Ongoing Revenues

Overview
Visualizations (4)
Data

Description:

The primary focus of state government public finance is the general fund. Ongoing revenues—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 over time.

The revenue data are reported for fiscal years; for example, fiscal year 2011 runs from July 1, 2010 through June 30, 2011. An annual time series of revenues are available back to fiscal year 1971. Revenue data extend through the last complete fiscal year. Over the years, numerous changes have been made to the sources of revenue deposited to the general fund.

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

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.

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.

Ongoing Revenues Per $1,000 of Personal Income, Arizona State Government General Fund

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Visualization Notes:

Through the early 1990s, ongoing general fund revenues in Arizona averaged nearly $50 per $1,000 of personal income (alternatively, were equal to approximately 5 percent of personal income). A long series of tax reductions since then have not only greatly lowered revenues, but have made revenue collections much more cyclical. Even at the peak of the economic cycle in fiscal years 2006 and 2007, revenues relative to the size of the economy and to the ability of Arizonans to pay taxes and fees were less than the long-term average. At the recessionary trough in fiscal year 2010, revenues per $1,000 of personal income were barely more than half of the historical norm. As the economy recovers, revenues per $1,000 of personal income will rise. However, even at the next cyclical peak, the figure is unlikely to be much more than $40—well below the historical norm.

Actual and Adjusted Ongoing Revenues per $1,000 of Personal Income, Arizona State Government General Fund

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Visualization Notes:

Had no tax law changes been passed in Arizona since the early 1990s, general fund revenues would have been much higher than actual revenues. Though this adjusted revenue still would have been cyclical, the magnitude of the cyclical swings would have been much less than actually experienced. The figures for fiscal year 2011 are projections.

Ongoing Revenues by Type Per $1,000 of Personal Income, Arizona State Government General Fund

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Visualization Notes:

Relative to the size of the Arizona economy and to the ability of Arizonans to pay taxes and fees, general fund revenues from the property tax and from miscellaneous taxes have been nearly eliminated since the early 1970s. Despite few adjustments to the sales tax, its revenues have fallen somewhat relative to the size of the Arizona economy since the mid-1980s, as consumer purchases have shifted from taxable goods to untaxed services. Due to numerous reductions in tax rates, revenues from the income tax have fallen since the early 1990s relative to the size of the economy. While income tax collections will rebound from the recent recessionary trough, part of the decrease since the fiscal year 2007 peak was due to statutory reductions to the tax rate.

Ongoing Revenues by Type as a Share of the Total, Arizona State Government General Fund

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Visualization Notes:

As a result of all of the tax law changes that have been made since the early 1970s, Arizona’s general fund has become very highly dependent on just two revenue sources—the sales tax and the income tax—that account for nearly 90 percent of all revenues. Revenue collections from each of these sources are highly cyclical.