The two best “real-time” measures of Arizona revenues are sales tax collections and income tax withholding according to the JLBC (Joint Legislative Budget Committee). They both reflect the current sluggish, slow-growth nature of the Arizona economy.
The JLBC reports that for first one-third of the fiscal year, sales tax collections are up 3.7% and withholding has increased 4.0%.
The growth is due mostly to technical timing issues related to withholding collections. The number of work days in a given month can have a significant impact on receipts. In terms of the current month, October 2012 had 2 more of these processing days than in 2011, which artificially increased collections.
October expenditures were greater than last year primarily due to Department of Education spending and increased payroll costs caused by: 1) An additional pay period in the month and 2) The employee detention payments which began in October 2012 according to the JLBC.
October General Fund collections were $11.7 million above the enacted May budget forecast. Year-to-date, revenues are 3.1% higher than last year and are $2.3 million above the budget forecast. In comparison to revenue of $662.7 million, October 2012 General Fund spending was $500.7 million, or $42 million above last year.
Fiscal year-to-date, General Fund revenues of $3.0 billion have been offset by $4.3 billion in spending.
Arizona’s fiscal health can also be measured by the operating fund balance. Arizona pays its bills out of the operating fund balance, which consists of the General Fund and certain dedicated funds. As of mid-
November 2012, the operating balance is $1.2 billion.
In addition, the state has $451.5 million in Budget Stabilization Fund reserves, which represents an original $450 million deposited as part of the FY 2013 budget plus $1.5 million of interest earned.
The Arizona Department of Education (ADE) recently provided an update regarding its budget status for FY 2013. In that report, ADE estimates that it will experience a $46.5 million net funding surplus for formula programs for FY 2013. The estimated surplus includes a $36.4 million savings from prior year (FY 2012) overpayments that are being
recaptured in the current year. ADE’s final formula costs for FY 2013 will not be known until later in the year due to ongoing data updates and corrections.