Appropriations Limit

Overview
Visualizations (1)
Data

Description:

State government appropriations cannot exceed a specified limit, measured as a share of personal income in Arizona. This constitutional limitation was passed in the late 1970s. Measuring appropriations as a percentage of personal income automatically adjusts for the effects of inflation, population growth, and per capita economic growth.

Some revenues, such as those deposited to the unemployment compensation fund, are excluded in the calculation of the appropriations limit. Effectively, the appropriations subject to this limit are greater than “total appropriations” but less than “total authorized spending.”

Appropriations are approved by the Arizona Legislature before the beginning of each fiscal year, but adjustments to appropriations can be made during the year. The data are reported for fiscal years; for example, fiscal year 2012 runs from July 1, 2011 through June 30, 2012.

Data Source:

Appropriations and the appropriations limit are reported annually by the Arizona Joint Legislative Budget Committee (JLBC) http://www.azleg.state.az.us/jlbc.htm. The expenditure data for the general fund and for all funds are taken from the Appropriations Report; when released late in a fiscal year, the report includes revised appropriations for the current fiscal year and appropriations for the following fiscal year. The Appropriations Report is released several weeks after the budget has been passed by the Legislature and approved by the Governor. The appropriations limit is calculated by the JLBC in February of each year.

Personal income is estimated quarterly by state by the U. S. Department of Commerce, Bureau of Economic Analysis http://www.bea.gov/regional/sqpi/default.cfm?selTable=SQ1. It is released about three months after the end of the quarter; revisions to estimates for prior quarters are made every quarter.

Data Quality Comments:

Because of differences by state in accounting systems, the JLBC data are not comparable to those of any other state. The JLBC’s calculation of the appropriations limit in dollars is a projection, using a projection of actual appropriations (despite being labeled as “actual approp.” In their report) and a projection of personal income. In nearly all years, the projection of personal income has been less than the actual figure.

Some of the inputs to the calculation of personal income by state are estimated. Personal income estimates are subject to revision. The personal income figure used in the calculation of the appropriations limit is projected. Personal income is a comprehensive measure of the economy but has conceptual limitations when employed to adjust public revenues and expenditures.

Appropriations and Appropriations Limit as a Percentage of Personal Income, Arizona State Government

View:

Loading Data...

Visualization Notes:

The appropriations limitation went into effect at the end of the 1970s. Actual appropriations subject to the limit were nearly identical to the limit in the first two years but have since fallen increasingly far below the limit. Due to shifts in program responsibility between federal, state, and local governments, the original appropriations limit of 7 percent has risen to 7.41 percent. Since fiscal year 2009, appropriations subject to the limit have been less than 6 percent of estimated personal income.

“Total appropriations” and general fund appropriations as a share of personal income are calculated based on actual personal income (and a projection thereof for fiscal years 2011 and 2012). Each has experienced a substantial decline since fiscal year 1992.