Own-Source Revenues

Overview
Visualizations (2)
Data

Description:

Own-source revenues are those raised directly by state and local governments; federal government funds are excluded. An annual time series of state and local government revenues 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 2008 ran from July 1, 2007 through June 30, 2008. 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” revenues of state and local governments are collected; publicly run utilities, liquor stores, and insurance trust programs, such as employee retirement systems, are excluded.

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 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/sqpi/default.cfm?selTable=SQ1.

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.

Own-Source Revenues by Type Per $1,000 of Personal Income, Arizona State and Local Governments

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Visualization Notes:

Several categories of own-source revenues are used by state and local governments. The general sales tax and the property tax provide the most revenue in Arizona, though property tax collections relative to the size of the economy fell during the 1990s due to tax rate reductions. The increases in the general sales tax collections during the mid-2000s, and the decreases that began in fiscal year 2008 result from cyclical factors. Individual income tax collections have fallen relative to the size of the economy, a result of a series of tax rate reductions. Revenues from selective sales taxes, such as those applied to tobacco products and alcoholic beverages, also have declined over time relative to the size of the economy, as have collections from “other” taxes.

Own-Source Revenues by Type Per $1,000 of Personal Income as a Percentage of the National Average, Arizona State and Local Governments

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Visualization Notes:

The revenue structure used by state and local governments in Arizona is considerably different from the national average. In recent years, revenues per $1,000 of personal income were above the U.S. average only from the general sales tax. Arizona governments are heavily dependent on this revenue source and have become increasingly reliant over time. In contrast, the reliance on the other major revenue source, the property tax, has decreased. Arizona’s collections relative to the size of the economy fell from 10 percent above to 10 percent below the national average after the early 1990s. Collections from most of the other revenue sources also have fallen further below the national average.