Executive Budget Summary 2008-2009

              S U MMA R Y
The Executive Budget
FISCAL YEAR 2009
Janet Napolitano
GOVERNOR
S U MMA R Y
The Executive Budget
FISCAL YEAR 2009
Janet Napolitano
GOVERNOR
Provisions for Individuals with Disabilities
Individuals who have a disability and require reasonable
accommodation in order to use this document are encouraged to
contact the Governor’s Office of Strategic Planning and Budgeting
at 602‐542‐5381.
January 2008
To the Honorable Members of the
Forty-Eighth Arizona Legislature:
In the coming months we will demonstrate to the people we serve that skilled governance
is most precious when revenues are scarce and demands for State services are increasing. Despite
the slow economic growth that we anticipate for much of 2008, together we will use our ingenu-ity,
discipline and good judgment to ensure that, from now through Fiscal Year 2009, State
government will continue to:
• progress toward excellence in meeting the educational needs of young Arizonans;
• ensure access to health care for our needy citizens;
• protect the public from domestic and foreign threats to their safety and security;
and
• stimulate and broaden the state’s dynamic economic base.
These are fundamental and essential functions of State government, and the relative scar-city
of our resources must not deter us from fulfilling our obligations to the people. Further, we
will accomplish these objectives without increasing the tax burden on Arizona families and
businesses.
To meet the educational needs of young Arizonans, the Executive Budget Recommenda-tion
supports focused development of teachers in the STEM fields: science, technology,
engineering and mathematics. Other education priorities include teacher mentoring; instruction
for English language learners; P-20 (preschool through higher education and workforce training)
alignment of Arizona’s education system; investment in after-school tutoring and mentoring,
youth development and extended learning time; and, to promote both education and health care
in Arizona, authorization to continue building the medical school campus in Phoenix.
To further ensure access to health care and other support for needy Arizonans, this Rec-ommendation
provides funding to accommodate caseload growth in adoptions, Children’s
Services, and services for the developmentally disabled; and to expedite drug abuse interventions
to get parents the treatment they need to safely care for their children. The Recommendation also
provides needed resources to protect vulnerable adults, including elderly citizens and victims of
domestic violence. It addresses our future needs for doctors and nurses by expanding our primary
care provider student loan repayment program. Finally, to further extend health care to children
STATE OF ARIZONA
JANET NAPOLITANO OFFICE OF THE GOVERNOR MAIN PHONE: 602-542-4331
GOVERNOR 1700 WEST WASHINGTON STREET, PHOENIX, ARIZONA 85007 FACSIMILE: 602-542-7601
January 2008
Page 2
of lower-income families, we should allow families that are not eligible for AHCCCS health
insurance to buy coverage for their children through the State’s existing contracts with private
insurance companies.
To keep our citizens safe and secure from crime and other threats, the Recommendation
supports higher pay for DPS officers; opening new prison beds to keep up with the growth in our
inmate population; developing an effective and secure form of personal identification – the use
of which would be voluntary – to satisfy border security and other needs; easing the strain on our
prison system by imposing jail incarceration on certain types of inmates; moving forward with
our system of interoperable radio communications to enhance coordination among law enforce-ment
agencies at the state, county and local levels; and expanding the Arizona Counter Terrorism
Intelligence Center.
As we evaluate State government’s resources and spending priorities, we should be mind-ful
that the economic forecasts that dictate caution and austerity in crafting the Fiscal Year 2009
General Fund budget also predict a gradual return to economic vitality by the time the fiscal year
reaches its midpoint. Thus, in our deliberations we should presume that the slow growth that
characterizes Arizona’s current economy will be short-lived. The deferrals and fiscal bridges that
are appropriate at this time to balance the budget will be resolved in the relatively near future,
and we can look forward with optimism to more robust General Fund revenues and greater
resources to meet the growing needs of our dynamic state.
Very truly yours,
Janet Napolitano
Governor
JN/neh
TABLE OF CONTENT S
BUDGET MANAGEMENT
Budget Management Plan for Fiscal Year 2008 ....................................... 1
Addressing the Shortfall for Fiscal Year 2009.......................................... 2
BUDGET HIGHLIGHTS
Recommendation Reaches a Diverse Array of Stakeholders ................ 3
BUDGET SUMMARY
General Fund Sources and Uses................................................................ 9
General Fund Revenue Summary........................................................... 11
General Fund Operating Budgets Summary......................................... 12
Other Appropriated Funds Revenue Summary.................................... 14
Other Appropriated Funds Operating Budgets Summary.................. 15
General Fund Recommendations by Category ..................................... 26
BUDGET MESSAGE
The Economy: State’s Economy Expected to Grow – Slowly – for
Most of 2008.............................................................................................. 27
Efficiency Review: State Agency Innovations Produce Major Savings.... 29
Education: Preserving Investments in Education Is a Safeguard
for Arizona’s Future.................................................................................. 32
Health and Welfare: New Initiatives Address Increased Demand ........... 34
Protection and Safety: State Government Responds to New
Challenges in Protecting the Public .......................................................... 38
Transportation & Economic Growth: Consistent Growth Requires a
Sustainable Development Strategy ........................................................... 41
Natural Resources: Environmental Protection Measures to Boost
Arizona’s Economic Vitality ..................................................................... 44
Legislative Actions: Changes Are Necessary to Implement the
Executive Recommendation ...................................................................... 47
CAPITAL OUTLAY
General Government: Funding for Maintenance and Preservation ......... 51
Education: Enrollment Growth Demands Capital Investment .................. 55
ACKNOWLEDGEMENTS
Governor’s Office of Strategic Planning & Budgeting
FY 2009 Executive Budget 1
BUDGET MANAGEMENT
Overview: Budget Management Plan for FY 2008
AT THE GOVERNOR’S DIRECTION, the Governor’s Office of
Strategic Planning and Budgeting (OSPB) prepared a Budget
Management Plan to meet the challenges of the fiscal situation
now faced by the State of Arizona. This plan has been devel‐oped
to solve the Fiscal Year 2008 shortfall, which, as this
document went to print, was estimated to be approximately
$870 million.
GUIDING PRINCIPLES
The principles on which this plan is based are as follows:
• The integral functions of State government must not be
compromised and our commitment to efficiency and excel‐lence
must be maintained.
• Recommended spending reductions will be on an agency‐by‐
agency and program‐by‐program basis, not across‐the‐board.
• The Arizona education system – including public K‐12 and
higher education programs – are exempt from spending
reductions.
• Other programs and services affecting Arizona’s children
and vulnerable adults will be exempt from spending reduc‐tions.
• Appropriate application of previously used and accepted
budgetary practices will be employed.
PLAN ELEMENTS
The Budget Management Plan consists of three primary
elements:
• First is a State agency budget savings strategy that will
reduce FY 2008 General Fund expenditures by $214 million.
• Second, the use of capital financing (in place of paying cash)
for school construction allows for lease‐purchase for $393
million of elementary and secondary school facilities during
FY 2008.
• Third, it is appropriate to draw $263 million from the State’s
Budget Stabilization Fund (commonly known as the “Rainy
Day Fund”) as a short‐term fiscal bridge. The BSF’s balance
is nearly $700 million.
The following table summarizes the plan’s key elements:
State Agency Budget Savings: $214,000,000
K‐12 Capital Financing: 393,000,000
Budget Stabilization Fund: 263,000,000
Total Budget Management Plan: $870,000,000
The current plan follows the guidelines set forth by the
Governor in September 2007.
September 2007
Plan
% of
total
January 2008
Plan
% of
total
Shortfall $600 million $870 million
Budget Savings 100 million 17% 214 million 25%
K‐12 Capital 300 million 50% 393 million 45%
Rainy Day Fund 200 million 33% 263 million 30%
2 Budget Management
BUDGET MANAGEMENT
Addressing the Shortfall for FY 2009
THE ECONOMIC AND FISCAL TRENDS in Arizona and the nation
continue a trend, which began in earnest in Fiscal Year 2008,
that poses significant challenges to balancing the State’s budget
and managing State Government in FY 2009. In order to face
this shortfall, it is necessary to provide information in the
Executive Budget Recommendation regarding the management
of the budget for FY 2009.
The FY 2008 Budget Management Plan (discussed earlier)
provides a realistic and reasonable approach for the resolution
of the estimated $870 million shortfall in that fiscal year.
Looking to the following year, a January 2008 analysis of
economic and fiscal trends includes a projected $1.28 billion
shortfall for FY 2009. Notwithstanding the magnitude of that
shortfall, the actions proposed in the Executive Recommenda‐tion
will help State Government achieve a balanced budget in
FY 2009.
ASSUMPTIONS
The adverse economic and fiscal trends reported in the FY
2008 Budget Management Plan are expected to continue into FY
2009 but improve as the year progresses. The Executive’s
projection assumes that the Federal Reserve will further cut
interest rates which will help the housing downturn and the
turmoil in the financial market to stabilize and ultimately
rebound. As a result of these assumptions, the Executive
expects base State revenues to increase by approximately 1.5%
during FY 2009.
FY 2009 PLAN
Governor Napolitano directed the Governor’s Office of Stra‐tegic
Planning and Budgeting (OSPB) to prepare an Executive
Recommendation for FY 2009 that would be consistent with
several key Executive policies:
• Protect and maintain State Government’s integral functions
and its commitment to efficiency and excellence.
• Construct a fiscally prudent, balanced budget that does not
raise taxes and maximizes the efficient use of State re‐sources.
• Recommend spending reductions on an agency‐by‐agency
and program‐by‐program basis, not across‐the‐board.
• Protect Arizona’s children and vulnerable populations.
• Reaffirm the Executive’s commitment to improving educa‐tion,
strengthening families’ economic development, pre‐serving
natural resources, and securing Arizona’s borders.
• Invoke proven temporary emergency fiscal measures that
are necessary and appropriate.
The FY 2009 Executive Budget anticipates the total sources
of funds to be $10.124 billion and the total uses of funds to be
$11.405 billion. The resulting shortfall of $1.28 billion will be
resolved through the adoption of the proposed FY 2009 Execu‐tive
Recommendation.
The plan’s primary components include:
• State agency budget savings, consisting of fund shifts and
agency cuts ($140 million);
• Non tax increase revenue generation ($186 million);
• use of the State’s Rainy Day Fund ($196.6 million);
• delaying the June 15, 2008, State Aid payment to schools
until July 1, 2008 ($297 million); and
• use of capital financing for the construction of K‐12 schools
($471 million).
The total of these measures designed to cover the projected
FY 2009 shortfall is $1.29 billion, which would provide for a
balanced budget as well as a balance forward of $10 million.
DETAILS
Fund Shifts and Agency Cuts. The $140 million to be real‐ized
through State agency budget savings will consist of three
parts.
• Inmates with short‐term sentences will be sent to county
jails rather than the Department of Corrections, resulting in
a General Fund savings of $60.8 million.
• A series of agency budget cuts will save $25.8 million.
• The State Highway Fund will be tapped for $53 million to
benefit the General Fund but will not delay highway con‐struction.
Non Tax Increase Revenue Generation. The benefits of
revenue generation to the General Fund will amount to $186
million. In order to obtain this benefit, the collections threshold
for remittance of transactions privilege tax in June (instead of
July) will be reduced to $100,000, as in prior years. Reverting to
this approach will generate $55 million in FY 2009. The addition
of auditors and collectors at the Department of Revenue will
bring in $31 million in FY 2009. Redistribution of non‐protected
Lottery funds will give an extra $10 million to the General
Fund. Finally, enhancing the radar system on the state’s high‐ways
will net $90 million in General Fund revenue in FY 2009.
CONCLUSION
The FY 2009 Executive Recommendation provides a bal‐anced,
creative approach to eliminating the shortfall without
raising taxes and by adhering to the Executive’s other guiding
principles. It is anticipated that the economic recovery, while
gradual, will enhance revenues for much of FY 2009. ●
FY 2009 Executive Budget 3
BUDGET HIGHL IGHTS
Executive Recommendation Reaches Out to a
Diverse Array of Stakeholders
For population sectors, business owners and State agencies directly impacted by State services and
programs, how the Executive and Legislative branches allocate resources transcends mere public policy
What the Executive Budget Does for …
K‐12 EDUCATION
The Governor’s FY 2009 recommen‐dation
provides $166 million in new
General Fund monies for K‐12 schools in
FY 2009. This increase consists of:
• $153 million in Basic State Aid,
which includes the 2% inflation fac‐tor
as required by Proposition 301;
and
• $13.5 million in Additional State
Aid.
Basic State Aid. The largest for‐mula‐
funding program for K‐12 educa‐tion,
Basic State Aid provides financial
assistance to school districts and charter
schools for their maintenance and
operations and “soft” capital needs. For
FY 2009, the Executive’s recommended
$153 million fully funds student growth
in traditional and charter schools, where
net enrollment is expected to rise by
31,852 students.
New Construction. For FY 2009, the
Executive recommends financing $471
million for the New Construction
program, which is expected to fund
approximately 40 new schools and/or
build‐outs of existing schools, including
new and existing facilities planned for
Voluntary Full‐Day Kindergarten,
additional funds for school safety issues,
and factors in increased costs attribut‐able
to construction inflation.
To fund payments on existing obli‐gations,
the Executive recommends a
total of $79 million General Fund for the
FY 2009 lease payments.
Capital Needs – K‐12. The Executive
recommends a five‐year commitment to
financing new school construction to
provide that steady foundation upon
which Arizona’s children can grow and
build better lives and better communi‐ties.
The School Facilities Board (SFB)
funds the construction of approximately
34 schools per year. Since 1999, paying
for school construction has been accom‐plished
utilizing both cash (i.e., General
Fund appropriations) and lease‐to‐own
financing. By financing the estimated
$2.6 billion in school construction
needed through 2013, the cost to the
General Fund for debt service during
the five‐year period is expected to be
approximately $341 million.
What the Executive Budget Does for …
THE UNIVERSITIES
Despite the State’s current fiscal
situation, the Executive Recommenda‐tion
provides increased funding for the
State’s universities. The Executive
Recommendation reflects a net funding
increase to the universities of $25.4
million from the General Fund. The
recommendation includes an increase of
almost $21 million for the traditionally
appropriated 22:1 funding formula,
which provides funding increases for
estimated enrollment growth.
Additionally, the Executive Recom���mendation
fully funds the State match
for the Arizona Financial Aid Trust
(AFAT), which is used to provide
immediate aid to students with verifi‐able
financial needs; assist students
who, by virtue of special circumstances,
present a unique need for financial aid;
and create an endowment for future
financial aid.
STEM Teachers. The Executive Rec‐ommendation
provides a total $7 million
in FY 2009 for all three universities to
recruit, teach and retain teachers in
STEM (science, technology, engineering
and mathematics) areas, with a special
focus on middle and secondary schools.
The goals of this initiative are to:
• aggressively recruit students to
become middle schools and secon‐dary
teachers in the STEM areas,
with special emphasis on attracting
more students from typically under‐represented
populations;
• offer innovative workshops in the
STEM content areas for existing
teachers;
• take a P‐20 approach that aims to
expand the pipeline of students and
effective teachers beginning in the
earliest grades and continuing
through university work;
• increase teacher production annu‐ally;
and
• offer innovative courses through
validated and effective instruction,
such as creating and offering
coursework that combines content
with best practice pedagogy.
The recommended funding is an in‐vestment
in the state’s work force and
enhances Arizona’s ability to compete
globally.
Capital Needs. Phase I of meeting
the universities’ capital needs is con‐struction
of the Medical Education
Building and Arizona Biomedical
Collaborative II at the Phoenix Biomedi‐cal
Campus. The $470 million construc‐tion
of these two research and education
buildings is a joint venture of the three
universities, which will share the facility
in conducting related programs such as
the medical school, allied health pro‐grams,
bioinformatics and biotech
research activities. Completion of this
phase requires Legislative authorization
to issue $470 million in bonds, struc‐tured
to allow debt service payments to
begin in FY 2010.
In Phase II, the remaining capital
needs to be addressed on each univer‐sity
campus includes years of deferred
maintenance, building renewal and
major renovations. By maintaining
existing buildings at their fullest capac‐ity,
major expenditures in building
replacement will be avoided. Addition‐ally,
as Arizona grows, the universities
4 Budget Highlights
need additional classroom space and
infrastructure to accommodate enroll‐ment
growth. Completion of the projects
that comprise Phase II requires Legisla‐tive
authorization to issue $966.5 million
in bonds, structured to allow debt
service payments to begin in FY 2011.
The Executive recommends estab‐lishing
a Capital Acceleration Program
(CAPs) to create a pool of funds that the
universities can leverage to meet these
immediate needs. By creating the
funding mechanism under the CAPs
program, a long‐term funding solution
to meet the deferred maintenance and
capital requirements of Arizona’s
university system is established to
continue laying the groundwork for the
state’s future.
What the Executive Budget Does for …
COMMUNITY COLLEGES
The Executive recommends fully
funding community colleges, to include:
• $689,000 for Operating State Aid and
• $5.5 million for Equalization Aid.
What the Executive Budget Does for …
CHILDREN
AHCCCS KidsShare. All Arizona
children must have access to health care.
To that end, the Executive proposes that
the KidsShare program allow children
who are not eligible for Arizona Health
Care Cost Containment System
(AHCCCS) or KidsCare health insurance
to buy health insurance through the
State’s existing contracts with private
insurance companies. This will allow
children whose families cannot obtain
health insurance from other sources to
have insurance, subject to certain
conditions.
Permanency for Children. Adoption
is the process by which a parent’s legal
rights have been severed and a new
permanent placement must be provided
to a child. For some children in the
Child Protective Services (CPS) system,
families may wish to provide a stable
home for the child without severing a
relative’s parental rights. In these
instances, CPS seeks to place the child in
a permanent guardianship that, while
not severing the parents’ legal rights,
does provide a more permanent place‐ment
for the child. The Executive
Recommendation includes a $10.7
million General Fund increase to cover
new caseload growth in these programs
in FY 2009.
Children’s Services. The Depart‐ment
of Economic Security has in‐creased
its focus on strengthening and
maintaining families, but when this is
not possible children may be removed
from their homes. The Executive Rec‐ommendation
provides an additional
$15 million in supplemental funding in
FY 2008 and $15.2 million in FY 2009 to
continue to provide adequate funding
for a program that is critical to keeping
children safe.
Arizona Families First. Nearly 80%
of CPS families struggle with substance
abuse. Arizona Families First, a nation‐ally
recognized program, reduces the
burden on CPS workers by providing
treatment and support services to needy
families that might otherwise lose their
children to foster care. The Executive
Recommendation seeks to increase this
funding by $2.5 million as the need
continues to grow.
Child Fatality Review. For nearly 15
years, the Child Fatality Review pro‐gram
has reviewed all child fatalities in
the state to provide the community with
information on how to prevent child
deaths. Because funding for this pro‐gram
has remained flat, teams of
volunteers no longer receive funds
necessary for travel and supplies. The
Executive Recommendation includes
funding to ensure that every child
fatality is reviewed.
What the Executive Budget Does for …
HEALTHCARE
KidsCare Parents. The KidsCare
Parents program provides health
insurance to approximately 13,000
parents of children enrolled in the
KidsCare program. The program is
slated to end on June 30, 2008; conse‐quently,
the Executive Recommendation
provides $12.2 million General Fund to
fund the KidsCare Parents program
through FY 2009. The State will qualify
to receive enhanced federal funds for
these parents.
Title XIX Developmentally Dis‐abled
Long Term Care. The long‐term
care population includes individuals
with mental disabilities, cerebral palsy,
autism and epilepsy. Funding for this
program supports the Arizona Training
Program at Coolidge, smaller State‐operated
homes, case management,
home services, respite care and medical
services for the eligible population. The
Executive Recommendation includes
$33.7 million to fund an estimated 6.5%
caseload growth in the Title XIX devel‐opmentally
disabled population and a
3.5% capitation rate increase. These
funds will allow the State to provide
services to developmentally disabled
individuals at a level that is consistent
with federal law.
Early Intervention Services. Early
intervention is a continuum of devel‐opmental
services, such as service
coordination, therapy, caregivers, etc.,
designed to support the promotion of a
child’s development. The Executive
recommends $3.5 million to fund the
early detection of developmental
disabilities, such as autism, in children
ages three and younger.
Primary Care Provider Loan Re‐payment
Expansion. In support of
improving the availability of primary
care and dental services in underserved
areas, the Executive Recommendation
provides funding for 40 additional
doctors, dentists, nurse practitioners and
other primary care providers to receive
student loan repayments.
Nurses’ Compensation. To ensure
that State agencies offer the necessary
quantity and quality of nursing care, the
Executive Recommendation includes $1
million for a needed salary increase for
State‐employed nurses, including nurses
at the State Veterans’ Home.
What the Executive Budget Does for …
SENIORS
Protection of Vulnerable Adults.
Over 40,000 Arizonans receive institu‐tional
or community‐based long‐term
care services. Between now and 2022,
Arizona’s population over the age of 85
will double. Improvements must be
made to the system now, so that Ari‐zona
will be able to effectively meet the
needs of the increasing number of
seniors receiving assisted living services.
The Long Term Care Ombudsman
Program represents the interests of the
public by investigating and addressing
citizen complaints against nursing
FY 2009 Executive Budget 5
facilities. The Executive recommends
$431,800 for three additional long term
care ombudsmen and two statewide
positions for oversight. These positions
will continue to monitor nursing
facilities and address the complaints of
our senior citizens.
Nursing Facility Performance In‐centives.
The focus of nursing facility
regulation has historically been on
ensuring a minimum level of care and
correcting deficiencies. While these
efforts are crucial, the Executive Rec‐ommendation
proposes encouraging
facilities to meet the highest standards
of care, by providing incentives for
facilities that meet benchmarks for
improved care. To that end the recom‐mendation
includes $591,500 to leverage
an additional $3.9 million in federal and
county funds to provide pay‐for‐performance
incentives for facilities that
produce improved patient health
outcomes and lower medical cost.
What the Executive Budget Does for …
FAMILIES
Domestic Violence. In a typical 12‐
month period, approximately 8,000
requests for shelter from domestic
violence are denied. The Executive
Recommendation includes $3.3 million
from the General Fund to continue to
address the large unmet need for
emergency shelter beds for domestic
violence victims.
The Executive Recommendation will
shelter an additional 4,000 victims of
domestic violence. This third phase of a
four‐year initiative to eliminate the
unmet need for emergency shelter
addresses approximately one��half of the
remaining unmet need.
Family Planning. Planned pregnan‐cies
improve birth weights, reduce birth
defects and infant mortality and, in the
longer term, reduce child abuse and
neglect. The Executive Recommendation
includes funding for family planning
services targeted to uninsured or
underinsured men and women at
community colleges in Arizona. Family
planning efforts at community college
campuses would be more likely to reach
men and women who are in their early
20s. The highest percentage of un‐planned
pregnancies (33%) occurs in the
20‐24 age group. Additionally, the
Recommendation proposes expanding
AHCCCS eligibility for family planning
services by eliminating the eligibility
requirement that a person must have
been a member of the AHCCCS pro‐gram
for pregnant women. The pro‐posed
change would allow all eligible
members up to 150% of the federal
poverty level to access services, with the
federal government paying for 90% of
the costs. This effort will bring family
planning services to an estimated 25,900
people by June 2009.
What the Executive Budget Does for ...
CORRECTIONS
Prison Beds. The Executive recom‐mends,
in addition to the new facilities
authorized during the last Legislative
session, the conversion of the Depart‐ment
of Juvenile Corrections’ 144‐bed
Sunrise Unit to serve as an adult,
minimum security facility to be man‐aged
by DOC. The Sunrise unit is a
stand‐alone facility adjacent to the Lewis
Prison and has been vacant since 2004.
The Executive Budget also contains
recommendations for the continuation
of normal operations of the prison
system, including funding for the
marginal cost of additional inmates for
expenses such as food and clothing,
inflationary increases for outside
medical expenditures, and the continua‐tion
of the pilot program to use GPS
monitoring of parolees convicted of
crimes against children.
Jail Incarceration. To ease the
growth of the inmate population in
Arizona prisons, the Executive recom‐mends
that certain low‐level, nonviolent
types of offenders serve their sentences
in jails rather than be transferred to the
more expensive prison system. Imple‐mentation
is expected to cause the
number of needed prison beds to decline
incrementally to 2,273 by the end of FY
2009, saving $61 million in provisional
bed costs. In FY 2010, at full implemen‐tation,
total savings are estimated at $91
million.
Juvenile Corrections. The size of the
juvenile population at DJC’s secure care
facilities has remained fairly level;
nevertheless, DJC will require additional
funding in FY 2009. Important compo‐nents
of the recommended funding
include arsenic remediation at Adobe
Mountain School, maintenance of
facilities for life and safety dangers, and
nurse pay adjustments.
What the Executive Budget Does for...
LAW ENFORCEMENT
DPS Operations. The Executive rec��ommendation
for the Department of
Public Safety (DPS) provides officer pay
increases; increased staffing at the DPS
crime laboratories; assistance in the
Concealed Carry Weapons Unit and the
Vehicle Impoundment Hearings pro‐grams;
and continued support for basic
requirements such as vehicles, safety
equipment and communications needs.
Interoperable Communication Sys‐tem.
The Executive Recommendation
provides for completion an interoper‐able
communications system covering
an area occupied by 85% of the people in
the State. This will allow real‐time
communications among all public safety
agencies. The Executive recommends
$50 million through lease‐purchase
funding for the purpose of completing
this stage of the project.
Highway Photo Enforcement. The
Executive recommends enhancing photo
radar enforcement on the State’s high‐ways
and dedicating the resulting
revenue to DPS operations. Prompt
enactment and implementation of the
new highway photo Enforcement
legislation would provide an estimated
$90 million in the first year to respond to
growing needs in the critical areas of
border security, criminal investigations
public safety assistance on State high‐ways.
What the Executive Budget Does for ...
EMERGENCY PREPAREDNESS
Operations Center. The State’s
emergency response and preparedness
is coordinated through the State Emer‐gency
Operations Center (EOC) at
Papago Military Reservation. To up‐grade
the EOC to a level that will allow
it to support the State’s emergency
response mandate, the Executive
recommends lease‐purchase financing
for the EOC’s renovation and expansion.
Homeland Security. The need for
additional support for the State’s
homeland security agency was con‐firmed
by the State Auditor General’s
6 Budget Highlights
performance audit, which revealed a
need for the Department to improve its
financial controls and its grant awarding
and monitoring process.
To address the findings of the per‐formance
audit, the Executive Recom‐mendation
raises the Department’s
operational budget from 4.8% of total
grants administered to 6.5%, a level that
is still significantly lower than the
average for most federal grants.
What the Executive Budget Does for …
TRANSPORTATION
The Executive Recommendation will
enable the Department of Transporta‐tion
(ADOT) to:
• carry out its $6.6 billion five‐year
transportation construction program
for Fiscal Years 2008 through 2012,
• continue toward completion of the
$5.4 billion Maricopa Regional
Freeway System, and
• accelerate freeway construction
projects that have been approved
pursuant to Statewide Transporta‐tion
Acceleration Needs (STAN).
The Executive Recommendation
supports a $2.3 billion transportation
infrastructure program for FY 2009. The
funding level will provide $1.5 billion
for highway construction, $320 million
for debt service, and $477.3 million for
highway maintenance, administration
and motor vehicle services. In accor‐dance
with statutes, the actual expendi‐tures
levels are determined within the
scope of the Five Year Highway Con‐struction
Program as approved by the
State Transportation Board. The recom‐mendation
includes the following
funding initiatives.
• Controlled Access Highways ($114.5
million)
• Highway Maintenance and Safety
($5 million)
• Enhanced Driver Licenses ($3.6
million)
• Port‐of‐Entry Inspections ($308,300)
Airport Development. The FY 2009
Executive Recommendation provides
$28.9 million from the State Aviation
Fund for development and improve‐ment
of State, county and municipal
airports as approved by the State
Transportation Board.
What the Executive Budget Does for …
ECONOMIC DEVELOPMENT
The Arizona Economic Resource
Organization (AERO) is building a
community‐ and global‐based focus to
bring various talents and groups
together for the benefit of the state’s
urban and rural areas. AERO is an
umbrella that will serve to coordinate
and guide key efforts of the economic
development community. AERO is a
privately funded not‐for‐profit alliance
that will streamline, unify and enhance
Arizona’s economic development efforts
to enhance the state’s position in the
global marketplace.
Statistical Research. Accuracy in the
gathering and analysis of population
and labor statistics provided to existing
and prospective employers is vital to job
growth, particularly in rural Arizona.
The Executive recommends $774,400
to strengthen the Research Administra‐tion
in order to meet State and local
needs. The recommendation also funds
two labor market economist positions
and two previously unfunded vacant
research positions to assist and support
rural and small Arizona communities.
What the Executive Budget Does for …
PUBLIC RECREATION
Parks Maintenance. State parks an‐nually
provide historical preservation,
outdoor recreation and scenic beauty to
over two million people, nearly half of
whom visit from other states and
countries. The FY 2009 Executive Budget
includes $1.5 million for parks’ operat‐ing
expenses, which will allow the State
Parks Board to use a like amount from
the Enhancement Fund for deferred
maintenance costs. With this recom‐mendation,
the State will achieve
environmental compliance, prevent
deterioration of historical sites, and meet
structural needs such as roofing, foun‐dation
and water system repairs.
Game and Fish. Stewardship of the
state’s wildlife is a key aspect of natural
resources management.
OUI Reduction. Alcohol‐related acci‐dents
on Arizona waterways continue to
be a major problem. In a typical year,
about 41% of Arizona’s known boating
accident deaths are related to alcohol
consumption. A.R.S. § 5‐311 established
the Watercraft Operating Under the
Influence (OUI) Reduction Program, and
the Department continues to improve its
desired outcomes. The FY 2009 budget
includes $1 million from the Watercraft
Licensing Fund for the Watercraft OUI
Reduction Program.
Watercraft and Boating Safety Educa‐tion.
The FY 2009 budget provides an
increase of $1.3 million to support the
Department��s efforts in furthering
public information and boating safety
education. The funding will build on the
progress made in this program and will
enhance outreach activities to inform the
public on alcohol consumption and
related unsafe watercraft operations.
Vehicle Replacement. The budget in‐cludes
$1 million to provide for the
replacement of field vehicles and to
enable the Department to maintain its
regular schedule for equipment re‐placement.
Information Technology. The enacted
budget provides $260,000 in FY 2009 for
information technology enhancements.
Shooting Range Development. The
1,679‐acre Ben Avery Shooting Range is
the world’s largest publicly operated
recreational and competitive shooting
sports complex. In September 2006,
operational responsibility of the Clay
Target Center shifted from a private
entity to the Game and Fish Commis‐sion,
requiring additional financial
resources. The enacted budget includes
$500,000 in FY 2009 for required fund‐ing.
Urban Fishing. Higher fish produc‐tion,
the delivery of fish contracts, and
the addition of new lakes to the pro‐gram’s
inventory have driven up
operating costs. The enacted budget
provides an additional $37,000 in FY
2009 to meet increased costs and de‐mand
for services.
Radio Communications. The enacted
budget includes $250,000 FY 2009 for the
purchase of radio towers in the lower
and upper regions of the Colorado
River. Establishing radio communica‐tion
will enhance the Department’s field
operations network and support the
State’s enforcement and monitoring
with other entities.
Lower Gila Wildlife Area. The enacted
budget provides $75,000 in FY 2009 to
enhance the wildlife resources near the
Lower Gila Wildlife Area. The Depart‐
FY 2009 Executive Budget 7
ment plans to improve the area’s
irrigation capabilities and increase the
acreage of croplands planted for wildlife
food crops. Target species would
include small game such as white‐winged
and mourning dove, quail and
rabbits. Big game would include javelina
and mule deer.
Deer Restoration. The enacted budget
provides $200,000 from the Game and
Fish Fund for the North Kaibab Deer
Habitat restoration project. This initia‐tive
involves about 24,000 acres to
mitigate the damages and restore the
areas that were burned in 1996 Bridger
Complex wildfire.
Watercraft Cost Transfer. Finally, the
enacted budget provides an additional
$50,000 in FY 2009 to cover labor cost
allocations and related increases due to
wider enforcement areas and salary
adjustments approved by the Legisla‐ture.
What the Executive Budget Does for …
RURAL COMMUNITIES AND
AGRICULTURE
Rural Broadband Connectivity.
Broadband connectivity is an essential
economic development asset for rural
Arizona, and the Executive Recommen‐dation
includes $2 million for that
purpose. Rural broadband connectivity
will require a partnership between two
key State agencies – the Government
Information Technology Agency (GITA)
and the Department of Commerce –
working in cooperation with private
sector providers and rural communities.
Ports of Entry. Arizona’s ports of
entry are the first line of defense against
dangerous and costly pest infestations.
The Department of Agriculture esti‐mates
that 100,000 regulated trucks pass
through the State’s ports of entry
without inspection. The FY 2009 Execu‐tive
Recommendation provides a total of
20 positions (including 10 that were
approved during the 2007 Legislative
session) to open and staff inspections at
two ports of entry on the California
border, as well as conduct round‐the‐clock
inspections at Yuma. As a result of
this initiative, pest interceptions are
anticipated to increase from 12,185 in FY
2006 to 22,000 by FY 2009.
Food Safety and Meat Inspections.
The Executive recommends $594,300
and 10 positions to enhance the De‐partment
of Agriculture’s inspection
programs. Included in the recommenda‐tion
are $422,500 and 9.0 FTE inspector
positions to address workload increases
at the ports of entry.
The recommendation also includes
$171,800 to fund two vacant positions
and to hire an additional FTE inspector.
The recommendation strengthens the
Meat Inspection Program, which is
designed to ensure safe meat production
and compliance with industry stan‐dards.
Pesticides. Commercial users of pes‐ticide
are required to dispose of unused
pesticides and recycle large pesticide
containers. The FY 2009 Executive
Recommendation includes $100,000 to
help pesticide users comply with this
environmental protection requirement.
Laboratory. The Executive recom‐mendation
provides an additional
$336,000 to replace obsolete testing
equipment and otherwise meet the
growing burden of laboratory testing,
and to hire a microbiologist and an
entomologist.
What the Executive Budget Does for …
WATER AND NATURAL RESOURCES
Automated Groundwater Monitor‐ing.
Instances of drinking water degra‐dation
and other environmental prob‐lems
pose growing threats to the state’s
economy and quality of life. To address
those threats, the Department of Water
Resources’ budget for Fiscal Years 2008
and 2009 provides $500,000 and two
additional positions (in FY 2009) for
automated groundwater monitoring.
Conservation and Drought Pro‐grams.
The FY 2009 enacted budget
includes $500,000 and six positions to
constitute a new Conservation and
Drought Office to implement innovative
conservation strategies statewide.
Transportation Impact. Transporta‐tion
activities have a significant envi‐ronmental
impact. Federal and State
regulations require that ADOT imple‐ment
and manage an effective environ‐mental
stewardship program covering
all of its business areas. The Executive
recommendation includes $382,700 to
establish two Environmental Engineer
and two Environmental Planner posi‐tions
to help address workload in‐creases,
improve technical assessments
and enable ADOT to comply with
federal and State environmental laws.
Environmental Quality. The mis‐sion
of the Arizona Department of
Environmental Quality (ADEQ) is to
protect public health and the environ‐ment
through the enforcement of air,
water and land quality standards. The
FY 2009 budget includes several compo‐nents
designed to protect the environ‐ment
and public health, including:
• a statutory funding transfer to the
Water Quality Assurance Revolving
Fund (WQARF) to identify, assess
and clean up groundwater contami‐nation
caused by the release of haz‐ardous
substances;
• funding of $863,800 in FY 2009 to
address permitting backlogs and
workload increases in ADEQ’s Wa‐ter
Quality Division;
• $271,300 to strengthen the State’s
efforts to monitor cross‐boundary
hazardous waste shipments entering
the state at Douglas, Nogales and
San Luis;
• $100,000 and one position for haz‐ardous
air emergency response;
• $155,100 and two positions to over‐see
remediation along the Colorado
River and help protect the water
quality of the Colorado River against
a hexavalent chromium plume
caused by Pacific Gas & Electric near
Topock;
• $1 million and eight positions to
strengthen regulation and address
permit application backlogs related
to public water system wells, treat‐ment
plants, distribution systems,
line extensions and other drinking
water infrastructure;
• $150,000 and three positions to
implement a recycling assistance
program and to ensure compliance
with applicable recycling regulation;
and
• $211,800 and three positions for air
quality compliance support, to help
with the enforcement of Title V air
permits and related violations. ●
Budget Summary
STATE OF ARIZONA
SOURCES AND USES OF FUNDS
GENERAL FUND
(In Thousands)
FY 2008 FY 2009
FY 2007 Executive Executive
Actual Recommendation Recommendation
SOURCES OF FUNDS
Balance Forward 1,046,460.1 377,947.0 10,000.0
Adjustment to Balance Forward (23,555.0) 0.0 0.0
Base Revenues 10,108,900.7 10,208,103.3 10,842,600.1
Urban Revenue Sharing (551,230.7) (684,538.9) (717,127.6)
Urban Revenue Sharing FY03 and FY04 Repayment 0.0 0.0 (10,549.8)
Adjusted Base Revenues 9,557,670.1 9,523,564.4 10,114,922.7
SFB Building Renewal Transfer 1/ 60,080.5 0.0 0.0
Ladewig Refunds (80,735.9) 0.0 0.0
Unclaimed Property 0.0 45,000.0 0.0
Excess Balance Transfer from BSF 18,576.0 0.0 0.0
TOTAL SOURCES OF FUNDS 10,578,495.8 9,946,511.5 10,124,922.7
USES OF FUNDS
Operating Budgets 9,761,497.7 10,643,946.4 11,421,959.9
Operating Budget Supplementals 0.0 120,714.6 0.0
Payback K‐12 Rollover 2/ 191,000.0 0.0 0.0
Transfer to Rainy Day Fund (Budget Stabilization) 9,808.6 0.0 0.0
Nursing Pay Adjustment 0.0 1,000.0
Total Operating Budgets 9,962,306.3 10,764,661.0 11,422,959.9
Building Renewal and Capital Outlay 80,354.2 19,934.5 17,200.0
Highway Construction 245,000.0 0.0 0.0
Administrative Adjustments 75,105.5 97,700.0 45,211.6
Revertments (162,217.2) (75,352.6) (79,960.7)
Reserve for Ending Balance 10,000.0 10,000.0
USES OF FUNDS 10,200,548.8 10,816,942.9 11,415,410.7
ENDING BALANCE 377,947.0 (870,431.4) (1,290,488.0)
TOTAL USES OF FUNDS 10,578,495.8 9,946,511.5 10,124,922.7
Executive Recommendation for Budget Balancing
Agency Spending Reductions 214,055.4 139,580.0
Revenue Generation 186,000.0
Budget Stabilization Fund Transfer (Rainy Day Fund) 263,376.0 196,558.0
Delaying K‐12 State Aid Payment 297,000.0
Capital Financing 393,000.0 471,350.0
Total Executive Recommendation for Budget Balancing 870,431.4 1,290,488.0
2/ $191M K‐12 Rollover and $35M AZ Science Foundation were recorded as FY06 appropriations, but did not occur in FY06 as intended by the legislation
since the effective date of the appropriation was beyond the end of FY06. Therefore these amounts are shown in FY07.
1/ In FY06, School Facilities Board transferred $60 million more from the General Fund to its building renewal fund than it was entitled to. The adjusting
transfer was not made in FY06, but was done in FY07.
FY 2009 Executive Budget 9
10 General Fund Sources and Uses
GENERAL FUND
Sources and Uses of Funds
HE SOURCES AND USES of funds
document presents budget data on
projected revenue sources and expendi‐tures
for the General Fund.
For FY 2007, the data reflect actual
expenditures taken from the State’s
Accounting and Financial Information
System.
FY 2008 revenues reflect OSPB1 pro‐jections
of taxes, fees and other General
Fund revenue sources, while FY 2008
Uses of Funds reflect appropriations
made by the Legislature in the 2007
Legislative session for FY 2008.
FY 2009 sources and uses include
OSPB projections of taxes, fees and other
General Fund revenue sources and
estimates of expenditures in support of
the Executive FY 2009 Budget Recom‐mendation.
SOURCES OF FUNDS
Revenue Projections. The OSPB reve‐nue
estimating process involves partici‐pation
by representatives from the De‐partment
of Revenue, Department of
Economic Security, Arizona State Uni‐versity
College of Business and OSPB.
The process includes:
• Presentation of projection scenarios for
the State’s economy. Each participant
provides independent views of pro‐jection
scenarios based on various
projection techniques and models.
• Consensus reached on forecasts of eco‐nomic
variables, including personal in‐come,
employment and gross domestic
product. These variables serve as in‐puts
to the revenue projections.
Baseline, optimistic and pessimistic
scenarios are finalized.
• Presentation of revenue projections for
the “Big Three” tax sources based on
economic scenarios. Each participant
provides independent views on
revenue projections for the economic
scenarios. Revenue flows of recent
tax collections are analyzed for con‐sistency
with projections.
1 Governor’s Office of Strategic Planning and
Budgeting
• Blending of revenue projections by
OSPB to reflect an achievable reve‐nue
collection scenario.
Urban Revenue Sharing. Laws 2006,
Chapter 351 provided that for FY 2009,
cities and towns are to receive a special
one‐time Urban Revenue Sharing distri‐bution
of $10,549,800 as a repayment of
the reduction in the Urban Revenue
Sharing distribution percentage of 14.8%
in FY 2003 and FY 2004.
USES OF FUNDS
Operating Budget Supplementals. The
budget includes $120.7 million for sup‐plemental
appropriations for agencies in
FY 2008. This estimate reflects projected
shortfalls for the following departments:
AHCCCS: $12.3 million
Administration: 2.0 million
Economic Security: 29.5 million
Health Services: 9.9 million
School Facilities Board: 67.0 million
Nurses’ Compensation. The Executive
recognizes that growth in the demand
for health care continues to grow rap‐idly
within the state, which strains the
supply of health care workers, specifi‐cally
nurses. There is an expected short‐age
of 1,300 nurses across the state for
FY 2009, and this shortage will drive up
nurses’ wages. For State agencies to stay
competitive within the market, the
Executive Recommendation includes $1
million for a 2% salary increase in FY
2009. This represents an average in‐crease
of $1,226 per State‐employed
nurse per year.
Building Renewal and Capital Outlay.
The budget includes $17.2 million in
funding in FY 2009 for Capital Im‐provements
and Building Renewal.
Funding is included for the following
projects:
• to secure and replace non‐working
prison cell doors and locks through
the Corrections system,
• to repair and replace building sys‐tems,
including fire, emergency, air
ventilation and electrical systems at
several state buildings, and
• general building renewal.
Administrative Adjustments and Re‐vertments.
The budget includes an esti‐mate
of $45 million for administrative
adjustments in FY 2009, which reflect
funds that have been encumbered by
agencies for payment of obligations but
are carried over into another fiscal year.
Additionally, the budget incorporates
projections of unexpended or unencum‐bered
funds to be reverted to the Gen‐eral
Fund in FY 2009. These projections
reflect historical experience. ●
T
Actual Estimate Estimate
TAXES FY 2007 FY 2008 FY 2009
Corporate Income 986,170.0 935,500.0 974,700.0
Individual Income 3 ,735,703.7 3 ,746,090.0 4 ,071,230.0
Property Taxes 24,486.0 21,000.0 21,000.0
Sales and Use 4,457,529.0 4,633,170.0 4,905,060.0
Luxury Taxes 65,809.0 67,389.1 70,000.0
Insurance Premium Taxes 399,817.0 415,918.9 439,991.0
Estate Taxes (550.8) 0.0 0.0
Other Taxes 3,159.5 3,000.0 3,000.0
TOTAL TAXES 9 ,672,123.4 9 ,822,068.0 1 0,484,981.0
OTHER REVENUES
Licenses, Fees & Permits/Misc. 1 46,466.1 1 43,000.0 1 43,000.0
Interest Earnings 104,753.7 96,000.0 80,000.0
Lottery 52,922.0 40,000.0 40,000.0
Transfers & Reimbursements 19,508.9 33,178.0 20,000.0
Disproportionate Share 1 13,127.3 7 3,857.3 7 4,619.1
TOTAL OTHER REVENUES 4 36,778.0 3 86,035.3 3 57,619.1
TOTAL REVENUES 1 0,108,901.4 1 0,208,103.3 1 0,842,600.1
ADJUSTMENTS
Urban Revenue Sharing (551,230.7) (684,538.9) (727,677.4)
GRAND TOTAL REVENUES 9,557,670.7 9,523,564.4 10,114,922.7
(in thousands)
STATE OF ARIZONA
GENERAL FUND
REVENUE SUMMARY
FY 2007 THROUGH FY 2009
FY 2009 Executive Budget
11
General Fund Operating Budgets Summary
(Dollars in Thousands)
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Arizona Department of Administration 29,474.7 33,312.2 513.6 33,825.8 33,312.2 (5,906.9) 27,405.3
Office of Administrative Hearings 1,214.6 1,283.3 (4.5) 1,278.8 1,213.9 (4.5) 1,209.4
Arizona Department of Agriculture 11,333.1 12,481.6 (600.0) 11,881.6 12,117.5 326.9 12,444.4
Arizona Health Care Cost Containment System 1,132,470.2 1,269,136.0 8,390.4 1,277,526.4 1,269,136.0 248,190.1 1,517,326.1
Arizona Commission on the Arts 3,887.6 2,127.6 (100.0) 2,027.6 2,088.1 (10.0) 2,078.1
ASU ‐ Polytechnic 19,980.9 25,915.9 0.0 25,915.9 25,915.9 6,150.3 32,066.2
ASU ‐ Tempe 354,043.4 416,764.8 (5,250.0) 411,514.8 416,764.8 3,456.2 420,221.0
ASU ‐ West 49,096.1 53,604.4 (1,000.0) 52,604.4 53,604.4 3,216.4 56,820.8
Attorney General ‐ Department of Law 22,061.1 24,651.9 0.0 24,651.9 21,382.9 144.4 21,527.3
Auditor General 15,808.1 18,791.5 (563.0) 18,228.5 17,891.9 (265.0) 17,626.9
Arizona Biomedical Research Commission 0.0 1,000.0 0.0 1,000.0 1,000.0 0.0 1,000.0
State Capital Post‐Conviction Public Defender 23.4 737.9 (15.0) 722.9 1,979.2
Office
721.7 1,257.5
State Board for Charter Schools 752.7 1,129.5 0.0 1,129.5 1,051.0 0.0 1,051.0
Department of Commerce 11,802.2 15,925.1 (500.0) 15,425.1 15,722.2 1,179.2 16,901.4
Arizona Community Colleges 165,536.6 167,744.8 (1,000.0) 166,744.8 167,744.8 5,166.8 172,911.6
Corporation Commission 5,474.1 5,857.4 (175.7) 5,681.7 5,542.5 (175.7) 5,366.8
Department of Corrections 815,046.2 910,277.2 (19,416.9) 890,860.3 910,277.2 (11,613.5) 898,663.7
Arizona Criminal Justice Commission 4,103.5 2,202.0 (1,000.0) 1,202.0 4,102.0 (100.0) 4,002.0
Arizona State Schools for the Deaf and the Blind 19,790.2 22,010.4 0.0 22,010.4 20,681.3 65.9 20,747.2
Department of Economic Security 723,613.9 794,336.4 22,990.8 817,327.2 794,336.4 84,375.4 878,711.8
Department of Education 4,156,036.6 4,363,465.1 (4,900.0) 4,358,565.1 4,363,465.1 163,390.8 4,526,855.9
Department of Emergency and Military Affairs 11,078.0 14,581.6 (100.0) 14,481.6 14,283.2 413.6 14,696.8
Department of Environmental Quality 14,078.9 32,979.0 (1,600.0) 31,379.0 32,311.3 (750.0) 31,561.3
Governorʹs Office for Equal Opportunity 245.7 260.8 0.0 260.8 245.2 0.0 245.2
State Board of Equalization 644.7 672.9 (14.0) 658.9 653.5 (14.0) 639.5
Board of Executive Clemency 1,046.7 1,153.5 (60.0) 1,093.5 1,087.4 (60.0) 1,027.4
State Department of Financial Institutions 3,665.3 4,081.8 (200.0) 3,881.8 4,081.8 (51.0) 4,030.8
Department of Fire, Building and Life Safety 3,488.9 3,922.1 (300.0) 3,622.1 3,764.0 (199.5) 3,564.5
Arizona Geological Survey 1,023.0 1,151.9 (60.0) 1,091.9 1,073.9 (60.0) 1,013.9
Government Information Technology Agency 1,500.0 2,000.0 (100.0) 1,900.0 2,000.0 7,394.8 9,394.8
Office of the Governor 6,488.5 7,476.9 (225.0) 7,251.9 7,134.8 (225.0) 6,909.8
Department of Health Services 539,558.7 583,432.2 4,709.5 588,141.7 583,432.2 30,826.2 614,258.4
Arizona Historical Society 4,286.9 4,521.3 (80.0) 4,441.3 4,398.8 (15.0) 4,383.8
House of Representatives 11,350.2 14,276.5 0.0 14,276.5 13,854.8 0.0 13,854.8
Arizona Commission of Indian Affairs 221.8 237.7 (5.0) 232.7 223.3 (2.4) 220.9
Department of Insurance 7,710.5 7,800.8 (435.5) 7,365.3 7,365.8 (360.6) 7,005.2
Joint Legislative Budget Committee 1,133.8 3,040.9 0.0 3,040.9 2,948.6 0.0 2,948.6
Judiciary 123,369.5 128,221.5 (1,146.3) 127,075.2 128,221.5 0.0 128,221.5
Department of Juvenile Corrections 79,532.9 81,449.8 0.0 81,449.8 81,449.8 (1,500.0) 79,949.8
State Land Department 26,269.2 27,329.5 (750.0) 26,579.5 25,917.8 (750.0) 25,167.8
12 Budget Summary
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Law Enforcement Merit System Council 76.3 79.3 (2.0) 77.3 74.2 (2.0) 72.2
Legislative Council 4,732.2 5,717.1 0.0 5,717.1 5,576.1 0.0 5,576.1
Arizona State Library, Archives & Public Records 7,448.5 7,787.6 0.0 7,787.6 7,536.3 0.0 7,536.3
Department of Liquor Licenses and Control 3,469.3 3,646.2 (150.0) 3,496.2 3,534.1 (137.0) 3,397.1
Board of Medical Student Loans 1,440.9 1,500.0 0.0 1,500.0 1,500.0 0.0 1,500.0
State Mine Inspector 1,106.7 1,884.8 (17.0) 1,867.8 1,884.8 (115.0) 1,769.8
Department of Mines and Mineral Resources 843.2 950.8 (10.0) 940.8 839.9 (10.0) 829.9
Arizona Navigable Stream Adjudication 163.9 180.0 (4.0) 176.0 0.0
Commission
0.0 0.0
Northern Arizona University 128,262.5 160,868.8 0.0 160,868.8 160,868.8 8,654.0 169,522.8
State Board of Nursing 151.5 167.3 0.0 167.3 166.0 0.0 166.0
State Parks Board 26,829.8 28,212.2 (345.0) 27,867.2 28,400.0 (95.0) 28,305.0
Personnel Board 338.6 370.8 0.0 370.8 357.9 0.0 357.9
Arizona Pioneersʹ Home 1,227.0 1,260.0 0.0 1,260.0 1,236.0 0.0 1,236.0
Commission for Postsecondary Education 6,620.8 7,427.3 (5,300.0) 2,127.3 7,420.8 0.0 7,420.8
Prescott Historical Society of Arizona 752.2 780.7 (15.0) 765.7 734.0 (2.0) 732.0
Department of Public Safety 166,196.6 177,708.0 (1,721.1) 175,986.9 177,708.0 (142,476.9) 35,231.1
Arizona Department of Racing 2,748.8 2,851.1 (150.0) 2,701.1 2,747.9 (65.5) 2,682.4
Radiation Regulatory Agency 1,438.6 2,249.7 (80.0) 2,169.7 2,240.7 (20.0) 2,220.7
Arizona Rangersʹ Pension 13.0 13.4 0.0 13.4 13.7 0.0 13.7
Department of Real Estate 3,984.7 4,614.0 (230.8) 4,383.2 4,438.5 (217.5) 4,221.0
Arizona Board of Regents 14,775.7 20,598.0 0.0 20,598.0 20,598.0 0.0 20,598.0
Department of Revenue 71,639.0 76,942.1 (2,393.3) 74,548.8 71,849.2 6,629.4 78,478.6
School Facilities Board 413,761.5 532,695.1 (326,000.0) 206,695.1 532,695.1 (365,198.8) 167,496.3
Department of State ‐ Secretary of State 6,985.0 7,222.3 (212.0) 7,010.3 6,980.0 (5.0) 6,975.0
Senate 7,464.3 9,476.3 0.0 9,476.3 9,193.0 0.0 9,193.0
Governorʹs Office of Strategic Planning and 2,211.1 2,313.6 (69.4) 2,244.2 2,204.9
Budgeting
2,209.9 (5.0)
State Board of Tax Appeals 272.0 317.9 (6.3) 311.6 305.2 (1.0) 304.2
Arizona Office of Tourism 14,261.6 15,649.4 (1,000.0) 14,649.4 16,622.2 (300.0) 16,322.2
Department of Transportation 83.0 86.6 (2.0) 84.6 86.6 (2.0) 84.6
State Treasurer 5,404.5 5,616.7 (335.5) 5,281.2 5,616.7 (232.2) 5,384.5
Commission on Uniform State Laws 51.1 0.0 0.0 0.0 0.0 0.0 0.0
University of Arizona ‐ Health Sciences Center 69,098.5 80,954.2 0.0 80,954.2 80,954.2 1,353.7 82,307.9
University of Arizona ‐ Main Campus 320,798.1 362,389.2 (5,250.0) 357,139.2 362,389.2 392.8 362,782.0
Department of Veteransʹ Services 5,087.2 9,284.8 (430.0) 8,854.8 8,220.6 0.0 8,220.6
Department of Water Resources 22,068.9 24,074.6 (1,000.0) 23,074.6 24,167.7 (1,000.0) 23,167.7
Department of Weights and Measures 1,625.5 1,710.8 (100.0) 1,610.8 1,640.2 (10.0) 1,630.2
General Fund Operating Total 9,726,674.5 10,643,946.4 (347,820.0) 10,296,126.4 10,628,325.0 40,626.4 10,722,029.9
Statewide Adjustments 35,000.0 25,000.0 0.0 25,000.0 25,000.0 0.0 78,078.5
The FY 2009 Executive Budget column includes much of the Governorʹs Executive Recommendation for budget balancing included in
individual agency operating budgets.
FY 2009 Executive Budget 13
Actual Estimate Estimate
TAXES FY 2007 FY 2008 FY 2009
Motor Vehicle Fuel Tax 721,594.8 747,954.0 798,873.0
Property Taxes 2 3,054.8 2 3,700.0 2 4,600.0
Sales and Use Taxes 6,896.8 13,956.4 13,260.8
Luxury Taxes 246,946.4 179,011.7 179,559.8
Insurance Premium Tax 38,919.7 39,210.7 40,659.4
Motor Carrier License Tax 22,272.9 25,177.0 23,206.6
UST Contents Tax 51,035.5 53,939.8 51,969.4
Vehicle License Taxes 378,620.6 417,978.0 457,479.0
Other Taxes 4,969.1 12,054.0 12,645.0
TOTAL TAXES 1 ,494,310.6 1 ,512,981.6 1 ,602,253.0
OTHER REVENUES
Licenses, Fees & Permits 3 41,959.6 3 61,557.6 3 53,976.6
Charges for Service 1,543,672.9 1,556,595.6 1,617,848.6
Interest Earnings 88,000.7 57,712.2 56,754.5
Miscellaneous Revenues 304,035.2 328,208.6 319,784.5
Lottery 462,200.0 478,100.0 485,500.0
TOTAL OTHER REVENUES 2,739,868.4 2,782,174.0 2,833,864.2
OTHER FINANCING SOURCES
Transfers & Reimbursements 2 ,353,203.9 2 ,037,992.8 2 ,140,017.7
GRAND TOTAL REVENUES 6 ,587,382.9 6 ,333,148.4 6 ,576,134.9
(in thousands)
*Other Appropriated Funds Revenues include all revenues for funds which may only be partially subject to
statutory or legislative appropriation. The expenditures shown in the ʺOther Funds Budget Summaryʺ are
for the appropriated portion of these funds only and may represent only a small portion of the fundsʹ total
expenditures. There are several funds where a General Fund appropriation is deposited into an ʺOther
Appropriated Fundʺ and these deposits are reflected in the figures above. We have also included funds from
which the Governor has recommended balance transfers to the General Fund.
STATE OF ARIZONA
OTHER APPROPRIATED FUNDS
REVENUE SUMMARY
FY 2007 THROUGH FY 2009
14 Budget Summary
Other Appropriated Funds Operating Budgets Summary
(Dollars in Thousands)
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
State Board of Accountancy
Accountancy Board Fund 1,003.9 2,356.9 0.0 2,356.9 2,290.2 0.0 2,290.2
Agency Total 1,003.9 2,356.9 0.0 2,356.9 2,290.2 0.0 2,290.2
Acupuncture Board of Examiners
Acupuncture Board of Examiners Fund 96.6 130.5 0.0 130.5 125.5 0.0 125.5
Agency Total 96.6 130.5 0.0 130.5 125.5 0.0 125.5
Arizona Department of Administration
Personnel Division Fund 16,674.5 18,437.5 0.0 18,437.5 18,437.5 114.9 18,552.4
Capital Outlay Stabilization Fund 11,652.2 11,443.9 0.0 11,443.9 11,443.9 1,784.6 13,228.5
Watercraft Licensing Fund 796.0 0.0 0.0 0.0 0.0 0.0 0.0
Corrections Fund 651.8 741.7 0.0 741.7 741.7 0.0 741.7
Air Quality Fund 565.8 575.1 0.0 575.1 575.1 275.0 850.1
Special Employee Health Fund 4,202.9 5,630.7 0.0 5,630.7 5,630.7 0.0 5,630.7
Highway User Revenue Fund 0.0 150.0 0.0 150.0 150.0 (150.0) 0.0
Motor Pool Revolving Fund 10,356.2 11,787.9 0.0 11,787.9 11,787.9 0.0 11,787.9
State Surplus Property Fund 2,795.6 4,272.3 0.0 4,272.3 4,272.3 0.0 4,272.3
Admin ‐ Surplus Property/Federal Fund 212.1 444.3 0.0 444.3 444.3 0.0 444.3
Risk Management Fund 77,124.2 91,733.7 0.0 91,733.7 91,733.7 2,846.1 94,579.8
Automation Operations Fund 17,965.8 24,529.6 0.0 24,529.6 24,529.6 174.6 24,704.2
Telecommunications Fund 2,556.6 7,895.4 0.0 7,895.4 7,895.4 1,942.3 9,837.7
Payroll Clearing Fund 1,906.1 0.0 0.0 0.0 0.0 0.0 0.0
Agency Total 147,459.8 177,642.1 0.0 177,642.1 177,642.1 6,987.5 184,629.6
Office of Administrative Hearings
Healthcare Group Fund 0.6 14.5 0.0 14.5 14.5 0.0 14.5
Agency Total 0.6 14.5 0.0 14.5 14.5 0.0 14.5
Arizona Department of Agriculture
Agricultural Consulting/Training Program Fund 67.6 106.5 0.0 106.5 103.4 0.0 103.4
Agriculture Commercial Feed Fund 290.0 302.0 0.0 302.0 293.2 0.0 293.2
Egg and Egg Product Control Fund 584.3 905.9 0.0 905.9 866.7 0.0 866.7
Pesticide Fund 274.2 388.4 0.0 388.4 376.9 0.0 376.9
Agriculture Dangerous Plants Fund 21.4 40.0 0.0 40.0 40.0 100.0 140.0
Agriculture Seed Law Fund 41.3 54.5 0.0 54.5 53.2 0.0 53.2
Livestock Custody Fund 73.3 79.4 0.0 79.4 79.4 40.6 120.0
Fertilizer Materials Fund 290.6 308.0 0.0 308.0 298.5 20.0 318.5
Citrus, Fruit, and Vegetable Revolving Fund 862.0 1,092.4 0.0 1,092.4 1,044.9 0.0 1,044.9
Aquaculture Fund 7.6 9.2 0.0 9.2 9.2 0.0 9.2
AZ Protected Native Plant Fund 113.3 195.3 0.0 195.3 186.5 0.0 186.5
Agency Total 2,625.6 3,481.6 0.0 3,481.6 3,351.9 160.6 3,512.5
State Board of Appraisal
Board of Appraisal Fund 553.2 623.6 0.0 623.6 593.7 0.0 593.7
Agency Total 553.2 623.6 0.0 623.6 593.7 0.0 593.7
FY 2009 Executive Budget 15
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Arizona Health Care Cost Containment System
Tobacco Tax and Health Care Fund 76,248.9 78,306.1 0.0 78,306.1 78,306.1 (1,533.7) 76,772.4
Tobacco Products Tax Fund 28,537.3 29,264.1 0.0 29,264.1 29,264.1 (332.8) 28,931.3
Childrenʹs Health Insurance Program Fund 125,487.8 146,611.0 0.0 146,611.0 146,611.0 16,662.6 163,273.6
Budget Neutrality Compliance Fund 2,531.9 2,683.1 0.0 2,683.1 2,683.1 146.5 2,829.6
Healthcare Group Fund 3,766.5 8,468.7 0.0 8,468.7 8,468.7 (1,947.7) 6,521.0
Temporary Medical Coverage Fund 1,915.4 1,976.4 0.0 1,976.4 1,976.4 1,508.1 3,484.5
Family Planning Fund 0.0 0.0 0.0 0.0 0.0 309.9 309.9
Agency Total 238,487.8 267,309.4 0.0 267,309.4 267,309.4 14,812.9 282,122.3
ASU �� Polytechnic
ASU Collections ‐ Appropriated Fund 16,548.4 21,338.4 0.0 21,338.4 21,338.4 0.0 21,338.4
Technology and Research Initiative Fund 2,000.0 2,000.0 0.0 2,000.0 2,000.0 0.0 2,000.0
Agency Total 18,548.4 23,338.4 0.0 23,338.4 23,338.4 0.0 23,338.4
ASU ‐ Tempe
ASU Collections ‐ Appropriated Fund 208,656.4 233,624.0 0.0 233,624.0 233,624.0 0.0 233,624.0
Agency Total 208,656.4 233,624.0 0.0 233,624.0 233,624.0 0.0 233,624.0
ASU ‐ West
ASU Collections ‐ Appropriated Fund 20,322.0 23,057.4 0.0 23,057.4 23,057.4 0.0 23,057.4
Technology and Research Initiative Fund 1,600.0 1,600.0 0.0 1,600.0 1,600.0 0.0 1,600.0
Agency Total 21,922.0 24,657.4 0.0 24,657.4 24,657.4 0.0 24,657.4
Attorney General ‐ Department of Law
Consumer Protection/Fraud Revolving Fund 1,341.9 2,214.6 0.0 2,214.6 2,128.3 0.0 2,128.3
Attorney General Antitrust Revolving Fund 314.1 243.2 0.0 243.2 232.2 0.0 232.2
Attorney General Collection Enforcement Fund 3,821.4 4,916.9 0.0 4,916.9 4,574.7 0.0 4,574.7
Attorney General Agency Services Fund 11,545.0 13,477.1 0.0 13,477.1 12,329.3 0.0 12,329.3
Victims Rights Fund 3,256.6 3,282.9 0.0 3,282.9 3,266.0 0.0 3,266.0
Risk Management Fund 8,416.3 9,958.8 0.0 9,958.8 9,189.7 0.0 9,189.7
Attorney General Legal Services Cost Allocation
Fund
6,497.1 6,775.9 0.0 6,775.9 6,193.6 0.0 6,193.6
Agency Total 35,192.4 40,869.4 0.0 40,869.4 37,913.8 0.0 37,913.8
Automobile Theft Authority
Automobile Theft Authority Fund 5,202.7 5,551.2 0.0 5,551.2 5,812.9 0.0 5,812.9
Agency Total 5,202.7 5,551.2 0.0 5,551.2 5,812.9 0.0 5,812.9
Board of Barber Examiners
Barber Examiners Board Fund 230.7 346.5 0.0 346.5 318.1 0.0 318.1
Agency Total 230.7 346.5 0.0 346.5 318.1 0.0 318.1
Board of Behavioral Health Examiners
Behavioral Health Examiner Fund 1,203.3 1,394.4 0.0 1,394.4 1,324.2 0.0 1,324.2
Agency Total 1,203.3 1,394.4 0.0 1,394.4 1,324.2 0.0 1,324.2
Arizona Biomedical Research Commission
Health Research Fund 500.0 500.0 0.0 500.0 500.0 0.0 500.0
Agency Total 500.0 500.0 0.0 500.0 500.0 0.0 500.0
16 Budget Summary
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
State Board of Chiropractic Examiners
Chiropractic Examiners Board Fund 474.8 523.5 0.0 523.5 506.0 0.0 506.0
Agency Total 474.8 523.5 0.0 523.5 506.0 0.0 506.0
Department of Commerce
Lottery Fund 271.5 287.3 0.0 287.3 275.2 0.0 275.2
Commerce Development Bond Fund 99.4 145.4 0.0 145.4 139.5 0.0 139.5
Commerce and Economic Development Fund 2,779.4 2,318.6 0.0 2,318.6 2,276.7 0.0 2,276.7
Oil Overcharge Fund 123.0 184.0 0.0 184.0 176.0 0.0 176.0
Agency Total 3,273.3 2,935.3 0.0 2,935.3 2,867.4 0.0 2,867.4
Corporation Commission
Utility Regulation Revolving Fund 12,515.7 14,049.3 0.0 14,049.3 13,486.3 0.0 13,486.3
Pipeline Safety Revolving Fund 0.0 55.4 0.0 55.4 0.0 0.0 0.0
Security Regulatory and Enforcement Fund 3,454.9 3,976.8 0.0 3,976.8 3,822.3 0.0 3,822.3
Public Access Fund 3,336.7 4,385.4 0.0 4,385.4 4,332.6 338.3 4,670.9
Securities Investment Management Fund 1,865.1 935.1 0.0 935.1 889.7 0.0 889.7
Arizona Arts Trust Fund 46.1 51.3 0.0 51.3 48.3 0.0 48.3
Agency Total 21,218.5 23,453.3 0.0 23,453.3 22,579.2 338.3 22,917.5
Department of Corrections
Corrections Fund 26,596.9 29,054.7 0.0 29,054.7 29,054.7 0.0 29,054.7
State Education Fund for Correctional Education
Fund
917.7 1,161.4 0.0 1,161.4 1,161.4 (739.5) 421.9
DOC ‐ Alcohol Abuse Treatment Fund 218.1 599.3 0.0 599.3 599.3 1,400.0 1,999.3
Transition Office Fund 0.0 180.0 0.0 180.0 180.0 0.0 180.0
Transition Program Drug Treatment Fund 259.0 600.0 0.0 600.0 600.0 0.0 600.0
Prison Construction and Operations Fund 10,250.0 17,626.6 0.0 17,626.6 17,626.6 (1,976.6) 15,650.0
Penitentiary Land Earnings Fund 858.6 2,925.4 0.0 2,925.4 2,925.4 (1,201.2) 1,724.2
State Charitable, Penal & Reformatory Land
Earnings Fund
482.6 570.0 0.0 570.0 570.0 3,901.2 4,471.2
Agency Total 39,582.9 52,717.4 0.0 52,717.4 52,717.4 1,383.9 54,101.3
Board of Cosmetology
Cosmetology Board Fund 1,662.2 1,855.6 0.0 1,855.6 1,705.4 0.0 1,705.4
Agency Total 1,662.2 1,855.6 0.0 1,855.6 1,705.4 0.0 1,705.4
Arizona Criminal Justice Commission
Criminal Justice Enhancement Fund 567.7 955.0 0.0 955.0 780.6 0.0 780.6
Victim Compensation and Assistance Fund 2,873.3 3,800.0 0.0 3,800.0 3,800.0 0.0 3,800.0
State Aid to County Attorneys Fund 877.5 1,052.5 0.0 1,052.5 1,052.5 0.0 1,052.5
State Aid to Indigent Defense Fund 833.2 999.2 0.0 999.2 999.2 0.0 999.2
Agency Total 5,151.7 6,806.7 0.0 6,806.7 6,632.3 0.0 6,632.3
Arizona State Schools for the Deaf and the Blind
Schools for the Deaf and Blind Fund 13,673.5 14,317.6 0.0 14,317.6 14,695.4 0.0 14,695.4
Agency Total 13,673.5 14,317.6 0.0 14,317.6 14,695.4 0.0 14,695.4
Commission for the Deaf and the Hard of Hearing
Telecom for the Deaf Fund 4,076.2 5,448.1 0.0 5,448.1 5,387.3 0.0 5,387.3
Agency Total 4,076.2 5,448.1 0.0 5,448.1 5,387.3 0.0 5,387.3
FY 2009 Executive Budget 17
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
State Board of Dental Examiners
Dental Board Fund 1,026.3 1,145.8 0.0 1,145.8 1,072.6 0.0 1,072.6
Agency Total 1,026.3 1,145.8 0.0 1,145.8 1,072.6 0.0 1,072.6
State Board of Dispensing Opticians
Dispensing Opticians Board Fund 109.8 127.4 0.0 127.4 120.1 0.0 120.1
Agency Total 109.8 127.4 0.0 127.4 120.1 0.0 120.1
Arizona Drug and Gang Prevention Resource Center
Drug and Gang Prevention Fund 271.5 305.8 0.0 305.8 295.8 0.0 295.8
Intergovernmental Agreements and Grant Funds
Fund
265.0 336.6 0.0 336.6 320.6 0.0 320.6
Agency Total 536.5 642.4 0.0 642.4 616.4 0.0 616.4
Department of Economic Security
Tobacco Tax and Health Care Fund 70.4 200.0 0.0 200.0 200.0 0.0 200.0
Workforce Investment Grant Fund 38,205.2 55,937.2 0.0 55,937.2 55,937.2 0.0 55,937.2
Temporary Assistance for Needy Families
(TANF) Fund
213,483.9 234,652.8 0.0 234,652.8 234,652.8 6.5 234,659.3
Child Care and Development Fund 104,223.1 117,652.5 0.0 117,652.5 117,652.5 (5,500.0) 112,152.5
Special Administration Fund 19.2 2,206.0 0.0 2,206.0 2,206.0 (460.0) 1,746.0
Child Support Enforcement Administration Fund 14,941.5 15,119.6 0.0 15,119.6 15,119.6 1,029.0 16,148.6
Domestic Violence Shelter Fund 1,700.0 1,700.0 0.0 1,700.0 1,700.0 0.0 1,700.0
Child Abuse Prevention Fund 787.9 1,576.9 0.0 1,576.9 1,576.9 0.0 1,576.9
Children and Family Services Training Program
Fund
75.5 209.6 0.0 209.6 209.6 0.0 209.6
Public Assistance Collections Fund 297.3 517.0 0.0 517.0 517.0 0.0 517.0
Department Long‐Term Care System Fund 20,552.8 25,000.9 0.0 25,000.9 25,000.9 760.5 25,761.4
Spinal and Head Injuries Trust Fund 1,892.4 2,570.9 0.0 2,570.9 2,570.9 0.0 2,570.9
Homeless Trust Fund 886.3 0.0 0.0 0.0 0.0 0.0 0.0
Utility Assistance Fund 500.0 500.0 0.0 500.0 500.0 (500.0) 0.0
Risk Management Fund 271.5 271.5 0.0 271.5 271.5 0.0 271.5
Indirect Cost Recovery Fund 0.0 1,000.0 0.0 1,000.0 1,000.0 0.0 1,000.0
Reed Act Fund 0.0 3,495.7 0.0 3,495.7 3,495.7 1,740.9 5,236.6
Agency Total 397,907.0 462,610.6 0.0 462,610.6 462,610.6 (2,923.1) 459,687.5
Department of Education
Teacher Certification Fund 2,007.3 2,406.5 0.0 2,406.5 2,406.5 277.8 2,684.3
School Accountability Fund 2,473.8 0.0 0.0 0.0 0.0 0.0 0.0
School Accountability Fund Prop 301 Fund 5,286.1 7,000.0 0.0 7,000.0 7,000.0 0.0 7,000.0
English Learner Class Personnel Bonus Fund (20.8) 0.0 0.0 0.0 0.0 0.0 0.0
Public Institution Permanent School Earnings
Fund
45,220.7 45,220.7 0.0 45,220.7 45,220.7 0.0 45,220.7
School Improvement Revenue Bond Debt Svc
Fund
1,865.4 0.0 0.0 0.0 0.0 0.0 0.0
Agency Total 56,832.5 54,627.2 0.0 54,627.2 54,627.2 277.8 54,905.0
18 Budget Summary
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Department of Emergency and Military Affairs
Emergency Response Fund 95.6 132.7 0.0 132.7 132.7 0.0 132.7
Agency Total 95.6 132.7 0.0 132.7 132.7 0.0 132.7
Department of Environmental Quality
DEQ Emissions Inspection Fund 32,558.7 37,490.6 0.0 37,490.6 37,419.7 0.0 37,419.7
Hazardous Waste Management Fund 271.4 795.0 0.0 795.0 780.0 0.0 780.0
Air Quality Fund 3,315.0 5,250.5 0.0 5,250.5 5,152.5 0.0 5,152.5
Clean Air In‐Lieu Fee Account 294.5 0.0 0.0 0.0 0.0 0.0 0.0
Underground Storage Tank Revolving Fund 2.3 22.0 0.0 22.0 22.0 0.0 22.0
Recycling Fund 2,319.5 2,331.1 0.0 2,331.1 2,319.8 0.0 2,319.8
Permit Administration Fund 5,040.4 6,038.5 0.0 6,038.5 5,890.3 739.9 6,630.2
Solid Waste Fee Fund 811.1 1,511.2 0.0 1,511.2 1,483.1 0.0 1,483.1
Used Oil Fund 6.5 137.8 0.0 137.8 137.3 0.0 137.3
Water Quality Fee Fund 2,788.8 5,929.0 0.0 5,929.0 5,839.1 0.0 5,839.1
Indirect Cost Fund 11,825.5 10,768.9 0.0 10,768.9 10,531.0 0.0 10,531.0
Agency Total 59,233.8 70,274.6 0.0 70,274.6 69,574.8 739.9 70,314.7
Arizona Exposition & State Fair
Coliseum and Expo Center Fund 12,952.5 16,358.0 0.0 16,358.0 16,066.1 0.0 16,066.1
Agency Total 12,952.5 16,358.0 0.0 16,358.0 16,066.1 0.0 16,066.1
State Department of Financial Institutions
Receivership Revolving Fund 0.0 0.0 0.0 0.0 0.0 1,068.2 1,068.2
Agency Total 0.0 0.0 0.0 0.0 0.0 1,068.2 1,068.2
State Board of Funeral Directors & Embalmers
Funeral Directors and Embalmers Fund 333.2 353.9 0.0 353.9 340.6 0.0 340.6
Agency Total 333.2 353.9 0.0 353.9 340.6 0.0 340.6
Arizona Game & Fish Department
Game and Fish Fund 25,496.7 31,096.0 0.0 31,096.0 30,026.6 0.0 30,026.6
Game and Fish Watercraft License Fund 2,846.1 6,178.9 0.0 6,178.9 5,941.8 0.0 5,941.8
Game/Non‐game Fund 187.6 333.1 0.0 333.1 323.2 0.0 323.2
Waterfowl Conservation Fund 13.4 43.4 0.0 43.4 43.4 0.0 43.4
Wildlife Endowment Fund 0.0 16.0 0.0 16.0 16.0 0.0 16.0
Wildlife Habitat Restoration and Enhancement
Fund
1,608.2 0.0 0.0 0.0 0.0 0.0 0.0
Agency Total 30,152.0 37,667.4 0.0 37,667.4 36,351.0 0.0 36,351.0
Department of Gaming
Lottery Fund 300.0 300.0 0.0 300.0 300.0 0.0 300.0
Permanent Tribal‐State Compact Fund 1,703.1 2,259.7 0.0 2,259.7 2,173.9 0.0 2,173.9
Arizona Benefits Fund 9,453.2 13,001.3 0.0 13,001.3 13,781.9 0.0 13,781.9
Agency Total 11,456.3 15,561.0 0.0 15,561.0 16,255.8 0.0 16,255.8
Government Information Technology Agency
Information Technology Fund 2,610.9 2,841.0 0.0 2,841.0 2,758.6 0.0 2,758.6
State Web Portal Fund 0.0 3,700.0 0.0 3,700.0 5,000.0 0.0 5,000.0
Agency Total 2,610.9 6,541.0 0.0 6,541.0 7,758.6 0.0 7,758.6
FY 2009 Executive Budget 19
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Department of Health Services
Tobacco Tax and Health Care Fund 34,543.9 36,324.8 0.0 36,324.8 36,324.8 0.0 36,324.8
Capital Outlay Stabilization Fund 1,542.5 1,578.1 0.0 1,578.1 1,578.1 0.0 1,578.1
Child Care and Development Fund 773.9 829.2 0.0 829.2 829.2 0.0 829.2
Emergency Medical Services Operating Fund 4,643.2 5,360.5 0.0 5,360.5 5,360.5 2,647.2 8,007.7
Newborn Screening Program Fund 4,752.6 6,829.6 0.0 6,829.6 6,829.6 0.0 6,829.6
Substance Abuse Services Fund 2,500.0 2,500.0 0.0 2,500.0 2,500.0 0.0 2,500.0
Nursing Care Institution Protection Fund 101.7 438.0 0.0 438.0 438.0 (400.0) 38.0
Environmental Lab License Revolving Fund 583.1 976.4 0.0 976.4 976.4 0.0 976.4
Child Fatality Review Fund 99.8 100.0 0.0 100.0 100.0 0.0 100.0
Vital Records Electronic Systems Fund 215.1 502.2 0.0 502.2 502.2 0.0 502.2
Hearing and Speech Professionals Fund 230.6 343.2 0.0 343.2 343.2 0.0 343.2
The Arizona State Hospital Fund 7,964.6 6,032.6 0.0 6,032.6 6,032.6 0.0 6,032.6
DHS State Hospital Land Earnings Fund 315.9 350.0 0.0 350.0 350.0 0.0 350.0
DHS ‐ Indirect Cost Fund 7,189.0 9,053.0 0.0 9,053.0 9,053.0 0.0 9,053.0
Family Planning Fund 0.0 0.0 0.0 0.0 0.0 500.0 500.0
Agency Total 65,455.9 71,217.6 0.0 71,217.6 71,217.6 2,747.2 73,964.8
Arizona Historical Society
Capital Outlay Stabilization Fund 193.7 193.2 0.0 193.2 193.7 0.0 193.7
Agency Total 193.7 193.2 0.0 193.2 193.7 0.0 193.7
Board of Homeopathic Medical Examiners
Homeopathic Medical Examiners Fund 87.5 97.5 0.0 97.5 91.5 22.5 114.0
Agency Total 87.5 97.5 0.0 97.5 91.5 22.5 114.0
Arizona Department of Housing
Housing Trust Fund 703.8 897.3 0.0 897.3 909.3 0.0 909.3
Agency Total 703.8 897.3 0.0 897.3 909.3 0.0 909.3
Industrial Commission of Arizona
Industrial Commission Admin Fund 17,955.9 20,033.0 0.0 20,033.0 19,416.2 0.0 19,416.2
Agency Total 17,955.9 20,033.0 0.0 20,033.0 19,416.2 0.0 19,416.2
Department of Insurance
Tobacco Tax and Health Care Fund 0.0 200.0 0.0 200.0 0.0 0.0 0.0
Captive Insurance Regulatory/Supervision Fund 25.0 0.0 0.0 0.0 0.0 0.0 0.0
Agency Total 25.0 200.0 0.0 200.0 0.0 0.0 0.0
Judiciary
Supreme Court CJEF Disbursements Fund 7,943.0 10,120.4 0.0 10,120.4 10,120.4 0.0 10,120.4
Judicial Collection ‐ Enhancement Fund 12,489.3 14,807.7 0.0 14,807.7 14,807.7 0.0 14,807.7
Defensive Driving Fund 3,322.6 5,419.3 0.0 5,419.3 5,419.3 0.0 5,419.3
Court Appointed Special Advocate Fund 3,381.3 3,456.0 0.0 3,456.0 3,456.0 0.0 3,456.0
Confidential Intermediary Fund 408.5 488.9 0.0 488.9 488.9 0.0 488.9
Drug Treatment and Education Fund 494.1 500.0 0.0 500.0 500.0 0.0 500.0
State Aid to Courts Fund 2,444.5 3,945.9 0.0 3,945.9 3,945.9 0.0 3,945.9
Agency Total 30,483.3 38,738.2 0.0 38,738.2 38,738.2 0.0 38,738.2
20 Budget Summary
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Department of Juvenile Corrections
Juvenile Corrections CJEF Dist Fund 685.3 689.8 0.0 689.8 689.8 0.0 689.8
State Education Fund for Committed Youth Fund 2,638.3 2,682.5 0.0 2,682.5 2,682.5 0.0 2,682.5
Endowments/Land Earnings Fund 1,094.9 1,098.6 0.0 1,098.6 1,098.6 3,241.8 4,340.4
Risk Management Fund 340.0 0.0 0.0 0.0 0.0 0.0 0.0
Agency Total 4,758.5 4,470.9 0.0 4,470.9 4,470.9 3,241.8 7,712.7
State Land Department
Environmental Special Plate Fund 214.6 220.0 0.0 220.0 220.0 0.0 220.0
Due Diligence Fund 478.3 500.0 0.0 500.0 500.0 0.0 500.0
Risk Management Fund 169.5 0.0 0.0 0.0 0.0 0.0 0.0
Agency Total 862.4 720.0 0.0 720.0 720.0 0.0 720.0
Arizona State Library, Archives & Public Records
Records Services Fund 584.9 680.6 0.0 680.6 662.5 0.0 662.5
Agency Total 584.9 680.6 0.0 680.6 662.5 0.0 662.5
Arizona State Lottery Commission
Lottery Fund 66,496.3 70,181.8 0.0 70,181.8 70,486.7 0.0 70,486.7
Agency Total 66,496.3 70,181.8 0.0 70,181.8 70,486.7 0.0 70,486.7
Arizona Medical Board
Medical Examiners Board Fund 5,307.8 5,849.1 0.0 5,849.1 5,567.7 0.0 5,567.7
Agency Total 5,307.8 5,849.1 0.0 5,849.1 5,567.7 0.0 5,567.7
Board of Medical Student Loans
Medical Student Scholarship Fund 1,176.9 0.0 0.0 0.0 0.0 0.0 0.0
Med Student Loan Fund 309.8 309.8 0.0 309.8 309.8 0.0 309.8
Agency Total 1,486.7 309.8 0.0 309.8 309.8 0.0 309.8
State Mine Inspector
Aggregate Mining Reclamation Fund 262.0 303.8 0.0 303.8 303.8 4.2 308.0
Risk Management Fund 0.0 0.0 0.0 0.0 0.0 460.0 460.0
Agency Total 262.0 303.8 0.0 303.8 303.8 464.2 768.0
Naturopathic Physicians Board of Medical Examiners
Naturopathic Board Fund 493.1 611.3 0.0 611.3 584.0 0.0 584.0
Agency Total 493.1 611.3 0.0 611.3 584.0 0.0 584.0
Northern Arizona University
NAU Collections ‐ Appropriated Fund 49,400.2 47,723.2 0.0 47,723.2 47,723.2 0.0 47,723.2
Agency Total 49,400.2 47,723.2 0.0 47,723.2 47,723.2 0.0 47,723.2
State Board of Nursing
Nursing Board Fund 3,392.1 3,816.1 328.2 4,144.3 3,461.5 561.3 4,022.8
Agency Total 3,392.1 3,816.1 328.2 4,144.3 3,461.5 561.3 4,022.8
Nursing Care Ins. Admin. Examiners
Nursing Care Institution Admin/ACHMC Fund 236.2 377.0 0.0 377.0 358.7 0.0 358.7
Agency Total 236.2 377.0 0.0 377.0 358.7 0.0 358.7
Board of Occupational Therapy Examiners
Occupational Therapy Fund 194.0 247.0 0.0 247.0 239.9 0.0 239.9
Agency Total 194.0 247.0 0.0 247.0 239.9 0.0 239.9
FY 2009 Executive Budget 21
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
State Board of Optometry
Board of Optometry Fund 167.4 203.5 0.0 203.5 194.4 0.0 194.4
Agency Total 167.4 203.5 0.0 203.5 194.4 0.0 194.4
Arizona Board of Osteopathic Examiners
Osteopathic Examiners Board Fund 557.1 694.8 0.0 694.8 660.6 0.0 660.6
Agency Total 557.1 694.8 0.0 694.8 660.6 0.0 660.6
State Parks Board
Reservation Surcharge Revolving Fund 270.8 541.1 0.0 541.1 522.1 0.0 522.1
Boating Safety Fund 2,323.8 1,092.7 0.0 1,092.7 1,092.7 0.0 1,092.7
State Parks Enhancement Fund 8,404.3 7,701.9 0.0 7,701.9 6,868.3 0.0 6,868.3
Agency Total 10,998.9 9,335.7 0.0 9,335.7 8,483.1 0.0 8,483.1
Arizona State Board of Pharmacy
Pharmacy Board Fund 1,551.5 2,520.8 0.0 2,520.8 1,846.5 0.0 1,846.5
Agency Total 1,551.5 2,520.8 0.0 2,520.8 1,846.5 0.0 1,846.5
Board of Physical Therapy Examiners
Physical Therapy Fund 288.7 393.7 0.0 393.7 349.6 0.0 349.6
Agency Total 288.7 393.7 0.0 393.7 349.6 0.0 349.6
Arizona Pioneersʹ Home
Pioneersʹ Home State Charitable Earnings Fund 3,467.6 3,558.4 0.0 3,558.4 3,524.2 0.0 3,524.2
Pioneersʹ Home Minersʹ Hospital Fund 1,594.8 1,751.0 0.0 1,751.0 1,685.6 0.0 1,685.6
Agency Total 5,062.4 5,309.4 0.0 5,309.4 5,209.8 0.0 5,209.8
State Board of Podiatry Examiners
Podiatry Examiners Board Fund 104.4 144.3 0.0 144.3 138.8 0.0 138.8
Agency Total 104.4 144.3 0.0 144.3 138.8 0.0 138.8
Commission for Postsecondary Education
Postsecondary Education Fund 2,109.5 2,955.2 0.0 2,955.2 2,941.1 0.0 2,941.1
Agency Total 2,109.5 2,955.2 0.0 2,955.2 2,941.1 0.0 2,941.1
State Board for Private Postsecondary Education
Private Postsecondary Education Fund 311.2 336.6 0.0 336.6 318.4 0.0 318.4
Agency Total 311.2 336.6 0.0 336.6 318.4 0.0 318.4
State Board of Psychologist Examiners
Psychologist Examiners Board Fund 336.9 389.8 0.0 389.8 381.9 0.0 381.9
Agency Total 336.9 389.8 0.0 389.8 381.9 0.0 381.9
22 Budget Summary
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Department of Public Safety
State Highway Fund 10,000.0 10,000.0 0.0 10,000.0 10,000.0 53,000.0 63,000.0
Arizona Highway Patrol Fund 18,644.8 21,321.4 0.0 21,321.4 21,321.4 671.5 21,992.9
Safety Enforcement and Transportation
Infrastructure Fund
0.0 1,564.1 0.0 1,564.1 1,564.1 0.0 1,564.1
Crime Laboratory Assessment Fund 5,282.4 5,881.4 0.0 5,881.4 5,881.4 310.4 6,191.8
Motor Vehicle Liability Insurance Enforcement
Fund
1,512.0 0.0 0.0 0.0 0.0 0.0 0.0
Auto Fingerprint Identification Fund 3,119.6 3,299.2 0.0 3,299.2 3,299.2 0.0 3,299.2
DNA Identification System Fund 2,753.3 5,750.1 0.0 5,750.1 5,750.1 597.8 6,347.9
Motorcycle Safety Fund 153.8 205.0 0.0 205.0 205.0 0.0 205.0
Parity Compensation Fund 2,768.1 3,398.3 0.0 3,398.3 3,398.3 1,500.1 4,898.4
Highway User Revenue Fund 10,000.0 10,000.0 0.0 10,000.0 10,000.0 0.0 10,000.0
Criminal Justice Enhancement Fund 3,186.7 3,290.3 0.0 3,290.3 3,290.3 792.6 4,082.9
Risk Management Fund 277.6 296.2 0.0 296.2 296.2 0.0 296.2
Highway Photo Radar 0.0 0.0 0.0 0.0 0.0 90,000.0 90,000.0
Agency Total 57,698.3 65,006.0 0.0 65,006.0 65,006.0 146,872.4 211,878.4
Arizona Department of Racing
Racing Administration Fund 71.8 67.0 0.0 67.0 67.0 0.0 67.0
County Fair Racing Fund 298.6 450.0 0.0 450.0 450.0 0.0 450.0
Agency Total 370.4 517.0 0.0 517.0 517.0 0.0 517.0
Radiation Regulatory Agency
State Radiologic Technologist Certification Fund 275.2 291.8 0.0 291.8 281.9 0.0 281.9
Agency Total 275.2 291.8 0.0 291.8 281.9 0.0 281.9
Registrar of Contractors
Registrar of Contractors Fund 10,614.6 15,597.7 0.0 15,597.7 11,908.5 0.0 11,908.5
Agency Total 10,614.6 15,597.7 0.0 15,597.7 11,908.5 0.0 11,908.5
Residential Utility Consumer Office
Residential Utility Consumer Office Revolving
Fund
1,112.5 1,313.1 0.0 1,313.1 1,273.9 0.0 1,273.9
Agency Total 1,112.5 1,313.1 0.0 1,313.1 1,273.9 0.0 1,273.9
Board of Respiratory Care Examiners
Board of Respiratory Care Examiners Fund 233.1 264.7 0.0 264.7 251.8 0.0 251.8
Agency Total 233.1 264.7 0.0 264.7 251.8 0.0 251.8
Arizona State Retirement System
Retirement System Appropriated Fund 18,109.1 20,067.8 0.0 20,067.8 20,112.7 0.0 20,112.7
LTD Trust Fund 2,574.6 2,800.0 0.0 2,800.0 2,800.0 0.0 2,800.0
Agency Total 20,683.7 22,867.8 0.0 22,867.8 22,912.7 0.0 22,912.7
Department of Revenue
Tobacco Tax and Health Care Fund 502.9 630.5 0.0 630.5 646.8 0.0 646.8
DOR Unclaimed Property Fund 1,659.3 3,439.2 0.0 3,439.2 3,378.6 0.0 3,378.6
DOR Liability Setoff Fund 290.3 430.9 0.0 430.9 413.8 0.0 413.8
Risk Management Fund 113.5 0.0 0.0 0.0 0.0 0.0 0.0
Agency Total 2,566.0 4,500.6 0.0 4,500.6 4,439.2 0.0 4,439.2
FY 2009 Executive Budget 23
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Department of State ‐ Secretary of State
Election Systems Improvement Fund 12,277.7 15,002.0 0.0 15,002.0 4,000.0 0.0 4,000.0
Professional Employer Organization Fund 0.0 98.2 0.0 98.2 94.8 0.0 94.8
Agency Total 12,277.7 15,100.2 0.0 15,100.2 4,094.8 0.0 4,094.8
State Boards Office
Special Services Fund 200.1 280.0 0.0 280.0 260.0 0.0 260.0
Agency Total 200.1 280.0 0.0 280.0 260.0 0.0 260.0
Structural Pest Control Commission
Structural Pest Control Fund 2,235.6 2,888.4 0.0 2,888.4 2,668.9 0.0 2,668.9
Agency Total 2,235.6 2,888.4 0.0 2,888.4 2,668.9 0.0 2,668.9
State Board of Technical Registration
Technical Registration Board Fund 1,483.2 1,766.6 0.0 1,766.6 1,700.2 0.0 1,700.2
Agency Total 1,483.2 1,766.6 0.0 1,766.6 1,700.2 0.0 1,700.2
Department of Transportation
State Aviation Fund 2,181.5 2,641.9 0.0 2,641.9 2,641.9 90.0 2,731.9
State Highway Fund 387,399.2 418,166.8 0.0 418,166.8 418,166.8 9,877.9 428,044.7
Transportation Department Equipment Fund 37,779.4 39,147.8 0.0 39,147.8 39,147.8 0.0 39,147.8
Safety Enforcement and Transportation
Infrastructure Fund
558.7 2,172.4 0.0 2,172.4 2,172.4 0.0 2,172.4
Air Quality Fund 68.6 71.7 0.0 71.7 71.7 0.0 71.7
Vehicle Inspection and Title Enforcement Fund 1,408.8 1,809.7 0.0 1,809.7 1,809.7 0.0 1,809.7
Motor Vehicle Liability Insurance Enforcement
Fund
3,185.0 2,456.9 0.0 2,456.9 2,456.9 0.0 2,456.9
Driving Under Influence Abatement Fund 136.8 143.3 0.0 143.3 143.3 0.0 143.3
Highway User Revenue Fund 608.8 617.0 0.0 617.0 617.0 0.0 617.0
Agency Total 433,326.8 467,227.5 0.0 467,227.5 467,227.5 9,967.9 477,195.4
State Treasurer
State Treasurerʹs Management Fund 0.0 33.8 0.0 33.8 33.8 (32.5) 1.3
Agency Total 0.0 33.8 0.0 33.8 33.8 (32.5) 1.3
University of Arizona ‐ Health Sciences Center
U of A College of Medical ‐ Collections ‐
Appropriated Fund
14,502.3 14,158.7 0.0 14,158.7 14,158.7 0.0 14,158.7
Agency Total 14,502.3 14,158.7 0.0 14,158.7 14,158.7 0.0 14,158.7
University of Arizona ‐ Main Campus
U of A Main Campus ‐ Collections ‐
Appropriated Fund
104,610.8 128,539.7 0.0 128,539.7 128,539.7 0.0 128,539.7
Agency Total 104,610.8 128,539.7 0.0 128,539.7 128,539.7 0.0 128,539.7
Department of Veteransʹ Services
Veteransʹ Conservatorship Fund 678.0 747.4 0.0 747.4 722.7 0.0 722.7
State Home for Veterans Trust Fund 13,231.9 13,740.4 0.0 13,740.4 13,291.5 0.0 13,291.5
Agency Total 13,909.9 14,487.8 0.0 14,487.8 14,014.2 0.0 14,014.2
State Veterinary Medical Examining Board
Veterinary Medical Examiners Board Fund 401.4 480.2 0.0 480.2 451.0 0.0 451.0
Agency Total 401.4 480.2 0.0 480.2 451.0 0.0 451.0
24 Budget Summary
Expendi‐tures
Appro‐priation
Executive
Budget
Changes and
Adjustments
Executive
Budget
Changes and
Adjustments
FY 2007 FY 2008 FY 2008 FY 2008 FY 2009 FY 2009
FY 2008
Base / FY
2009
Approp
Department of Water Resources
Assured and Adequate Water Supply
Administration Fund
156.6 1,124.6 0.0 1,124.6 1,100.4 0.0 1,100.4
Agency Total 156.6 1,124.6 0.0 1,124.6 1,100.4 0.0 1,100.4
Department of Weights and Measures
Air Quality Fund 1,404.6 1,544.9 0.0 1,544.9 1,517.6 0.0 1,517.6
Motor Vehicle Liability Insurance Enforcement
Fund
109.4 135.0 0.0 135.0 120.7 0.0 120.7
Agency Total 1,514.0 1,679.9 0.0 1,679.9 1,638.3 0.0 1,638.3
Other Appropriated Funds Operating Total 2,292,082.4 2,603,016.7 328.2 2,603,344.9 2,579,890.9 186,690.8 2,766,581.7
FY 2009 Executive Budget 25
(1) (2) (3) (4) (5) (6) (7)
Agency
FY 2008
Appropriations
Caseload
Requirements
and Inflation
Growth
Statutory,
Federal and
Court
Mandates
Extension of
Existing
Programs
Technical and
Other
Adjustments
Executive
New
Initiatives
FY 2009
Executive
Recommendation
Administration 3 3,312 - - - ( 5,907) - 2 7,405
AHCCCS 1 ,269,136 2 50,924 - 9,274 ( 13,724) 1,717 1 ,517,326
Community Colleges 1 67,745 6 ,167 - - ( 1,000) - 1 72,912
Corrections 9 10,277 4 5,724 - - 3,476 (60,814) 8 98,664
Economic Security 7 94,336 5 2,143 3,500 10,124 18,609 - 8 78,712
K-12 Education 4 ,363,465 1 66,501 - - ( 3,110) - 4 ,526,856
Health Services 5 83,432 3 5,278 - 1,240 ( 5,691) - 6 14,258
Juvenile Corrections 8 1,450 - - - ( 1,500) - 7 9,950
Public Safety 1 77,708 - 120 - ( 142,596) - 3 5,231
School Facilities Board 5 32,695 9 0,000 - - ( 466,549) 11,350 1 67,496
Universities 1 ,121,095 2 0,723 - 4,500 ( 10,500) 8,500 1 ,144,319
All Other Agencies 6 09,294 2 ,176 - 3,658 32,582 11,190 6 58,901
Total Agency Operating Budget 1 0,643,946 6 69,636 3,620 2 8,796 ( 595,911) (28,057) 1 0,722,030
Percent of growth over FY 2008 Appropriations 6.3% 0.03% 0.3% -5.6% -0.3% 0.7%
net = -5.6%
FY 2009 General Fund Executive Recommendation: Expenditure Growth Breakdown
26 Budget Summary
Budget Message
FY 2009 Executive Budget 27
THE ECONOMY
State’s Economy Expected to Grow – Slowly – for
Most of 2008
Arizona will likely experience slow economic growth for the first three quarters, with a reasonably
strong rebound toward the end of 2008
HE NATION IN general and Arizona
in particular will see, in 2008, a
continuation of the slow rates of growth
that were widely felt in 2007. The major
headwinds that will impede growth
include:
• a declining residential housing sec‐tor,
• tightness in credit markets, and
• consumers who are concerned about
the economy.
It should be noted that the global
economy has remained fairly strong.
Most economists believe that, despite
the headwinds noted above, overall
global economic health will sustain a
moderate level of economic growth in
the U.S. As a result, for a time America
may find itself in the unusual position of
being the caboose in the global growth
train instead of the engine.
NATIONAL OUTLOOK
Economic growth through the first
two quarters of 2008, as measured by
GDP growth, will be quite weak, aver‐aging
about 1.3% at annual rates. Still,
growth rates are expected to improve
slightly, quarter by quarter, to 2.9% in
the fourth quarter of 2008 and to exceed
3% in 2009. Historically, growth above
3% has been associated with a vibrant
economy.
Job Growth. Employment gains will
slow in 2008, impeded by the housing
sector and pressures in the credit mar‐kets.
Those factors will combine with the
same pressures that have existed for
several years: high health benefit costs,
global market alternative opportunities,
and labor‐saving productivity enhance‐ments.
Consumer Spending. The adverse
economic conditions will pressure the
heretofore resilient consumer. Specifi‐cally,
high energy prices, Wall Street
volatility, and the deterioration in hous‐ing
equity have rattled consumer confi‐dence.
Auto sales slumped in November
2007, and some automakers and indus‐try
analysts predict that 2008 sales could
drop to their lowest level in a decade.
The Federal Reserve Board will con‐tinue
to reduce interest rates, and com‐panies
such as Goldman Sachs expect to
see a federal funds rate of 3% by mid‐year.
Confidence should steadily resume
in the second half of 2008, as credit
conditions improve and the economy
moves beyond the worst of the residen‐tial
housing contraction. To date, capital
gains and dividend returns from Wall
Street have helped buffer the lost equity
accumulations in housing, but any fur‐ther
deterioration of equity prices will
further erode consumer confidence.
Interest Rates. As central bankers
confront a sluggish economy, 2008 will
see a continuation of the Fed’s easing of
interest rates. Eventually, credit will find
its way to borrowers and help counter
the headwinds currently faced by busi‐nesses
and consumers.
Homeowners with non‐conventional
mortgage positions will find some relief
from Washington’s efforts to delay
adverse effects of mortgage loan resets,
and an overall expansion of credit will
allow some to shift back into conven‐tional
means of borrowing. As long as
inflation rates remain moderate, the Fed
should have sufficient latitude in ex‐tending
credit.
Business Spending. For the past
five years, growth in corporate profits
has been consistent and robust. That is
likely to change.
Most economists look for deteriora‐tion
in corporate profits through the first
three quarters of 2008, with a resump‐tion
of modest growth into 2009. This
deterioration will limit the ability of
businesses to invest in people, plant and
equipment. The slowing growth in
business profitability is a major con‐tributor
to the overall growth‐slowing
expected to prevail over the next several
quarters.
The Dollar. The dollar declined at a
steady rate throughout much of 2007.
The nation’s trade imbalance and do‐mestic
deficit will continue to pressure
the dollar, but the consensus forecasts
among economists suggest that most of
the expected dollar erosion has already
taken place, despite ongoing concerns
about trade (particularly with respect to
imported oil) and domestic fiscal imbal‐ances.
One positive consequence of a
weaker dollar is its stimulating effect on
exports, which should boost the nation’s
manufacturing and wholesale distribu‐tion
sectors. Job stability in those indus‐tries
may be a key factor in the nation’s
avoidance of a recession.
Notwithstanding well‐documented
pressures and a weakening economy,
the U.S. remains an attractive low‐risk
investment for both financial and physi‐cal
capital, and this attractiveness will
buffer against dollar depreciation pres‐sures.
The global economy should slow
somewhat from its rapid growth pace,
and this should lead to further stabiliza‐tion
of the dollar. Few economists see
much dollar appreciation from this
position, but continued erosion at recent
rates is unlikely.
ARIZONA OUTLOOK
Arizona business cycles typically
have more amplitude than national
cycles, and for this cycle the upside
catalyst was clearly real estate. Ari‐zona’s
job gains, income growth and tax
revenues outpaced the nation during the
period following the most recent reces‐sion
The flip side of this cycle is now
clearly in place, and the only remaining
question is how long the down cycle
T
28 The Budget Message
will persist. The consensus view is that
Arizona’s economic growth will be very
slow through the next three quarters,
with some improvement beginning
toward the end of 2008.
Employment growth in the state
slowed sharply in the second half of
2007, and some economists see very
sluggish growth for most of 2008. Re‐sumption
of more robust growth pat‐terns
can be expected in late 2008 and
into 2009. Construction‐ and real estate‐related
areas of employment will see the
most pressure.
Personal Income. Aggregate per‐sonal
income growth in the state, as
reported by the Bureau of Economic
Analysis, is also slowing, with average
growth of 6.7% during the first three
quarters. This is historically a slow
growth rate for a state that is accus‐tomed
to 8% growth and higher through
much of its recent history, but it is still
better than the national average. The
challenge for forecasters is to determine
the degree to which residential real
estate will erode growth in 2008, and
whether the sluggish real estate sector
will have adverse spillover effects
throughout the economy.
Risks. Risks to continued economic
growth for the Arizona economy come
from at least two sources.
First, as in the past, any prolonged
U.S. downturn will adversely affect the
state. Arizona’s export, construction and
hospitality industries would suffer at a
time when Arizona consumer confi‐dence
is already quite fragile.
Second, Arizona’s exposure to the
real estate cycle is greater than that of
most states. Arizona enjoyed consider‐able
growth and prosperity in the up
trend of the cycle and is now in the
depths of the down cycle in the residen‐tial
sector. Any spillover to the commer‐cial
real estate sector will damage
employment and income growth
throughout the real estate and financial
services industries.
BUDGET IMPACT
The recent explosive growth in Gen‐eral
Fund revenues has contributed to
the current scenario in which, as was
mentioned earlier, slow growth “feels”
recessionary.
However, through FY 2009 several
components of the State’s revenue base
will continue to experience growth,
albeit modest by Arizona standards.
Growth is expected in each of the “Big
Three” tax categories: (a) Transaction
Privilege and Use Tax, (b) Individual
Income Tax and (c) Corporate Income
Tax.
As contributors to the Transaction
Privilege and Use Tax, the following
categories are expected to experience
growth over FY 2008:
• retail
• restaurant and bar
• hotel and motel
• utilities
• use tax.
Continued population growth in‐creases
the need for new schools and K‐
12 education funding. Meanwhile, a
slower‐than‐normal Arizona economy
in 2007 and 2008 has placed higher
demands for State services provided by
the Arizona Health Care Cost Contain‐ment
System (AHCCCS), the Depart‐ment
of Health Services and the
Department of Economic Security. In FY
2009 the growth in the need and cost for
these services is expected to outpace the
growth in anticipated revenue. The
Executive Recommendation, however,
encompasses several reasonable mecha‐nisms
to bridge the shortfall without
significant disruption to the operation of
State Government. ●
FY 2009 Executive Budget 29
E F F I C I ENCY REVI EW
State Agency Innovations Produce Major Savings
The Efficiency Review process challenges agency management to find sensible ways to reduce costs
while improving the way the State serves the public
HE GOVERNOR’S EFFICIENCY REVIEW
team coordinates and implements
efficiencies in partnership with agency
leadership. The Efficiency Review (ER)
process serves to further solidify the
public’s confidence in a leaner, smarter
State government.
FINANCIAL SUCCESS
According to data compiled by the
Governor’s Office of Strategic Planning
and Budgeting (OSPB), by the end of FY
2009 the agency‐specific and statewide
projects developed through ER will have
saved the taxpayers an estimated $1.2
billion since its inception in 2003.
ACCOUNTABILITY
The Efficiency Review Steering
Committee, composed of the Governor’s
Chief of Staff and top advisors to the
Governor, was established to oversee
and guide projects and hold agencies
accountable for implementation of ER
projects.
Significant progress has been made
in advancing several statewide project
initiatives. Many observers credit these
successes to the commitment and coop‐erative
working relationships between
the Executive agency managers and the
ER Steering Committee. The Steering
Committee’s monthly meetings provide
a forum for consultation and guidance
to ensure that agencies follow through
on their project commitments.
In addition, OSPB (the Governor’s
budget office) developed the Consoli‐dated
Efficiency Review Tracking Sys‐tem
(CERTS), which requires State
agencies to document their efficiency
savings and report those savings to
OSPB.
IMPLEMENTATION
The Efficiency Review team coordi‐nates
with agencies to find and develop
best practices and showcases them in
monthly cabinet meetings. Examples
include:
• auditing software licensing,
• reviewing consultant contracting,
• consolidating job advertising,
• implementing virtual office admini‐stration,
• imaging documents for electronic
efficiencies, and
• printing, copying, mailing consoli‐dation.
Presentations are followed up with
instructions for implementation as well
as agency contacts to provide assistance.
Five implementation teams were es‐tablished
and charged with overseeing
workgroups chaired by the ER Steering
Committee. Implementation team mem‐bers
include policy advisors, Executive
agency directors and subject matter
experts.
Examples of workgroups within the
teams include:
• Energy Efficiency
• Employee Recruitment/Retention
• E‐Licensing
• Permitting Processing
• “Plain Talk” Public Communica‐tions.
Agencies are expected to report on
their efforts to accomplish larger state‐wide
initiatives in addition to reporting
on their individual efforts.
THE FUTURE OF ER
In 2008 and beyond, ER will con‐tinue
to focus on statewide initiatives
that yield larger savings. Current and
future initiatives include:
• On‐Line Licensing. Helping all licens‐ing
agencies post licenses on the
Internet so that the public can access
and apply for licenses more effi‐ciently.
• Consolidation. Streamlining, consoli‐dating
and aligning divisions, pro‐grams,
boards, councils and
commissions.
• Web‐Based Video Conferencing. Using
web‐based technology to connect
public employees to meetings and
events at a fraction of the cost of tra‐ditional
travel methods.
• Virtual Office. Allowing State em‐ployees
to work from a remote loca‐tion
in an effort to increase
employee morale, retention and
productivity while decreasing costs
related to office space and turnover.
• Imaging. Creating paperless proc‐esses
to speed up work flow and
save on file storage space.
• Wellness. Ensuring that all State em‐ployees
are offered avenues to par‐ticipate
in effective wellness
programs that will create a healthier
workforce and reduce health insur‐ance
costs.
• Volunteers and Interns. Promoting the
use of volunteers and interns in State
services to help lower costs.
Upon implementation, these initia‐tives
will help to ensure a leaner and
smarter State government.
STATEWIDE INITIATIVES
Statewide initiatives implemented in
2003 continue to produce savings and
are projected to contribute over $100
million in FY 2007 alone. These initia‐tives
include:
• Energy Conservation,
• Fleet Consolidation,
• Statewide E‐Procurement, and
• Employee Benefits.
All State agencies were required to
participate in the total savings achieved
through these initiatives.
AGENCY‐SPECIFIC SAVINGS
Agencies are continually challenged
to create new ideas for efficiency sav��ings.
Agency‐specific efficiency savings
achieved in FY 2007 from fully and
partially implemented projects totaled
approximately $88.5 million. The two
T
30 The Budget Message
following tables – “FY 2009 Efficiency
Review Initiatives” and “Efficiency
Review Initiatives ‐ Five‐Year Sum‐mary”
– identify estimated savings by
agency for FY 2009; actual savings from
FY 2004 through FY 2007; and estimates
for projects scheduled for FY 2008 and
FY 2009.
If an initiative is a “cost avoidance”
– i.e., a permanent or long‐term savings
– it is accounted for in each year of the
five‐year plan in which the avoidance
applies. If an initiative is a cost savings –
i.e., a temporary or short‐term savings –
it is accounted for in the year(s) it ap‐plies.
By the end of the current fiscal
year, cumulative project savings since
FY 2004 are expected to total almost
$791.6 million.
Technology. Agencies have utilized
technology to convert paper processes to
forms of electronic communication.
Several agencies are now completing
license renewals on‐line, and many are
converting mailings for items such as
reports, newsletters and various other
documents to Internet formats for public
viewing.
Hiring Gateway, the new paperless
recruiting and hiring system imple‐mented
for all agencies, was able to
achieve savings of close to $2.1 million
in FY 2007 and is estimated to save the
State approximately $2.3 million more
by the end of FY 2008. In addition, the
Department of Revenue has been suc‐cessful
in encouraging tax payers to file
their tax returns on line through the
recently developed E‐File web‐based
application.
Human Resources. Several agencies
have increased the number of volunteers
and volunteer hours to alleviate some of
the pressures caused by a lack of fund‐ing
for additional staff. One agency has
implemented the aforementioned Vir‐tual
Office initiative that, by allowing
employees to work from their homes,
reduces costs associated with leased
office space and employee turnover.
Reduction of Red Tape. Process
streamlining has also achieved savings.
While some agencies have consolidated
the number of required forms by reduc‐ing
duplicative questions, others have
also been conducting process reviews
and eliminating unnecessary steps.
Consolidation of Boards and
Commissions. Streamlining State gov‐ernment
is an Executive priority. At the
Governor’s request, the Efficiency Re‐view
team identified over 50 boards,
councils, commissions and agencies that
are being consolidated or eliminated.
This will result in a smarter, leaner State
government.
This initiative will consolidate simi‐lar
functions and shrink administrative
costs while improving public services.
Any cost savings are likely to be realized
in FY 2010.
CONCLUSION
In addition to the ER‐related im‐provements
discussed above, State
agencies have been able to implement
other innovative approaches to enhanc‐ing
efficiency, including:
• reducing the intake process for
short‐term inmates,
• taking advantage of creative pur‐chasing
opportunities for prescrip‐tion
drugs,
• using a solar farm to supplement
power usage,
• limiting the number of hair cuts for
juveniles in custody, and
• creating policies that guide supervi‐sors
and employees on how to re‐duce
overtime.
The potential benefits associated
with Efficiency Review are endless, and
the people of Arizona can look forward
to even more dynamic innovations in
the years ahead. ●
FY 2009 Executive Budget 31
FY 2009 EFFICIENCY REVIEW INITIATIVES Agency Request
Prior to Efficiency
Initiatives
Agency Request
Post Efficiency
Initiatives
Efficiency
Initiative
Savings
Statewide Initiatives
Employee Benefits 59,000.0
Energy Conservation 382.4
Fleet Consolidation 929.9
Leasing/Space Utilization 400.0
Statewide E‐Procurement 24,717.0
Total: Statewide Initiatives 85,429.3
Agency Initiatives
Department of Administration 1,095,797.7 1,093,143.8 2,653.9
Department of Agriculture 30,814.3 30,604.4 209.9
Arizona Health Care Cost Containment System 8,821,524.0 8,615,009.3 206,514.7
Department of Commerce 92,830.8 92,803.5 27.3
Department of Corrections 1,218,100.3 1,218,094.7 5.6
Department of Economic Security 3,616,429.7 3,538,132.0 78,297.7
Department of Emergency and Military Affairs 82,831.2 82,725.2 106.0
Department of Environmental Quality 337,784.1 337,553.2 230.9
State Department of Financial Institutions 8,691.6 8,666.3 25.3
Game & Fish Department 95,290.2 92,601.6 2,688.6
Department of Gaming 16,630.6 16,255.8 374.8
Department of Health Services 2,164,833.0 2,156,043.6 8,789.4
Department of Homeland Security 15,419.7 15,337.6 82.1
Department of Housing 126,765.4 126,528.5 236.9
Department of Insurance 20,262.7 19,881.7 381.0
Department of Juvenile Corrections 93,108.8 91,139.6 1,969.2
State Land Department 47,078.9 47,037.6 41.3
Department of Liquor Licenses and Control 6,029.2 6,013.3 15.9
State Lottery Commission 763,013.1 760,186.7 2,826.4
State Parks Board 176,084.9 171,687.4 4,397.5
Department of Public Safety 362,679.5 359,360.7 3,318.8
Department of Racing 6,290.0 6,131.0 159.0
Department of Real Estate 4,916.6 4,765.6 151.0
Registrar of Contractors 18,522.5 18,515.5 7.0
Residential Utility Consumer Office 1,312.8 1,273.9 38.9
Department of Revenue 178.468.6 177,715.6 753.0
School Facilities Board 1,628,858.7 1,619,700.7 9,158.0
Office of Tourism 32,996.9 32,545.5 451.4
Department of Transportation 3,506,401.1 3,504,805.1 1,596.0
Department of Veterans’ Services 23,611.2 23,582.8 28.4
Department of Water Resources 65,999.5 65,879.0 120.5
Total: Agency Initiatives 325,656.4
TOTAL FOR FY 2009: ALL INITIATIVES FOR ALL AGENCIES AND STATEWIDE 411,085.7
EFFICIENCY REVIEW INITIATIVES ‐ SIX‐YEAR SUMMARY
Statewide Initiatives
2004
Actual
2005
Actual
2006
Actual
2007
Actual
2008
OSPB Est.
2009
OSPB Est.
Six‐Year
Total
Employee Benefits 0.0 0.0 25,000.0 48,000.0 59,000.0 59,000.0 191,000.0
Energy Conservation 0.0 442.8 205.0 205.0 367.4 382.4 1,602.6
Leasing/Space Utilization 0.0 1,543.0 1,200.0 0.0 400.0 400.0 3,543.0
Fleet Consolidation 0.0 922.0 1,074.9 922.0 929.9 929.9 4,778.7
Statewide E‐Procurement 0.0 15,700.0 22,295.0 45,000.0 37,712.0 24,717.0 145,424.0
Total: Statewide Initiatives 0.0 18,607.8 49,774.9 94,127.0 98,409.3 85,429.3 346,348.3
Total: Agency Initiatives 30,041.2 87,304.4 166,296.4 88,507.1 158,663.9 325,656.4 856,469.4
TOTAL: ALL INITIATIVES 30,041.2 105,912.2 216,071.3 182,634.1 257,073.2 411,085.71 1,202,817.7
32 The Budget Message
EDUCATION
Preserving Investments in Education Is a
Safeguard for Arizona’s Future
By keeping K‐12 funding virtually intact and increasing the funding for the universities, the Executive
Budget Recommendation continues to enhance student achievement
HE EXECUTIVE’S COMMITMENT to
education remains strong, adhering
to budget priorities that protect educa‐tion
spending, focus on student
achievement, and prepare Arizona
students to compete in the global mar‐ketplace
after graduation.
K‐12
In promoting educational excellence,
the FY 2009 Executive Budget Recom‐mendation
provides for statutory per‐pupil
funding, including inflationary
increases, for all K‐12 formula programs.
Despite the State’s current fiscal strains,
funding for K‐12 education programs
remains virtually intact in order to pro‐tect
the significant investments made
over the past several years. Those in‐vestments,
such as Voluntary Full‐Day
Kindergarten and increased teacher pay,
are critical to continued student
achievement.
The Governor’s FY 2009 recommen‐dation
provides $166 million in new
General Fund monies for K‐12 schools in
FY 2009. This increase consists of:
• $153 million in Basic State Aid,
which includes the 2% inflation fac‐tor
as required by Proposition 301;
and
• $13.5 million in Additional State
Aid.
Basic State Aid. The largest for‐mula‐
funding program for K‐12 educa‐tion,
Basic State Aid provides financial
assistance to school districts and charter
schools for their maintenance and opera‐tions
and “soft” capital needs.1 The
recommendation is based on the follow‐ing
growth assumptions in FY 2009:
1 “Soft” capital funding can be used only for
short-term capital items, such as technology,
textbooks, library resources, instructional aids,
pupil transportation vehicles, furniture and
equipment.
• 3% enrollment growth,
• 10% increase for net assessed val‐uations,
and
• 2% inflationary growth for per‐pupil
maintenance and operations fund‐ing.
For FY 2009, the Executive’s recom‐mended
$153 million fully funds student
growth in traditional and charter
schools, where net enrollment is ex‐pected
to rise by 31,852 students. For
school districts, the primary net assessed
valuation growth is estimated at 10%
and is expected to yield approximately
$194 million through local property tax
levies, which offset the State’s cost. The
increased valuations are based on ap‐preciation
due to new and existing
properties.
Additional State Aid. To provide
property tax relief to residential prop‐erty
owners, the Executive Recommen‐dation
includes $13.5 million for the
Additional State Aid program.
New Construction. For FY 2009 the
Executive recommends financing $471
million for the New Construction pro‐gram,
2 which is expected to fund ap‐proximately
40 new schools and/or
build‐outs of existing schools, including
new and existing facilities planned for
Voluntary Full‐Day Kindergarten, addi‐tional
funds for school safety issues, and
factors in increased costs attributable to
construction inflation.
To fund payments on existing obli‐gations,
the Executive recommends a
total of $79 million General Fund for the
FY 2009 lease payments.
Existing Facilities. The School Fa‐cilities
Board (SFB) is charged with the
administration of three capital pro‐grams:
Deficiencies Corrections, New
School Construction, and Building Re‐newal.
Under the “Students FIRST”
mandate, the Board is required to im‐prove
school buildings to established
minimum standards, fund construction
of new facilities as needed, and ensure
2 Includes $460 million for New School Facilities,
$11 million for Voluntary Full-Day Kindergar-ten
capital needs, and $350,000 for school
safety items.
T New School Construction
Cost in Thousands
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
FY 2009 Executive Budget 33
proper maintenance of the physical
facilities of the State school system.
COMMUNITY COLLEGES
Arizona community colleges offer
higher education opportunities for all
students, regardless of previous aca‐demic
experience.
Between FY 2006 and FY 2007, ag‐gregate
student enrollment at Arizona
community colleges decreased by 0.2%,
although individual colleges experi‐enced
increased enrollment. The 0.2%
reduction represents a net loss of 198
full‐time equivalent students (FTSE)
from FY 2006 to FY 2007.
Six counties – Cochise, Coconino,
Gila, Mohave, Pinal and Yavapai –
experienced enrollment growth, with
the largest FTSE growth occurring in
Yavapai County. Meanwhile, five dis‐tricts
– Graham, Maricopa, Navajo, Pima
and Yuma/La Paz – experienced declin‐ing
enrollment.
Funding levels are not decreased for
districts experiencing enrollment de‐cline;
instead, community college dis‐tricts
are held harmless as their funding
level remains the same as the previous
fiscal year.
The Executive recommends fully
funding community colleges, to include:
• $121 million for Operating State Aid,
• $20 million for Capital Outlay Aid,
and,
• $29 million for Equalization Aid.
UNIVERSITIES
Higher education is the fuel for fu‐ture
economic growth and must not be
impaired by decisions that fail to con‐template
Arizona’s long‐range need for
economic development.
Despite the State’s current fiscal
situation, the Executive Recommenda‐tion
provides increased funding for the
State’s universities. The Executive Rec‐ommendation
reflects a net funding
increase to the universities of $25.4
million from the General Fund. The
recommendation includes an increase of
almost $21 million for the traditionally
appropriated 22:1 funding formula,
which provides funding increases for
estimated enrollment growth.
Additionally, the Executive Recom‐mendation
fully funds the State match
for the Arizona Financial Aid Trust
(AFAT), which is used to provide im‐mediate
aid to students with verifiable
financial needs; assist students who, by
virtue of special circumstances, present
a unique need for financial aid; and
create an endowment for future finan‐cial
aid.
STEM Teachers. The Executive Rec‐ommendation
provides a total $7 million
in FY 2009 for all three universities to
recruit, teach and retain teachers in
STEM (science, technology, engineering
and mathematics) areas, with a special
focus on middle and secondary schools.
The goals of this initiative are to:
• aggressively recruit students to be‐come
middle schools and secondary
teachers in the STEM areas, with
special emphasis on attracting more
students from typically underrepre‐sented
populations;
• offer professional development in
the STEM content areas for existing
teachers;
• take a P‐20 approach that aims to
expand the pipeline of students and
effective teachers beginning in the
earliest grades and continuing
through university work;
• increase teacher production annu‐ally;
and
• offer innovative courses through
validated and effective instruction,
such as creating and offering
coursework that combines content
with best practice pedagogy.
The recommended funding is an in‐vestment
in the state’s work force and
enhances Arizona’s ability to compete
globally. ●
34 The Budget Message
HEALTH AND WELFARE
New Initiatives Address Increased Demand
State must meet dual challenges of slow economic growth, greater need for essential services
O VARYING DEGREES, a slowing in
economic growth invariably is ac‐companied
by increased needs for ser‐vices
for society’s most vulnerable
population groups.
While acknowledging the necessity
of budget discipline, the Executive
Budget Recommendation provides
additional funding in critical areas that
benefit children, seniors and the medi‐cally
and behaviorally disadvantaged.
Foremost, the Recommendation re‐flects
a commitment to ensuring that
Arizonans have access to adequate
health care. To help address this con‐cern,
the Executive Recommendation
proposes a modest package of new
initiatives to make certain that Arizo‐nans
receive essential medical care and,
in a related area, vital social services.
KIDSSHARE
In a year when economic growth has
slowed, it will become more difficult for
Arizona businesses to provide health
insurance for their employees and for
Arizona parents to pay for health care
for their children. Of particular concern
are continuing increases in private sec‐tor
health insurance costs and declining
percentages of employers offering
health insurance for families.
All Arizona children must have ac‐cess
to health care. To that end, the
Executive proposes that the KidsShare
program allow children who are not
eligible for Arizona Health Care Cost
Containment System (AHCCCS) or
KidsCare health insurance to buy health
insurance through the State’s existing
contracts with private insurance compa‐nies.
This will allow children whose
families cannot obtain health insurance
from other sources to have insurance,
assuming that their family income is
under 350% federal poverty level (FPL)
and they meet any of the following
conditions:
• The child does not have coverage
available through a parent or legal
guardian’s current employer or is
not eligible for available coverage.
• Private insurance for the child
would cost more than 10% of the
family income or more than 150% of
the KidsShare premiums.
• The child is excluded from private
insurance because of a pre‐existing
condition.
OTHER SERVICES FOR CHILDREN
In its recommended cuts, the Execu‐tive
Budget holds children’s programs
harmless and continues to expand pro‐grams
that most impact a child’s wel‐fare.
To help address these issues, the
Executive proposes a package of initia‐tives
that will help Arizonans receive
the quality medical care and social ser‐vices.
Following is a partial list of those
initiatives.
Permanency for Children. Adoption
is the preferred outcome for children
whose natural parents are unable to care
for them. Adoption provides a perma‐nent
placement for a child and is less
costly to the State than temporary out‐of‐
home placements. The program is
anticipated to provide maintenance
payments to the adoptive parents of an
average of 10,598 children each month.
In instances where relatives want to
provide a stable environment for a child,
the Department seeks to place the child
in a permanent guardianship. This may
be a good option for families that want
to provide stability for a child while
maintaining the childʹs ties to their birth
parents. The Executive Recommenda‐tion
includes a $10.7 million General
Fund increase to cover new caseload
growth in these programs in FY 2009.
Children’s Services. The Depart‐ment
seeks to strengthen families and
educate parents; however, to ensure a
child’s safety, it is sometimes necessary
to remove the child from the home. The
Executive Recommendation provides an
additional $15 million in FY 2008 and
$15.2 million in FY 2009 to continue to
provide adequate funding to keep chil‐dren
safe.
Strengthening Families. Child wel‐fare
reform has made significant im‐provements
in the last few years,
including the following:
• In FY 2007, the number of out‐of‐home
placements was reduced by
2%, marking the first reduction in
this type of placements since FY
2002.
• Since FY 2004, permanent guardian‐
T
Number of Children in Various Settings
FY 2004 - FY 2007
0
2,000
4,000
6,000
8,000
10,000
12,000
July 03
Jan 04
July 04
Jan 05
July 05
Jan 06
July 06
Jan 07
July 07
Adoption
Guardianship
In-Home Care
Licensed Foster Care
Shelters and Group Homes
FY 2009 Executive Budget 35
ships have increased by 116%.
• During the same period, finalized
adoptions increased by more than
52%.
• Since FY 2004 the number of avail‐able
foster homes has increased by
about 65%, and the processing time
for a completed application was
shortened by half.
Arizona Families First. Nearly 80%
of CPS families struggle with substance
abuse. Arizona Families First, a nation‐ally
recognized program, reduces the
burden on CPS workers by providing
treatment and support services to needy
families that might otherwise lose their
children to foster care.
This early intervention effort, which
is a product of the department of Eco‐nomic
Security (DES)/Department of
Health Services (DHS) Joint Substance
Abuse Treatment (JSAT) program, pro‐vides
necessary substance abuse treat‐ment
for parents’ recovery, helping
them care for their children. Arizona
Families First also serves families that
receive Temporary Assistance for Needy
Families (TANF) and for which a sub‐stance
abuse problem is the main barrier
to finding employment. The Executive
Recommendation seeks to increase this
funding by $2.5 million as the need
continues to grow.
Children’s Rehabilitative Services.
Continuing a tradition that dates to
1927, the Children’s Rehabilitative Ser‐vices
(CRS) program, administered by
the DHS Office for Children with Special
Health Care Needs, provides specialty
rehabilitative services to Arizona chil‐dren,
regardless of financial status, who
have a crippling disorder. Services
include medical treatment, rehabilita‐tion,
support services and case man‐agement.
To be eligible for services, the child
or youth must be an Arizona resident
under 21 years of age and have an iden‐tified
physical disability, chronic illness
or medical condition that is potentially
disabling. Services are provided through
four contracted regional clinics in Phoe‐nix,
Tucson, Flagstaff and Yuma. Any‐one
– doctors, nurses, teachers, patients
or friends – may refer a child to CRS.
The Title XIX CRS Program, which is
eligible for federal matching dollars,
provides services under a monthly
capitated rate basis. Title XIX CRS re‐quires
that capitation rates paid to CRS
contractors are actuarially sound and
developed in compliance with federal
regulations. The Title XIX CRS General
Fund increase recommended for FY
2009 will fund an expected 10% medical
inflation increase and a 1.8% client
growth rate. The program will provide
services to 16,300 children in FY 2009.
Child Care Quality. With over 2,700
child care facilities in Arizona, parents
and caretakers need assurance that their
children are safe and well cared for
while at those facilities. The Executive
Recommendation includes funding for
the third year of the Governor’s three‐year
plan to bring the facility‐to‐surveyor
ratio to 50:1 – the national
average and the standard set by the
National Academy of Pediatrics.
Child Fatality Review. For nearly 15
years, the Child Fatality Review pro‐gram
has reviewed all child fatalities in
the state to provide the community with
information on how to prevent child
deaths. Because funding for this pro‐gram
has remained flat, teams of volun‐teers
no longer receive funds necessary
for travel and supplies. The Executive
Recommendation includes funding to
ensure that every child fatality is re‐viewed.
HEALTH CARE
Demand for health care for low‐income
individuals continues to grow
nationwide, particularly in rapidly
growing states. Arizona continues to be
a national leader in the efficient provi‐sion
of health services to the medically
needy and low‐income populations.
Providing consistent, timely and safe
health care access to Arizonans is a high
priority in the Executive Budget Rec‐ommendation.
AHCCCS. Most state governments
spend more on Medicaid health care
services than on any budget area except
education. Arizona is no exception.
Over one million Arizonans – 17% of
the state’s population – receive benefits
through the Arizona Health Care Cost
Containment System (AHCCCS). As the
number of people depending on the
State for health care increases, the State
must address its competing responsibili‐ties
of providing adequate services
while containing costs.
Following dramatic population in‐creases
in the summer and fall of 2007,
AHCCCS enrollment is expected to
climb by 7.5% during Fiscal Year 2008.
This growth is expected to slow to 1.6%
in FY 2009 as the economy improves. In
addition to the projected enrollment
increase, a 6% capitation rate increase is
anticipated for FY 2009.3 For FY 2009
caseload issues, the Executive recom‐mends
an additional $251.3 million
above the FY 2008 appropriation.
KidsCare Parents. The KidsCare
Parents program provides health
insurance to approximately 13,000
3 The capitation rate is comprised of medical
inflation, program changes, and utilization.
AHCCCS Member Months
Actuals and Forecasts
600,000
650,000
700,000
750,000
800,000
850,000
900,000
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Actuals Executive Recommendation
36 The Budget Message
parents of children enrolled in the
KidsCare program. The program is
slated to end on June 30, 2008;
consequently, the Executive Budget
Recommendation provides $12.2 million
General Fund to fund the KidsCare
Parents program through FY 2009. The
State will qualify to receive enhanced
federal funds for these parents.
Behavioral Health. Arizona’s Be‐havioral
Health system provides psy‐chiatric
treatment, rehabilita