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Comparison of Revenues and Expenditures

Description: 

The primary focus of state government public finance is the general fund. Ongoing revenues and ongoing expenditures—which exclude one-time fixes intended to balance the budget, such as transfers between the general fund and other state government funds—is the best measure to track changes in state government revenues and expenditures over time. A deficit exists when ongoing expenditures are greater than ongoing revenues.

The revenue and expenditure figures are reported for fiscal years; for example, fiscal year 2013 runs from July 1, 2012 through June 30, 2013. An annual time series of revenues are available back to fiscal year 1971; expenditure data start with fiscal year 1979. Revenue data extend through the last complete fiscal year while the expenditure data consist of appropriations through the current fiscal year. Over the years, numerous changes have been made to the sources and uses of the general fund. For example, school construction was not part of the general fund prior to fiscal year 1999.

In order to compare revenues and expenditures over time, the effects of inflation, population growth, and per capita economic growth must be considered. Reporting revenues and expenditures per $1,000 of personal income automatically adjusts for all three factors. The fiscal year average (the average of the four quarters of the fiscal year) of personal income is used to standardize the public finance data.

Data Source: 

Revenues and expenditures are reported by the Arizona Joint Legislative Budget Committee (JLBC) http://www.azleg.state.az.us/jlbc.htm. Preliminary estimates of fiscal year revenues are available several weeks after the end of a fiscal year. The expenditure data 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.

Personal income is estimated quarterly by state by the U. S. Department of Commerce, Bureau of Economic Analysis http://www.bea.gov/regional/index.htm. 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.

Some of the inputs to the calculation of personal income by state are estimated. Personal income estimates are subject to revision. Figures for the current fiscal year are projected. Personal income is a comprehensive measure of the economy but has conceptual limitations when employed to adjust public revenues and expenditures.

iconRevenues and Expenditures Per $1,000 of Personal Income, Arizona State Government General Fund

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Visualization Notes:

Since the early 1990s, ongoing general fund revenues and expenditures have fallen substantially in Arizona relative to the size of the economy and to the ability of Arizonans to pay taxes and fees. This downward trend is largely the result of numerous statutory changes (for example, tax rate reductions) that have been made to the revenue system.

Revenues relative to the size of the economy also have become highly cyclical, falling sharply during and shortly after recessions and rising in times of strong economic growth. As a result, expenditures also have become cyclical—despite countercyclical increases in demand for health and social service programs. The historically low figures in recent years are due to the long-term trend to reduce revenues and to the effects of the long and deep recession that lasted from fiscal year (FY) 2008 into FY 2010. When the revenue line is below the expenditure line, a budget deficit exists. In FY 2013, ongoing revenues remained less than expenditures, though the differential continued to narrow.

Expenditures continued to fall relative to the size of the economy through FY 2014. Based on the appropriations budgeted, the figure will be marginally higher in FY 2015. In contrast, revenues per $1,000 of personal income began to rebound in FY 2011 and rose a little further in FYs 2012 and 2013. Preliminary data suggest that the figure slipped in FY 2014.

Data Source

Revenues and expenditures are reported by the Arizona Joint Legislative Budget Committee (JLBC) http://www.azleg.state.az.us/jlbc.htm. Preliminary estimates of fiscal year revenues are available several weeks after the end of a fiscal year. The expenditure data 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.

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