the three. State budget decisions are also influenced by policy decisions at the national level, such as the Affordable Care Act or energy and environmental regulations, and issues at the local level, such as crime and the quality of education.

HIGHLIGHTS

Between fiscal years 2014 and 2015, total government spending in Arizona increased by approximately $2.3 billion—from $28.9 billion in fiscal year 2014 to an estimated $31.2 billion in 2015. This represents a 7.30-percent increase.

In Arizona in fiscal year 2014, 59.3 percent of total tax revenues came from sales taxes and gross receipts.. Income taxes accounted for 30.9 percent of total state tax collections.

Education accounted for 35.2 percent of state expenditures in fiscal year 2015, while 31 percent went to Medicaid.

The Arizona state budget and financial data presented here come from different years because the states and the federal government report and publish the information at different times.

Definitions

The following terms are used to describe a state's finances:

• Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
• Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
• State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
• The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
• 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 are "funds received directly from the federal government."
• Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

Note: In comparing dollar amounts across the states, it is important to note that the cost of living can from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis.

Revenues

2014 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2014 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2013 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2013 population" and "Per capita collections" have not been abbreviated.

Compared to neighboring states, Arizona had the lowest state tax collections per capita, at $1,944.

State tax collections by source ($ in thousands), 2014
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes	Total	2013 population	Per capita collections
Arizona	$823,508	$7,759,625	$437,127	$4,037,593	$26,190	$13,084,043	6,728,783	$1,944
Colorado	N/A	$4,474,294	$659,616	$6,375,963	$245,521	$11,755,394	5,355,588	$2,195
Nevada	$258,600	$5,714,197	$608,375	$	$561,997	$7,143,169	2,838,281	$2,517
New Mexico	$105,637	$2,799,875	$282,382	$1,503,195	$1,066,343	$5,757,432	2,085,567	$2,761
Utah	N/A	$2,682,100	$276,824	$3,197,822	$155,743	$6,312,489	2,944,498	$2,144
United States	$14,232,835	$411,414,175	$51,120,024	$357,104,785	$31,880,270	$865,752,089	318,907,401	$2,715
Source: U.S. Census Bureau, "2014 annual survey of state government tax collections by category," accessed April 4, 2016

Arizona tax collections by source in 2014.
Source: U.S. Census Bureau

The table below lists 2014 tax collections by source as percentages of total collections. About 59.3 percent of Arizona's total state tax collections came from sales and gross receipts.

State tax collections by source (as percentages), 2014
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes
Arizona	6.3%	59.3%	3.3%	30.9%	0.2%
Colorado	N/A	38.1%	5.6%	54.2%	2.1%
Nevada	3.6%	80.0%	8.5%	0.0%	7.9%
New Mexico	1.8%	48.6%	4.9%	26.1%	18.5%
Utah	N/A	42.5%	4.4%	50.7%	2.5%
Source: U.S. Census Bureau, "2014 annual survey of state government tax collections by category," accessed April 4, 2016

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, mainly in the form of grants for such things as Medicaid, education, and transportation. In 2013 federal aid to the states accounted for roughly 30 percent of all state general revenues. Federal aid varies from state to state. For example, Mississippi received approximately $7.5 billion in federal aid in 2013, accounting for about 43 percent of the state's general revenues, the highest percentage of all of the states. By contrast, North Dakota received about $1.5 billion in federal aid in 2013, or just 19 percent of the state's general revenues, the lowest percentage in the nation.

The table below notes what share of Arizona’s general revenues came from the federal government in 2013. That year, Arizona received approximately $10.2 billion in federal aid, 27.5 percent of the state's general revenues. Taking into consideration the state's 2013 population, this came out to about $1,534 in federal aid per capita. Figures from surrounding states are provided for additional context.

Federal aid to state budgets, 2013
State	Total federal aid ($ in thousands)	Federal aid as a % of general revenues	Ranking (by % of general revenues)	Est. 2013 population	Aid per capita
Arizona	$10,166,478	27.5%	12	6,626,624	$1,534
Colorado	$6,427,852	20.7%	37	5,268,367	$1,220
Nevada	$2,844,973	16.7%	50	2,790,136	$1,020
New Mexico	$5,228,141	29.4%	6	2,085,287	$2,507
Utah	$4,298,917	23.3%	31	2,900,872	$1,482
Sources: United States Census Bureau, "State Government Finances: 2013," accessed April 4, 2016 United States Census Bureau, "State totals: Vintage 2013," accessed April 8, 2016 Note: Per-capita figures were generated by Ballotpedia by dividing total federal aid for the state by the estimated population of that state in 2013.

Spending

Estimated 2015 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2015 (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.

Arizona's total estimated government spending in fiscal year 2015 was $31.2 billion, which was the second highest amount when compared to surrounding states.

Total estimated state spending, FY 2015 ($ in millions)
State	State funds	Federal funds	Total spending	Population	Per capita spending
Arizona	$18,030	$13,152	$31,182	6,828,065	$4,566.74
Colorado	$24,285	$8,716	$33,001	5,456,574	$6,047.93
Nevada	$6,929	$3,897	$10,826	2,890,845	$3,744.93
New Mexico	$10,510	$6,581	$17,091	2,085,109	$8,196.69
Utah	$9,310	$3,642	$12,952	2,995,919	$4,323.21
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 Bureau estimates. Source: National Association of State Budget Officers, "Examining fiscal 2013-2015 state spending," accessed April 4, 2016

Spending by function

Breakdown of spending by function in FY 2014.
Source: National Association of State Budget Officers

See also: State spending by function as a percent of total expenditures

State spending in Arizona can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2014 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.

In fiscal year 2014, Medicaid accounted for 31 percent of Arizona's total expenditures.

State spending by function as a percent of total expenditures, FY 2014
State	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
Arizona	18.3%	16.9%	0.1%	31.0%	3.8%	5.5%	24.4%
Colorado	25.4%	8.0%	0.0%	23.0%	2.9%	5.5%	35.2%
Nevada	19.6%	8.1%	0.5%	21.5%	3.0%	5.6%	41.5%
New Mexico	18.3%	18.0%	0.6%	25.8%	1.8%	5.3%	30.1%
Utah	25.7%	12.7%	0.5%	19.5%	2.1%	7.7%	31.7%
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."

Spending trends

Between 2010 and 2014, the share of the Arizona state budget spent on higher education increased from 12.6 percent in 2010 to 16.9 percent in 2014. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).

Spending by function from 2010 to 2014 (as percentages)
Year	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
2014	18.3%	16.9%	0.1%	31.0%	3.8%	5.5%	24.4%
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%
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."

Fiscal year budgets

See also: Historical Arizona budget and finance information

Fiscal year 2016

See budget bill: Fiscal year 2016 Enacted Budget

Governor Doug Ducey announced his fiscal year 2016 budget proposal on January 16, 2015. Under this proposal, total general fund spending for fiscal year 2016 would have equaled about $9.1 billion, roughly $187 million below 2015 spending. Among the programs slated for cuts were non-classroom public school spending and higher education funding. In-classroom public school spending was to increase by about $160 million for inflation.

Governor Ducey passed the official budget on March 12, 2015. Ducey announced that the budget put the state on a path towards structural balance, with priority given to education. The budget also did not raise taxes. Total state spending was capped at $32.6 billion, with about 26 percent of that going towards healthcare. The general fund, which equaled about $9.13 billion, was designed to go primarily towards K-12 education: about 42 percent of the general fund would be spent on K-12 education costs.

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. In this report for fiscal year 2012, state debt was calculated based on four components: "market-valued unfunded public pension liabilities, outstanding government debt, unfunded other post employment benefit (OPEB) liabilities, and outstanding unemployment trust fund loans." The report revealed that altogether state governments faced a combined $5.1 trillion in debt, which amounted to $16,178 per capita in the nation.

Total 2012 state debt
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

Taxpayer burden

TIA Methodology: To figure a state’s taxpayer burden or surplus, TIA looked at a state’s total reported assets minus capital assets and assets restricted by law (buildings, roads, land, etc.) to calculate “available assets,” which were then compared to the amount of money the state owes in bills, including retirement obligations such as pension plans and healthcare benefits for retirees. If the difference between available assets and total bills was positive, TIA called this a surplus; if it was negative, this was a burden. This amount was then divided by the number of individual tax returns with a positive tax liability, thus expressing the total state surplus or burden on a per-taxpayer basis.

According to a report released in September 2015 by the nonprofit Truth in Accounting (TIA), Arizona ranked 20th best in the country in “taxpayer burden.” Rather than using per capita state debt, TIA ranked states based on what it called a “taxpayer burden,” a term that reflects “the amount each taxpayer would have to send to their state’s treasury in order for the state to be debt-free.” On the other hand, states that had sufficient resources to pay their bills were said to have a “taxpayer surplus,” which represents the amount that each taxpayer would receive if the state were to disburse its excess funds.

Based on analysis of Arizona's Comprehensive Annual Financial Report from June 30, 2014 and actuarial reports for the state’s retirement plans, TIA concluded that $4.7 billion in promised retirement benefits were unfunded, but none of these liabilities were reported on Arizona’s balance sheet. With all of the unfunded retirement benefits included in the total debt, the state had a shortfall of $6 billion, or a taxpayer burden of $3,300.

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.

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.

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.

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

Economic indicators

See also: Economic indicators by state

Arizona's GDP increased by 1.4 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.

In 2013, most residents in Arizona earned incomes at least 400 percent above the federal poverty level, with a median annual household income of $49,698. The state's unemployment rate in September 2014 was 6.9 percent, 1 percentage point higher than the nationwide rate.

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state
State	Distribution of population by FPL* (2013)				Median annual income (2011-2013)	Unemployment rate		Total GSP (2013)†
	Under 100%	100-199%	200-399%	400%+		Sept. 2013	Sept. 2014
Arizona	20%	23%	25%	31%	$49,698	8%	6.9%	$279,024
Nevada	17%	26%	28%	29%	$49,204	9.6%	7.3%	$132,024
New Mexico	22%	20%	28%	30%	$44,472	6.9%	6.6%	$92,245
Utah	8%	20%	36%	36%	$60,053	4.3%	3.5%	$141,240
United States	15%	19%	30%	36%	$52,047	7.2%	5.9%	$16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government." † In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Budget process

State documents and agenciesBelow are links to official Arizona budget and financial documents. The first is the state's Comprehensive Annual Financial Report (CAFR). A CAFR is a detailed presentation of a government entity's financial condition. This includes fiscal activities and balances for a fiscal year. The second link is to the state's relevant budget agency or office. Arizona CAFR Arizona budget agency

Arizona operates on an annual budget cycle, with each fiscal year beginning on July 1. The sequence of key events in the budget process is as follows:

1. Budget instructions are sent to state agencies in July.
2. State agencies submit their budget requests to the governor by September 1.
3. The governor submits his or her proposed budget to the state legislature five days after the legislature convenes. The legislature convenes on the second Monday in January.
4. There is no official deadline for passing 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.

The governor is required to submit a balanced budget to the legislature but the legislature is not required to pass a balanced budget.

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.

Transparency

See also: "Following the Money" report, 2015

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 March 2015. The report, entitled "Following the Money," measured how transparent and accountable state websites were 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 "Advancing" in terms of transparency regarding state spending.

As published 2015

State finances in the U.S.
State tax policy in the U.S.
Pension Policy
State finances on the ballot Taxes on the ballot Glossary of state budget terms Public pensions

The information on this tab contains: Spending (fiscal years 2013 and 2014) Revenues (fiscal year 2013) State debt (fiscal year 2012) Federal aid to the state budget (fiscal year 2012) Budget process

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-.

HIGHLIGHTS

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 following terms are used to describe a state's finances:

• Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
• Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
• State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
• The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
• 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 are "funds received directly from the federal government."
• Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

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.

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 Bureau estimates. 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.

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."

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).

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."

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.

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.

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

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. In this report for fiscal year 2012, state debt was calculated based on four components: "market-valued unfunded public pension liabilities, outstanding government debt, unfunded other post employment benefit (OPEB) liabilities, and outstanding unemployment trust fund loans." The report revealed that altogether state governments faced a combined $5.1 trillion in debt, which amounted to $16,178 per capita in the nation.

Total 2012 state debt
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.

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.

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.

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 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.

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.

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.

Budget process

Arizona operates on an annual budget cycle, with each fiscal year beginning on July 1. The sequence of key events in the budget process is as follows:

1. Budget instructions are sent to state agencies in July.
2. State agencies submit their budget requests to the governor by September 1.
3. The governor submits his or her proposed budget to the state legislature five days after the legislature convenes. The legislature convenes on the second Monday in January.
4. There is no official deadline for passing 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.

The governor is required to submit a balanced budget to the legislature but the legislature is not required to pass a balanced budget.

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.

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 the transparency and accountability of state websites 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 advancing. in terms of transparency regarding state spending.

As published 2014

The information on this tab contains: Spending (fiscal year 2013) Spending by function (fiscal year 2012) Spending trends (fiscal years 2008 to 2012) Revenues (fiscal year 2013) Historical spending (fiscal years 2009 to 2012) Budget transparency

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).

Spending

Definitions

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."

2013

Breakdown of expenditures in FY 2013
Source: National Association of State Budget Officers

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
Arizona	$8,567	$12,332	$7,624	$770	$29,293	$4,420.50
Colorado	$7,942	$7,334	$13,203	$0	$28,479	$5,405.66
Nevada	$3,179	$2,918	$2,769	$27	$8,893	$3,187.30
New Mexico	$5,656	$5,660	$3,227	$0	$14,543	$6,974.10
Utah	$4,990	$3,405	$3,739	$469	$12,603	$4,344.56
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

Spending by function

2012

Breakdown of expenditures by function in FY 2012
Source: National Association of State Budget Officers

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 percentages, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percentages)
State	Elementary and secondary ed.	Higher ed.	Public assistance	Medicaid	Corrections	Transportation	Other
Arizona	19.0%	13.5%	1.0%	32.0%	3.6%	6.4%	24.6%
Colorado	25.3%	9.0%	0.0%	20.7%	2.7%	5.4%	36.9%
Nevada	23.6%	9.7%	3.2%	25.4%	3.8%	9.5%	24.9%
New Mexico	19.7%	19.3%	0.5%	24.7%	2.0%	5.9%	27.9%
Utah	24.7%	11.9%	0.9%	17.5%	2.0%	9.2%	33.9%
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."

Spending trends

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 percentages, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percentages)
Year	Elementary and secondary ed.	Higher ed.	Public assistance	Medicaid	Corrections	Transportation	Other
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%
2008	27.5%	10.9%	0.5%	22.8%	4.2%	7.0%	27.2%
Change in %	-8.5%	2.6%	0.5%	9.2%	-0.6%	-0.6%	-2.6%
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."

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013
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
Arizona	$3,822	$3,288	$688	$0	$785	$8,583	$1,295.23
Colorado	$2,186	$5,642	$640	$13	$111	$8,592	$1,630.87
Nevada	$919	$0	$0	$705	$1,463	$3,087	$1,106.40
New Mexico	$2,395	$1,210	$250	$69	$1,731	$5,655	$2,711.86
Utah	$1,633	$2,652	$313	$0	$495	$5,093	$1,755.68
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

Revenue trends

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
2013	$3,822	$3,288	$688	$0	$785	$8,583	$1,295.23
2012	$3,655	$3,092	$648	$0	$833	$8,228	$1,255.96
2011	$3,467	$2,864	$560	$0	$1,490	$8,381	$1,295.60
2010	$3,382	$2,416	$413	$0	$2,114	$8,325	$1,299.00
2009	$3,756	$2,568	$592	$0	$1,360	$8,276	$1,254.74
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

Historical spending

The information on 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
2011-2012	$8,414	29%	$7,064	25%	$12,299	43%	$763	3%	$28,540
2010-2011	$8,306	27%	$6,715	22%	$14,971	49%	$741	2%	$30,733
2009-2010	$9,016	32%	$7,192	26%	$10,626	38%	$1,112	4%	$27,946
Averages:	$8,579	30%	$6,990	24%	$12,632	43%	$872	3%	$29,073

Budget transparency

Transparency evaluation
	Arizona OpenBook
Searchability	Y
Grants	N
Contracts	Y
Line item expenditures	Y
Dept./agency budgets	Y
Public employee salaries	Y
Last evaluated in 2012.

See also: Evaluation of Arizona state website and Constitutional provisions regarding reading of bills

Arizona has published a website that tracks government spending, Arizona OpenBook.

Arizona does not have a constitutional provision providing a legislative review period.

Government tools

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?
Performance measures
"Generally Accepted Accounting Principles" budget	N
Multi-year forecasting	N
Annual cycle	N
Binding revenue forecast	N
Legislative revenue forecast	N
Nonpartisan staff	N
Constitution or statutory tax/spend limitations	Y
TOTAL	2

In addition to the individual state profile, IGPA offered 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 were 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.

Prior fiscal year budgets

Fiscal year 2016

See budget bill: Fiscal year 2016 Enacted Budget

Governor Doug Ducey announced his fiscal year 2016 budget proposal on January 16, 2015. Under this proposal, total general fund spending for fiscal year 2016 would have equaled about $9.1 billion, roughly $187 million below 2015 spending. Among the programs slated for cuts were non-classroom public school spending and higher education funding. In-classroom public school spending was to increase by about $160 million for inflation.

Governor Ducey passed the official budget on March 12, 2015. Ducey announced that the budget put the state on a path towards structural balance, with priority given to education. The budget also did not raise taxes. Total state spending was capped at $32.6 billion, with about 26 percent of that going towards healthcare. The general fund, which equaled about $9.13 billion, was designed to go primarily towards K-12 education: about 42 percent of the general fund would be spent on K-12 education costs.

Fiscal year 2015

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.

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.

Fiscal year 2014

Arizona state budget -- 2014
Arizona State Legislature
Text:	HB 2001
Legislative history
Introduced:	June 11, 2013
House:	June 13, 2013
Vote (lower house):	33-27
Senate:	June 13, 2013
Vote (upper house):	19-10-1
Governor:	Jan Brewer
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)

See also

• Arizona state budget and finances