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Expenditures

Description: 

An annual time series of state and local government expenditures produced by the U.S. Census Bureau goes back to fiscal year 1961, but the focus in Arizona Indicators is the period since the early 1990s. The data are reported for fiscal years; for example, fiscal year 2010 ran from July 1, 2009 through June 30, 2010. The latest data typically lag two-to-three years behind.

The government finance data are collected from a census of all governments in years ending in ‘2’ and ‘7.’ In the other years, information is collected from each state government and from a sample of local governments. Only “general” expenditures of state and local governments are collected; publicly run utilities, liquor stores, and insurance trust programs, such as employee retirement systems, are excluded.

Total expenditures are divided into two categories: capital outlays (for the construction of buildings and for the purchase of land and equipment) and noncapital expenditures (such as the compensation of employees and the purchase of supplies, materials, and contractual services). Capital outlays largely are made in response to a growing population and may not benefit other residents, so the noncapital figure generally is the more meaningful measure.

In order to compare expenditures over time, the effects of inflation, population growth, and per capita economic growth must be considered. Reporting 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: 

Expenditures are reported by the U.S. Department of Commerce, Census Bureau http://www.census.gov/govs/estimate/. 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.

Data Quality Comments: 

The Census Bureau did not release state and local government finance data by state for fiscal years 2001 and 2003; interpolated figures for these years are shown in the charts. In noncensus years, the Census Bureau data are subject to sampling error. In all years, the data are subject to misreporting by state and local governments and to misunderstandings between the Census Bureau and state and local governments regarding the differing accounting systems used.

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

iconExpenditures Per $1,000 of Personal Income, Arizona State and Local Governments

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Visualization Notes:

Total and noncapital expenditures of Arizona state and local governments relative to personal income dropped during the 1990s but have since returned to the level of the early 1990s. The increases in fiscal years 2009 and 2010 reflect the infusion of federal government economic stimulus funding. Capital outlays, the difference between total and noncapital expenditures, have changed little over time relative to the size of the Arizona economy.

iconExpenditures Per $1,000 of Personal Income, Rank, Arizona State and Local Governments

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Visualization Notes:

Due to the state’s rapid population growth, capital expenditures relative to the size of the Arizona economy consistently rank higher than the median state until fiscal year 2010; population growth slowed substantially during the 2008-10 recession. Noncapital expenditures ranked near the median state in the early 1990s, but have been among the 20 lowest in every fiscal year since 1995.

iconExpenditures Per $1,000 of Personal Income as a Percentage of the National Average, Arizona State and Local Governments

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Visualization Notes:

Noncapital expenditures relative to the size of the economy were slightly above average in the early 1990s but have been roughly 5 percent to 10 percent below the national average in Arizona since fiscal year 1995. Capital outlays in Arizona relative to the size of the economy have been above the national average by 10 percent to 30 percent in most years, but the differential was only 4 percent in fiscal year 2010.

Data Source

Expenditures are reported by the U.S. Department of Commerce, Census Bureau http://www.census.gov/govs/estimate/. 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.