Arizona Indicators

General Fund Revenues Continue to Plummet

General fund revenue predominantly comes from taxes, especially the sales tax and individual income tax, with small contributions from non-tax sources, including fees and the state lottery.

According to the Arizona Joint Legislative Budget Committee, General Fund revenue collections for February totaled $237.1 million, which is $48 million below the budget forecast. February sales tax revenues were down 8.4% compared to last February and individual income tax collections were $22 million below forecast.

Public finance — taxes and other revenues collected by government and the expenditure of those revenues — has become a prominent public issue due to the need to resolve the deficits that afflict state government and most county and municipal governments in Arizona.

The deficits in part are the result of the severe and prolonged economic downturn: revenues will grow as the economy recovers from the current recession. However, a structural deficit also was created over the last 15 years as taxes were permanently reduced during years of temporarily high revenues without a commensurate decrease in expenditures.