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