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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. Property tax collections relative to the size of the economy fell during the mid-1990s due to tax rate reductions, then held nearly steady from fiscal years (FYs) 1997 through 2008. The increase in the late 2000s resulted from the large increase in home values during the mid-2000s (changes in property tax payments lag behind changes in market values). Property tax collections per $1,000 of personal income dropped back to the 1997-to-2008 range in FY 2012.

Fluctuations in the general sales tax collections relative to personal income are due to cyclical factors. Increases in FYs 2011 and 2012 were due to the temporary tax rate increase. Individual income tax collections also are cyclical; in addition, they have fallen over time relative to the size of the economy due to a series of tax rate reductions. The increases in FYs 2011 and 2012 reflect the recovery from the recession. Revenues from other taxes also have declined over time relative to the size of the economy. In contrast, collections from fees have increased since FY 2006, in large part due to substantial increases in university tuition.