Arizona state budget (2011-2012)

Note: This article was last updated in 2012. Click here for more recent information on state budgets and finances.

The state ended fiscal year 2012 with a $379 million surplus. The budget already assumed a $122 million surplus -- tax revenue generated $145 million more than anticipated and spending was $112 million less than anticipated. Spending was lower due in part to lower school enrollment and few adults without children enrolling in Medicaid. In December 2011, legislative budget staffers forecasted that the state would end the fiscal year with more than $400 million in the bank.

The state’s fiscal year 2012 General Fund budget was $8.32 billion. After accounting for non-General Fund monies, the state’s “all funds” budget was $26.9 billion. The state's $8.3 billion fiscal year 2012 general fund budget relied primarily on cuts to eliminate a projected $1.1 billion shortfall. Governor Jan Brewer signed it into law on April 6, 2011. Using those cuts, the budget eliminated a projected $1.1 billion shortfall. The budget is 20 percent smaller than it was four years ago.

The 416-page Appropriations Report for fiscal year 2012 prepared by the Joint Legislative Budget Committee can be accessed year 2012AppropRpt.pdf here (dead link).

Spending cuts included:

• $198 million from universities, approximately a 40 percent reduction in state support to the schools from the past three years
• $183.2 million from K-12 schools
• Nearly $72.9 million from community colleges
• $50.4 million from the state's social-service agency

The legislature also approved these fiscal year 2012 budget actions:

• $1.1 billion in new reductions, including $524 million from Medicaid waiver plan savings;
• $172 million in new fund transfers (in addition to $85 million in the Baseline for a total of $256 million);
• $53 million in other revenue, including $22 million for a one-time Tax Amnesty Program;
• $66 million cash payments or redirected local revenue (in addition to $35 million in the Baseline for a total of $101 million);
• $70 million in additional base revenue above the Baseline estimate, including the legislature's adoption of revenue growth rates of 5.6% in fiscal year 2011 and 5.7 percent in fiscal year 2012.

In fiscal year 2012, the state deposited $250 million into the state's Budget Stabilization Fund (“Rainy Day Fund”). In fiscal year 2010 and fiscal year 2011, the fund's balance had been $0.

Education spending

For fiscal year 2012, Arizona devoted 27.1 percent of its total spending to education, up from 26.5 percent in fiscal year 2009.

Fiscal year	Total spending	Education spending	Percent education spending
2009	$53.5 billion	$14.2 billion	26.5%
2010	$55.2 billion	$14.3 billion	25.9%
2011	$52.9 billion	$14.0 billion	26.4%
2012	$50.9 billion	$13.8 billion	27.1%

Medicaid waiver

The budget's heath care bill stated that the legislature supported restoration of transplant coverage and authorized Brewer to make changes to the Medicaid program to fit services and eligibility standards to available funding.

The biggest cut reduced state funding for the Medicaid program by $510 million. Freezes proposed by Brewer would have reduced the Arizona Healthcare Cost Containment System's enrollment by approximately 138,000 people in the next year. The reductions would have come in enrollment categories that are above federally required minimums. The program served approximately 1.3 million low-income people, or 20 percent of Arizonans. The state planned to limit adult Medicaid recipients to 25 days of hospital coverage a year effective at the end of October 2011.

The cuts would have saved $207 million in fiscal year 2012.

Opponents challenged whether Brewer had legal authority to limit enrollment in Medicaid. A state court ruled on August 11, 2011, that she could legally reduce enrollment in Arizona's Medicaid program to help balance the state budget.