JLBC STAFF PRESENTATIONS TO THE APPROPRIATIONS COMMITTEES TABLE OF CONTENTS
Agencies highlighted in blue have links to presentations; Administration, Arizona Department of AHCCCS Attorney General - Department of Law Commerce, Department of Community Colleges, Arizona Corporation Commission Corrections, State Department of Deaf & the Blind, AZ State Schools for the Economic Security, Department of Education, Department of Environmental Quality, Department of Health Services, Department of Judiciary Juvenile Corrections, Department of Land Department, State Medical Student Loans, Board of Public Safety, Department of Retirement System, Arizona State Revenue, Department of School Facilities Board Tourism, Office of Transportation, Department of Universities Water Resources, Department of Weights and Measures, Department of Capital Budget
Corporation Commission
Arizona Corporation Commission 3 Divisions
Corporations Division $8.5M/ 156.5 FTEs ?Funded from General Fund and Public Access Fund (Corporate Filing Fees) ?Provides public access to corporate annual reports, articles of incorporation for businesses, and corporate status change documents Utilities Division $12.2M/ 72 FTEs ?Funded from the Utility Regulation Revolving Fund (Utility Assessments) ?Assists commissioners in establishing public utility rates, inspects gas pipelines for safety, and operates a railroad safety program. Securities Division $4.4 M/ 85.3 FTEs ?Funded from the Securities and Investment Management Funds, which receive revenues from registration fees from securities dealers/investment advisers. ?Regulates the securities marketplace, the registration of securities, securities dealers and brokers, investment advisers and their representatives.
Arizona Corporation Commission Processing Times
March 2005 to December 2005
-Of the $629,700 appropriated in FY 2006 for processing delays, $547,300 was designated as onetime to allow the legislature to evaluate the agency's success in reducing the backlog. - The JLBC recommendation continues this funding into FY 2007 - Current processing times are 10 days for expedited filings and 56 days for regular filings.
180 160 140 120 157
Days
100 80 60 40 20 0
p Se 5 r- 0 Ap 05 gAu 5 l- 0 Ju M t Oc 05 vNo M 5 -0 ar 05 nJu 5 -0 ay 5 -0 5 -0
56
56
Goal: Regular filings processed in 30 days or less
10
c De
Goal: Expedited filings processed in 5 days or less
Phoe nix Regular Processing Times
Phoe nix Expedited Processing Times
5 -0
Corporation Commission Total Funds FY 2002 - FY 2007
$25,617,400 $25,000,000 $22,738,500 $21,664,900 $20,000,000 $20,996,700 $21,693,900 $25,496,000
$15,000,000
$10,000,000
$5,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
Arizona Schools for the Deaf and the Blind
Telecommunications Services Excise Tax (TET)
? 1.1% tax on the gross revenues from land line telephones ? Currently revenues are appropriated to 4 agencies
? ? ? ? Commission for the Deaf and the Hard of Hearing Arizona State Schools for the Deaf and the Blind Department of Health Services - Poison Control Program University of Arizona Health Center - Teratogen Information Program
Telecommunications Services Excise Tax Revenues 1\ FY 2002 - FY 2007
10,000,000
$ 8 ,7 6 0 ,3 5 2 $ 8 ,6 6 8 ,6 2 3 $ 7 ,8 9 1 ,5 3 9
8,000,000
$ 6 ,5 1 9 ,5 4 8
6,000,000
5 ,3 7 8 ,6 2 7 4 ,5 7 1 ,8 3 3
4,000,000
2,000,000
0
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007
1\ In FY 2006 revenues are expected to decline 17.5% and in FY 2007 revenues are expected to decline 15%.
Capital Issues
?ASDB Operates 2 Campuses
?Phoenix Day School ?Tucson Campus (residential)
?FY 2006 Building Renewal
?ASDB received $2 million from the General Fund for Building Renewal ?The following table displays the expenditure plan approved by JCCR
Project Modular Classrooms Cafeteria Renovations Cafeteria Foundation Repair Carpet Replacement Library Lighting School Bell System Replacement Fire Alarm Installation Total Campus Phoenix Phoenix Tucson Phoenix and Tucson Phoenix Tucson Phoenix Allocation $ 967,300 756,100 115,800 72,200 62,300 27,500 6,800 $2,008,000
Phoenix Day School for the Deaf
? In a report presented to the Joint Committee on Capital Review on December 2, 2004, the Schools Facilities Board (SFB) estimated that ASDB would require an additional 198,906 square feet at the Phoenix Campus ? Cost of the expansion estimated at $22.2 million ? In FY 2006, ASDB installed an additional 8,400 square feet at the Phoenix Day School
Phoenix Day School (continued)
? Expand or Relocate?
? There has been discussion about expanding and renovating the Phoenix Day School at its current location by purchasing surrounding land and upgrading existing buildings ? There has also been discussion of purchasing or entering in to a long-term lease to use an existing vacant school building for the Phoenix Day School
Arizona State Schools for the Deaf and the Blind Total Funds FY 2002 - FY 2007
$60,000,000 $52,542,900 $50,000,000 $43,479,000 $40,000,000 $42,737,200 $43,668,700 $46,810,300 $53,941,900
$30,000,000
$20,000,000
$10,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
Arizona State Retirement System
How ASRS Works
? ASRS is a defined benefit pension system. ? The employer promises the amount of the ultimate benefit to be paid. ? The employer and the employee must contribute an amount sufficient to deliver that promise. ? The employer's ultimate cost is equal to the total benefits paid out minus plan earnings on investments minus employee contributions.
How Rates are Calculated:
Making Sure Assets Cover Liabilities
? Because the employer is ultimately responsible for providing the benefit in a defined benefit plan, the contribution rate must be set high enough to collect the required assets to cover liabilities. ? When assets are sufficient to cover the liabilities (benefit payment obligations), the system is considered to be 100% funded. ? As of July 1, 2005, the ASRS was estimated to be funded at 87.5% of its actuarial liabilities.
Rising contribution rates reflect decreased funding ratios in the retirement systems
? The funded status of all the retirement systems declined from year-end FY 2004 to year-end FY 2005.
ASRS PSPRS CORP EORP FY 2004 FY 2005 91.2% 87.5%* 92.4% 104.8% 104.4% 82.1% 96.4% 95.5%
* Estimated
A new Government accounting rule may affect funded status
? GASB Rule 45 requires that retiree health benefit liability be reported in the same way that pension liability is reported. ? This included the sharing of risk between populations, which will cause unfunded liability for ADOA, as current employees subsidize retirees. ? ASRS funds its retirement benefit through the retirement contributions as a 401(h) plan. ? It is unclear how this rule may affect ASRS.
ASRS Funded Status
-- Assumes 8% investment return -- Full funding of the contribution rate -- No benefit expansions
130 120 P e r c e nt Funded 110 100 90 80 70
03 07 09 97 99 01 05 95 19 20 20 19 20 20 20 20 11 19 20 13
- Actual rate is higher than the normal cost to pay the unfunded liability - The FY 2007 rate increase will cost the State General Fund $24 M
10.00 8.00 6.00 4.00 2.00 0.00
Normal Cost Contribution Rate
ASRS Normal Cost vs. Contribution Rate
92
98
04
90
94
96
00
02
06 20
19
19
20
19
20
20
19
19
20
08
Despite recent investment gains, past losses continue to affect the funding status.
? ASRS underperformed the assumed 8% from FY 2001 to FY 2003. ? Recent gains are not enough to eliminate the unfunded liability created by the fund's underperformance. ? Gains and losses in the fund are recognized over a 10 year period. As a result, currently more of the losses are recognized than gains. ? This smoothes out the peaks and troughs in the investment returns.
Arizona State Retirement System Total Funds FY 2002 - FY 2007
$60,000,000 $51,403,700 $53,278,300 $58,926,900 $55,789,800
$45,000,000
$42,983,300
$41,359,700
$30,000,000
$15,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
1/
FY 2007 JLBC
Other Appropriated
Federal
Office of Tourism
Office of Tourism Funding Sources in FY 2007
Gaming $5 M
20%
AZSTA $5 M
20%
40%
General Fund $15 M
Tourism Total Budget = $25 M
Funding Sources for the Office of Tourism
Sources of Funding F und Tourism Formula 3.5% of bed tax General Fund 3% of amusement tax 2% of restaurant tax Subtotal from Tourism Formula Tourism & Sports Authority Partial allocation of 1% of bed tax and 3.25% car rental tax (Prop. 302) Tourism Fund Tribal Gaming 8% of state's share of gaming proceeds, after distribution to Department of Gaming (Prop. 202) Total
F Y 2005 $3,525,000 1,220,300 7,202,000 11,947,300
FY 2006 $3,968,000 1,306,900 7,928,600 13,203,500
FY 2007 $4,503,700 1,483,300 8,999,000 14,986,000
4,650,000
4,882,300
5,126,400
Tourism Fund
4,486,200 $21,083,300
4,661,900 $22,747,700
5,047,600 $25,160,000
Office of Tourism Total Funds FY 2002 - FY 2007
$30,000,000 $25,160,000 $25,000,000 $22,747,700 $19,525,500
$20,000,000 $15,363,900
1/
$15,000,000
$14,000,700
1/
$11,001,100 $10,000,000
$5,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
TSA Transfer
Es t. FY 2006
FY 2007 JLBC
Other Appropriated
Tribal Gaming
1/ In FY 2002 and FY 2003 the Tourism Fund was appropriated, and became non-appropriated in FY 2004.
Department of Transportation
MVD Wait Times Have Grown Significantly
W ait Times Have Risen, While Clerks Declined
1000 900
Clerks
40 866
Wait Time
33
35 30 25
Wait Time
800 700 600 500 14 ' 03 ' 04 ' 05 ' 06
cl erks
680
20 15 10
? Wait time understated ? does not include total visit ? Wait time increased despite a 10% decline in-person customers over last several years
JLBC Recommendations to Enhance Oversight
? Require report on where funding for MVD counter clerks was shifted by July 31, 2006 ? Require annual MVD wait time report to include total wait time, number of customers who leave without completing transactions, and vehicle registration renew by mail turnaround time ? Require JLBC approval before allowing fund transfers into or out of MVD ? JLBC does not recommend Executive's $1.1 M and 25 FTE MVD Expansion -- Need report on prior shift of clerks
JLBC Recommended Changes Above FY 2006
Motor Vehicle Division
$500 K New MVD Computer System Planning
-- Current system is old and federal REAL ID Act of 2005 requires states share certain data -- Requires ITAC and JLBC review of assessments -- Executive concurs but without reviews
Besides $1.1 M Customer Service Expansion, Executive Recommends Other MVD Issues
202 $200 167 150 164
$100 60
$0 M VD Call Center M VD Renew by Mail M VD Third Parties Ve hicle Inspection Nogale s Port-of-Entry
($ in Thousands)
JLBC Recommended Changes Above FY 2006
Highway Operating
$1.8 M
Highway Maintenance Workload
-- For 232 additional maintenance lane miles in FY 2007 -- Prop. 400 will add $9 M in Maricopa County -- Executive recommends $4.7 M for workload -- Executive recommends $1.1 M to expand Camp Verde maintenance camp
1,065 $1,000
Non-MVD Executive Recommendations
600 $500 380 320
$0 Expand Camp Verde M ainte nance Camp Bridge Inspection SETIF Border Projects Grand Canyon Airport Equipme nt
($ in Thousands)
ADOT Capital
-- HURF collections generated from fuel tax, vehicle license tax, vehicle registration, driver's license, etc. $ in M Total HURF $1,397 Less DPS Operating 66 Less DPS Parity Compensation 3 Less Locals 658 Less Controlled Access 102 Less Economic Strength 1 State Highway Fund $567
FY 2007 HURF Collections Projected to be $1.4 B
-- Funds both operating and construction costs
$ in M $567 15 366 42 23 $151 85 66
FY 2007 State Highway Fund
State Highway Fund Plus Other Income Less ADOT Operating Less DPS Operating Less Capital Outlay & Misc. Subtotal Statewide Highway Construction Debt Service
FY 2007 Highway Construction Program Revenue Totals $1.37 Billion ($ in Millions)
GANS, $150 Highway Fund, $151 Controlled Access, $102 1/2 Cent Bond, $255
HURF Bond, $46 Federal Aid, $466 1/2 Cent, $198
$5,000
4 ,7 0 0
Comparison of JLBC - Executive Capital Recommendations
3 ,6 0 0 3 ,3 0 0 3 ,1 0 0 3 ,2 0 0
$4,000
3 ,7 0 0
$3,000
JLBC
2 ,7 0 0 2 ,3 0 0
Ex ec utive
$2,000
$1,000
$0 Building Renewal Surpris e MVD
0
0
0
100
M arana MVD
Highway Buildings
Grand Canyon Hous ing
ADOT He adquarte rs
($ in Thousands)
-- Executive also recommends $118 M repayment of '05 VLT shift
Department of Transportation - Operating Budget Total Funds FY 2002 - FY 2007 1/
$420,000,000 $385,251,400 $364,006,100 $409,086,400 $410,160,300
$315,000,000
$300,933,200
$300,935,600
$210,000,000
$105,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
1/ FY 2004 and beyond reflects transfer of $50.7 million in ADOT employee expenditures from capital budget to operating budget.
School Facilities Board
School Facilities Board Programs
Deficiencies Correction
? Correct existing facility deficiencies
Building Renewal
? Maintain facilities at the minimum guidelines
New School Construction
? Provide land and facilities to districts for student growth
FY 2007 Funding
$ in millions
New Construction: Debt Service: Building Renewal: Deficiencies Correction: Operating Budget: TOTAL FUNDING:
JLBC $250.0 75.7 86.3 0.0 1.6 $412.0
OSPB $263.3 75.7 79.0 0.0 1.6 $419.7
New School Construction Funding
JLBC
Continues to provide $250 M to cash finance new construction.
? 22 new projects for 22,000 students ? 37 projects that will be completed for 33,500 students
OSPB
Provides $263.3 M cash for new construction.
? $4.3 M increase for inflation ? $9.1 M increase to count FDK students as 1 ADM -- Total cost to implement over 5 years of $180 M.
New School Facilities Funding History FY 2007 Continues Cash Financing Enacted in FY 2006
(Represe nts General Fund contribution -- not actual spending)
$400 $400
$300 $250 $ in millions $200 $200 $167 $250 $250 $250
$200
$185
$100
$0 FY 1999 FY 2000 FY 2001 FY 2002
Cas h Financing
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007 JLBC
Le as e -Purchas e Financing
FY 2007 New School Facilities Balance Sheet
Beginning Balance: General Fund: Lease Revenue: TOTAL AVAILABLE: Land: Schools: Emergency Deficiencies: TOTAL SPENDING: Fund Balance
$ in millions
$ 54.3 250.0 10.0 314.3
35.0 278.1 1.0 $314.1 $181,400
New School Construction Projects Completed
47 40 32 20 33 40 37
F Y 2001
F Y 2002
F Y 2003
F Y 2004
F Y 2005
F Y 2006 Est.
F Y 2007 Est.
Total Students Housed at Projects FY 2001 = 12,047 FY 2004 = 26,258 FY 2006 = 23,709 FY 2002 = 25,544 FY 2005 = 21,806 FY 2007 = 33,494 FY 2003 = 29,247
Building Renewal Funding
JLBC
? Adds $16.3 M to fully fund revised formula. Includes:
JLBC adopted inflation (12.85%) Building age increases New space $9.1 M $6.0 M $1.2 M
OSPB
? Adds $9.0 M for JLBC adopted inflation. ? Does not amend existing formula.
? Under current formula, obligation would be $161.5 M. ? Executive underfunds by $82.4 M.
Building Renewal Formula Changes
? ? ? ? Cap building age at 30 years Equalize funding for portable buildings Use replacement cost per square foot Use square footage per student designated by minimum adequacy guidelines
Building Renewal Funding History Total Funding Provided = $606.8 M GF
$150
$122.7
$100 $ in millions $82.5 $75.0 $62.1 $50 $38.3 $70.0 $70.0 $86.3
$0 $0 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 JLBC
Deficiencies Correction
JLBC/OSPB
? Decrease of $20.0 M GF to eliminate funding for the Deficiencies Correction program. ? Program to be completed at the end of FY 2006.
? Annual debt service costs of $90 M continue to FY 2018.
Emergency Deficiencies Correction
? FY 2007 = $1.0 M ? SFB plans to transfer amount from the New School Facilities Fund.
FY 2007 School Facilities Board Net Spending Increase: $21 M
$30 $20 $25 $16
$ in millions
$10 $0 ($10) ($20) ($30) Ne w Construction Cash Ne w Construction Debt Financing Se rvice Building Renewal De ficie ncie s Correction $0
($20)
Sc hool Facilities Board Total Funds FY 2002 - FY 2007
$1,000,000,000 $930,243,100
$750,000,000
$697,775,800
1/
$701,130,300 $646,906,100 $603,107,800 $567,412,400
$500,000,000
$250,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
1/ Does not include transfers made during FY 2002 totaling $150 M from the Building Renewal and New School Facilities Funds to the General Fund.
Department of Administration
Arizona Department of Administration FY 2007 Key JLBC - Executive Differences Othe r Appropriated Funds
Ris k Mgmt Lo s s e s
$ 5 ,0 0 0 ,0 0 0 4 ,4 2 8 ,8 0 0 4 ,4 2 8 ,8 0 0 $ 4 ,0 0 0 ,0 0 0
HRIS Debt Se rv ice
IT Equipment
Ex e cutiv e Tower Se lf-Ins urance Capito l Police Adminis tratio n
Pro cure me nt Ins urance
Data Warehouse (Fo o tno te Chang e )
$ 3 ,0 0 0 ,0 0 0
$ 2 ,0 0 0 ,0 0 0 1 ,2 3 8 ,0 0 0 1 ,2 3 8 ,0 0 0 $ 1 ,0 0 0 ,0 0 0 2 8 2 ,8 0 0 $0 7 1 6 ,3 0 0 1 0 0 ,0 0 0
($ 1 ,0 0 0 ,0 0 0 )
(7 5 0 ,0 0 0 )
($ 2 ,0 0 0 ,0 0 0 )
JLBC
Executive
Arizona Department of Administration FY 2007 Key JLBC - Executive Differences Ge neral Fund
Cons ol i dated Recrui tment $ 1 ,2 0 0 ,0 0 0 B l uepri nt Archiving S ys tem AzGU Bus Subsidy S mall Business Contracti ng Leas e Purchase Adjus tments
$ 1 ,0 0 0 ,0 0 0
1 ,0 0 0 ,0 0 0
$ 8 0 0 ,0 0 0
7 5 0 ,0 0 0
$ 6 0 0 ,0 0 0 5 0 0 ,0 0 0
$ 4 0 0 ,0 0 0 2 5 8 ,7 0 0 $ 2 0 0 ,0 0 0 5 3 ,1 0 0 $0 2 3 7 ,5 0 0
2 0 ,1 0 0
JLBC
Executive
Arizona Department of Administration Arizona Network (AZNet) Charges
? ? Statewide Telecommunications Management Contract in January 2005 created AZNet, a new statewide telecommunications program. Executive balance sheets include $15 M increase for higher AZNet charges. ? $10 M GF ? $4.1 M OF ? $0.9 M NF Governor's moratorium on telecomm spending implemented in FY 2005 resulted in agencies using those dollars for non-telecomm budget items. $15 M increase includes $3.5 M to repay a lease the Telecommunications Program Office (TPO) used to finance the transition to the management contractor. Detail on this repayment not yet available. Laws 2005, Chapter 301 requires TPO initial contract and carrier cost rate structure by agency and fund type. JLBC Staff requested submission for JLBC review by February 15, 2006.
? ?
?
Arizona Department of Administration Total Funds FY 2002 - FY 2007
$900,000,000 $768,817,500 $750,000,000 $656,292,000 $602,076,700 $600,000,000 $724,778,600
$836,487,300
$841,569,000
$450,000,000
$300,000,000
$150,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
Department of Revenue
Business Re-engineering/Integrated Tax System (BRITS)
? Contract was awarded August 2002 to integrate separate tax systems, improve enforcement, and increase revenues to the state ? Supposed to pay for itself through the diversion of revenue ? did not require an appropriation ? Had problems with transaction privilege tax conversion in January 2004 ? Corporate income tax conversion is scheduled for July 2006
Cost of BRITS
? Contract originally cost $133.7 M, including $122.7 M principal and $11 M interest ? Prior to November '05, project behind schedule in paying contractor ? Due to collections accumulated but previously unallocated, from May through September '05, project payments now ahead of schedule $34 M ? DOR signed a $6.4 M extension to continue operating the BRITS data center for 4 years ? permits further diversion of General Fund without appropriation
JLBC Recommendation
? Require legislative authorization prior to any future BRITS contract extension that would increase the cost of the contract
Further BRITS Funding
? JLBC does not recommend Executive's $3.4 M for BRITS and property tax system hardware and software maintenance ? GITA has approved $1.2 M in FY 2007 to refresh computer equipment 4 years old or older ? Need further research
Kerr Lawsuit
? The 1989 case of Kerr v. ADOR, challenged the state taxing federal employees' retirement contributions but not those of state employees ? DOR paid $13.7 M in 1997-1998, including $10.7 M in refunds to qualified taxpayers and $3 M to plaintiff's lawyers, after State Board of Tax Appeals ruled in favor of taxpayer ? Subsequent court rulings extended the deadline for filing timely refund claims ? DOR is negotiating to settle the resulting extension of the lawsuit, and has requested $1.3 M non-lapsing General Fund supplemental in FY 2006 for administration costs ? Executive allocates $15 M in '07 for taxpayer payments -- Needs further research
Department of Revenue Total Funds FY 2002 - FY 2007
$70,000,000 $61,546,000 $56,000,000 $62,417,800 $59,321,300 $67,756,800 $69,609,800
$65,410,500
$42,000,000
$28,000,000
$14,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
Department of Public Safety
Highway Patrol Funding Issues FY 2007 Key JLBC - Executive Differences
Additional Personnel & Staff $ 6 ,0 0 0 ,0 0 0
$5,204,200
Sworn Pay Adjustment
One-Time Equipment
Helicopter Replacement
$ 5 ,0 0 0 ,0 0 0 $ 4 ,0 0 0 ,0 0 0 $ 3 ,0 0 0 ,0 0 0 $ 2 ,0 0 0 ,0 0 0 $ 1 ,0 0 0 ,0 0 0
$4,806,000
$2,768,000
$3,000,000
$12,100
$12,100
$0 ($ 1 ,0 0 0 ,0 0 0 ) ($ 2 ,0 0 0 ,0 0 0 )
$(2,068,200)
$(1,984,200)
($ 3 ,0 0 0 ,0 0 0 )
JLBC
Exec utive
FY 2007 Highway Patrol Staff
JLBC Executive
Sworn Officers & Staff
? ? ?
$4.8 M
HURF
$5.2 M
GF
Includes an additional 37 Officers, 4 Sergeants, and 5 staff positions In FY 2006, received funding for 28 Sworn Positions Subsequently, DPS held 25 Sworn Officer Positions vacant to provide an additional pay raise ($1,816) to Officer II and Officer III classifications.
As a result, JLBC recommends enhanced oversight including:
? ? ? ? Full staffing of the 25 FTE Positions intentionally held vacant by DPS JLBC review of the DPS expenditure plan for the 46 new positions prior to implementation Report to the JLBC on DPS' Sworn Officer staffing levels JLBC approval prior to shifting monies appropriated for sworn personnel
Sworn Salary Adjustments
JLBC Executive
Sworn Salary Adjustment
$2.8 M
PCF
$3.0 M
PCF
? Parity Compensation Fund receives 1.51% of Vehicle License Tax (VLT) revenues that would otherwise be deposited into the State Highway Fund ? $2.8 M is available for pay raises. DPS can determine the allocation, unless otherwise directed by the Legislature. ? Provides on average a $1,669 (or 3.1%) salary increase per sworn employee. ? With adjustment, DPS pay is comparable to '05 market (14 Law Enforcement agencies in Arizona who employ in excess of 100 Sworn employees). ? DPS may fall behind again after latest round of local pay increases. However, DPS also pays 5% of employee's retirement contribution. ? With the Executive's proposal to alter VLT collections, it is unclear at this time if the fund can support the $3.0 M Executive recommendation.
DPS Sworn Personnel Salaries Relative to Market 1/
$120,000
FY 2007 DPS
$104,459 $90,096 $86,775 $71,517 $71,065 $98,058
$100,000 $80,000
Market Average
Compensation
$58,078
$60,000 $40,000 $20,000 $0
$40,786 $41,266
$57,939
$61,721 $55,628
ENTRY
MAXIMUM OFFICER
ENTRY
MAXIMUM
MAXIMUM Lieutenant
MAXIMUM Cmdr./Captain
SERGEANT
Classification
1/Salary
figures were provided by DPS and are as of August 2005. Assumes the market's distribution among employee classifications are the same as DPS.
FY 2007 DPS salary figures assume all classifications receive $1,669, actual allocation is to be determined by DPS upon JLBC review.
Criminal Investigations / Scientific Analysis / AZAFIS
- Changes above FY 2006
Sex Offender Compliance and Enforcement (3 FTE's)
$700 K
GF
JLBC
$688 K
GF
Executive
? Provides 2 detectives and 1 criminal intelligence analyst to Identify and track down absconders (currently, 728) who have failed to register. ? Includes a decrease of $(355) K and (5) FTE Positions in the Sex Offender Monitoring Fund.
New Crime Lab Personnel (11 FTE's)
$881 K
OF
$873 K
OF
? Since FY 2000, total submissions to the crime lab have increased 56.0%, while the number of appropriated positions have increased 30.7%.
Fingerprint Identification System Upgrade
$808 K
OF
$808 K
OF
? Upgrade would include improved tenprint speed and accuracy, palm print matching capabilities, and 2-finger rapid identification, among other features.
FY 2007 Executive Recommendations HURF Shift
? Executive is recommending a shift of $38.2 M in Highway Patrol funding from HURF to the General Fund. ? Of the $38.2 M in newly available HURF monies, approximately 50% will go to local governments and 50 % will go to state road construction. ? These shifts would increase the local government share by an additional $19.1 M. ? Under the JLBC baseline, local government HURF funding is already projected to increase by $43.0 M, or 7.0%, under the existing formula. ? In addition, the Executive is recommending $158.0 M in one-time General Fund transfers to HURF, including: ? $40.0 M to pay back prior use of HURF monies for DPS ? $118.0 M to pay back a transfer of VLT revenue to HURF
Executive's FY 2007 Recommendations
-10 non-border enforcement issues would add $5.7 M Policy Issue GF Cost
1. Fuel Budget 2. Identity Theft Squad (8 FTE's) 3. Sexual Violence Victims Treatment Grants (1 FTE) 4. Methamphetamine Distribution and Use Efforts 5. 911 Call Takers (4 FTE's) 6. Support Staff (5 FTE's) 7. New Highway Patrol Vehicles above $6.8 M Base 8. Mainframe Computer and Aviation Costs 9. Contact Tracking System 10. Governor's Office of Highway Safety (Highway Fund) Non-Border Enforcement Issue Total
1.
$1.5 M $973 K $500 K $750 K $152 K $408 K $424 K $765 K $79 K $198 K $5.7 M
Executive Propose $72.7 M DPS Border Security Package
Policy Issue GF Cost
1. 2. 3. 4. 5. 6. 7. 8.
16 FTE's for 2 GITEM Squads 16 FTE's for Human Trafficking/Smuggling Squads 12 FTE's for a Domestic Terrorism Squad 2 Border Security Block Grants Microwave Communication System Upgrade Establishment of a Missing Persons Database Southern Region Auto Theft Details Border Security Reserve Fund (one-time)
$2.1 M $1.8 M $2.0 M $13.1 M $1.9 M $596 K $1.4 M $50.0 M $72.7 M
DPS Border Security Package Total
Department of Public Safety Total Funds FY 2002 - FY 2007
$300,000,000 $260,058,200 $250,000,000 $222,062,700 $200,000,000 $171,920,800 $150,000,000 $200,049,000 $184,092,300 $254,130,900
$100,000,000
$50,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
State Land Department
FY 2007 JLBC Budget
? Dam Repair - $230,600 Risk Management Fund
? Will provide funding to repair 3 dams in the Maricopa County Flood Control District that are labeled "High Hazard Potential"
? Radio System - $96,000 GF
? Upgrade radio system used to by aircraft to fight wildfires ? Included in the executive budget
? One-time Issues - $(1.4) million GF & $(319,600) OF
? Removes one-time funding
Executive Budget Issues
Fire Suppression
? $7.3 million GF supplemental for bills incurred fighting fires during FY 2005 and the first part of FY 2006:
? We need a better understanding of outstanding claims ? Partial list of bills ? Not all outstanding bills have been submitted to the department ? $600,000 for bills payable to other state agencies ? $250,000 spent on hurricane assistance
? Executive also provides $1.9 million GF for additional fire suppression funding in FY 2007.
Trust Land Management
? The Executive recommends $1.8 million GF for increased trust land management funding
? Executive amount is over and above the $2.5 million FY 2006 appropriation to generate added trust land sales. ? Need further clarification on expected incremental revenue gains from new FY 2007 resources. ? The JLBC recommends better defining performance measures relative to trust land issues in order to better understand the performance of trust land activities.
State Land Department Total Funds FY 2002 - FY 2007
$45,000,000 $42,600,300
$42,337,000
$36,437,700 $36,000,000 $32,474,700 $32,231,800 $31,139,500
$27,000,000
$18,000,000
$9,000,000
$0
Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Est. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
Department of Commerce
Executive Policy Issues for FY 2007 for Commerce Total GF = $28,178,300 above FY 2006
Innovation Arizona
? ? ? ? ? ? ? Investment and job creation in science-based research fields Need further details on evaluating success
$25M GF
Jobs for Arizona Graduates
Program currently in DES budget with federal monies. Program has not submitted Committee-requested performance measures If funded, more appropriate in DES or ADE
$500,000 GF
Rural and Tribal Economic Development
4 FTEs to promote rural and tribal economic development Legislature approved 4 Rural Development FTEs in FY 2005. Unclear how these new FTEs would interact with existing FTE positions Auditor General indicated in 2003 that other agencies, including the federal Small Business Administration and Community Colleges offer small business support. Executive would shift $2.2M onto GF from CEDC Fund appropriation in order to free up monies for loans and grants
$266,800 GF
Small Business Support Center
?
$211,500 GF
CEDC Fund ? Funding Shift and Restoration
?
$2.2 M GF
CEDC FUNDS
- Executive proposes to shift $2.2 M of Operating Budget to GF - Frees Up Non-Appropriated Loans and Grants
Current
Ope rating Budget $ 3 Million Loans and Grants $1.3 Million
Executive Recommendation
Ope rating Budget, $700,000 Loans and Grants $3.6 Million
Department of Health Services
JLBC-Funded Issues Above FY 2006
--
Recommendation adds $50.5 M GF in FY 2007
$ in millions General Fund ? Title XIX Growth ? GF Backfills Other Funds ? Newborn Screening ? Vital Records ? Nursing Care Incentive Grants $46.7 3.9
2.2 0.5 0.1
-- Despite 224% Increase in Funding Since FY 2001, Quality of Service Remains Unclear
? ? ? Population accounts for approximately ? of increase General Fund accounts for approximately one-third of total funding Expected that approximately 135K individuals will utilize services in FY 2007
$ 1 ,5 0 0 $ 1 ,2 0 0
$ in Millions
DHS Behavioral Health Total Funds Would Increase by $108 M in FY 2007
$ 1 ,1 0 8 $771
$900 $600 $342 $300 $0 '01
'04 Total Spending
'07
Update on Arnold v. Sarn Litigation
? Lawsuit filed in 1981 claiming inadequate treatment of Seriously Mentally Ill in Maricopa County ? Case upheld by AZ Supreme Court in 1989 ? In 1998, a Court Monitor was appointed to conduct independent reviews of the behavioral health system in Maricopa County ? DHS and Plaintiffs agreed to Exit Stipulations a year ago ? Most recent report indicated that the Maricopa RBHA fell short in 6 of 8 performance measures related to the agency's Corrective Action Plan ? Court Monitor found progress in fulfilling "paperwork" requirements (e.g., each patient has an individual service plan) but found that progress needed to be made in the "quality" of service delivery
Behavioral Health Oversight
In order to increase legislative oversight, JLBC recommends: Implementing New Performance Measures: - % of Priority Clients that have Case Managers - % of Priority Clients that have Clinical Teams - % of Priority Class Clients that have 6 month reviews - % of Priority Clients that have ISPs Reporting Requirements - Require that DHS report quarterly to the JLBC on progress made towards settling the Arnold v. Sarn lawsuit Auditor General Review due November 2006
What are Capitation Rates?
? Specific Rate Paid to Health Plans ? Per Enrolled Member, Per Month ? Based on Average Cost Per Person ? Paid Regardless of Services Used ? Adjusted for utilization rate and inflation ? Agency used capitation adjustment process to implement policy changes in FY 2006 after Legislature had rejected the agency's requested increase ? JLBC recommendation would statutorily restrict capitation rate changes to utilization and inflation ? Policy issues or programmatic changes that would affect capitation rates would be approved by the full Legislature
Title XIX Caseload and Capitation Rate Differences
JLBC Baseline Caseload Growth (weighted average) Capitation Rate Growth (weighted average) Dollar Growth ? 3.6% 7.0% $46.7 M Executive (1.2)% 9.7% $36.3 M
?
JLBC is a consensus estimate based on JLBC Staff forecast, AHCCCS model and U of A econometric model - Behavioral Health caseloads based on eligibility for AHCCCS - None of consensus models predicted a decline in caseloads in FY 2007 Executive adds $10 M FY 2006 supplemental due to higher Arnold funding - JLBC does not include since Legislature had previously rejected
General Fund Backfills
JLBC Recommendation includes $3.9 M in GF backfills Arizona State Hospital Fund Poison Control Center Fund JLBC $1.6 M $2.2 M $0.1M Executive $1.6 M $1.1 M $0
1/
Declining county contributions to RTC Program
Declining telecommunication tax revenue
Arizona Medical Board Fund
Eliminate backfill done during shortfall
1/ Executive includes $350K backfill for Poison Control Fund in FY 2006
Other Fund Issues
Newborn Screening Program
? ? ? ? ? ? ? ? ? JLBC Recommendation adds $2.2 M from fees in FY 2007 Legislation last session increased # of disorders tested for and fee Executive concurs with JLBC recommendation JLBC recommendation includes $500K for operating costs Recommendation would also reduce portion of the fee that goes into Vital Records Fund by approximately 35% Executive retains fund as non-appropriated and does not reduce fees JLBC recommendation makes $200K appropriated in FY 2006 non-lapsing Executive adds $1.3 M in FY 2007 for backlogs and salaries JLBC recommends DHS report on their progress in planning for flu pandemic
Vital Records Program
Licensing Backlogs
Flu Pandemic Planning
FY 2007 Changes Above FY 2006 JLBC vs. Executive
Title XIX GF Backfills N e wborn Screening Vital Records N urs ing Care Grants Program Expansions
-(2 8 .5 ) M GF $ 2 .7 M GF $ 3 .9 M $2.2M OF $ 2 .2 M $ 5 0 0 ,0 0 0 OF $128,500 OF $128,500 $27.4 M GF/OF $36.3 M GF $ 4 6 .8 M
State Hospital DSH Shift
-$ 4 5 ,0 0 0 ,0 0 0 -$ 3 0 ,0 0 0 ,0 0 0 -$ 1 5 ,0 0 0 ,0 0 0 $0 $ 1 5 ,0 0 0 ,0 0 0
$28.5 M OF $ 3 0 ,0 0 0 ,0 0 0 $ 4 5 ,0 0 0 ,0 0 0 $ 6 0 ,0 0 0 ,0 0 0
JLBC
OSPB
Executive-Only Initiatives
Executive Spends $27.4 M on New or Expanded Programs in FY 2007
10,000 8,551 7,500 $ in T h o u s a n d s
5,000
5,000
4,454 3,000
2,500 1,150 480 0 648
1,857 745
1/
1,304
2/
200
e
s
in e
us
M
m
ata
ue
in g
I
s
es
s
s
l
rS
Ab
Iss
-p
ste
cc
nt
ri n
er
Li ce
Va
Co
et h
Sy
Ce
pit al
yS
Pe
in g
In fo
M
D
lt h
us
rt
os
ea
tor
sk
Pa
eH
tio n
Ho
ty H
gh
bo
re
ni za
St at
Hi
La
i ca
mu
un i
M
Im
1/ Executive recommends $354,100 in supplemental funding for lab issues in FY 2006 2/ Contains $101,400 in Other Funds
Co
mm
Ch
ed
ild c
ar
eC
Ri
ra
on
su
lt a
fo
tio n
ay
vi c
er
ns
Executive's Disproportionate Share Hospital (DSH) Proposal Generates No Net Savings ? State receives $28.5 M in federal DSH Payments for the Arizona State Hospital ? deposited to General Fund to reimburse GF's current $55 M cost ? Executive Recommendation would appropriate DSH monies directly to the Hospital, and reduce GF spending by $28.5 M ? While the State Hospital would see General Fund savings, there would be no net impact to the state as GF revenues would decline ? JLBC recommendation does not include this fund shift
Department of Health Services Total Funds FY 2002 - FY 2007
$1,800,000,000 $ 1,607,593,500 $ 1,504,490,600 $1,500,000,000 $1,306,905,500 $1,200,000,000 $ 1,045,213,600 $905,052,200 $900,000,000 $1,177,301,300
$600,000,000
$300,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
FY 2007 JLBC
Other Appropriated
Federal
AHCCCS
AHCCCS Eligibility
250% 200% 150% 100% 50% 0% Infants Children 1-5 Children 6-18 Pregnant Women Aged, Blind & Disabled Parents Childless Adults Spend- Downs
Traditional
Prop 204
KidsCare
KidsCare Parents
JLBC Recommends $172.2 M above FY 2006 The Executive Recommends $226.1 M above FY 2006
More than JLBC
1.6 M 11.0 M 13.2 M 28.1 M
Statutory Formula KidsCare Parents DES / DHS Clawback New Programs and Expansions
- $40
- $30
- $20
- $10
$0
$ in Millions
$10
$20
$30
$40
*In addition, the Executive recommends $15.2 M for FY 2006 Supplemental
JLBC Funds $172 M in Formula Growth
? Acute Caseload Projected to Grow 3.6% (Executive: 1.2%)
? JLBC Baseline uses a consensus model of JLBC Staff forecast, U of A econometric model, and AHCCCS estimates ? Total caseload projected to reach 1.16 M by June `07
? Capitation Rates are Projected to Grow 6.0% (Executive: 5.8%)
? JLBC recommends limiting to utilization and inflation; policy requires legislative approval
? Non-capitated Costs of Fee-For-Service, Reinsurance, and Premiums Forecasted to Grow 14.0% (Executive: 23.2%)
KidsCare Parents
? Covers parents up to 200% of Federal Poverty Level ? HIFA Waiver allows Arizona to use excess federal funds to reduce Prop 204 Costs
? Previously made KidsCare Parents cost neutral
? Statutory authority eliminated after FY 2006
? JLBC Baseline does not fund in FY '07
? Executive Continues KidsCare Parents in FY '07
? Costs $11.0 M more than JLBC Baseline
Medicare Modernization Act (MMA) Budget Implications
? ? ? ? ? MMA shifts drug coverage for "dual-eligibles" from Medicaid to Medicare. Savings due to cost shift to Federal Government. "Clawback" provision requires states to reimburse federal government for 90% of estimated costs. Net savings built into JLBC Baseline in all 3 Title XIX agencies is $6.1 M. Executive proposes paying dual eligible co-pays not covered by Medicare at a cost of $4.5 M. Executive funds $13 M of DHS / DES Clawback payments in AHCCCS budget. JLBC funds Clawback payments in individual agency budgets.
Executive Adds $20.2 GF M on New and Expanded Programs
--Includes Medicare Part D Co-Pays Small Business Premium Subsidy
? ? ? ? $150/month subsidy for each employee under 200% FPL Estimated 20K individuals in FY 2007 Possible full cost of $36 M ? needs further review Subsidy in addition to $35 M in tax credits ($1K per employer) to small businesses $4 M in Hospital Residency subsidy $1 M for Recruiting Office
$6.1 M
Recruiting Arizona Physicians
? ? ? ? ?
$5.0 M
KidsCare Outreach
Return KidsCare premiums to pre-October 2003 rates $1.5 M in total funds for outreach program Adds 15,000 new recipients
$4.6 M
Executive Adds $7.9 M GF for Administrative Proposals
General Fund GF Cost
1. Eligibility Staff (101 total FTE's) 2. Information Technology 3. ADOA Data Center Charges 4. "211" Information and Referral Call Centers 5. Agency Infrastructure (18 total FTE's) 6. HIPAA Compliance GF Issues Total
Other Fund
$1.8 M $2.1 M $903 K $1.9 M $653 K $566 K $7.9 M
OF Cost
7.
Healthcare Group Administration Increase (14 FTE's)
$1.1 M
Arizona Health Care Cost Containment System Total Funds FY 2002 - FY 2007
$6,000,000,000 $5,178,046,900 $5,000,000,000 $4,062,472,800 $4,000,000,000 $2,981,319,600 $3,540,559,900 $4,760,268,800
$5,601,920,600
$3,000,000,000
$2,000,000,000
$1,000,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
FY 2007 JLBC
Other Appropriated
Federal
Arizona University System
Arizona University System (including Arizona Board of Regents) Total Funds FY 2002 - FY 2007
$3,000,000,000 $2,728,588,000 $2,500,000,000 $2,139,006,300 $2,000,000,000 $2,437,749,100 $2,265,143,500 $2,934,086,800 $3,007,037,400
$1,500,000,000
$1,000,000,000
$500,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
FY 2007 JLBC
Other Appropriated
Federal
Arizona University System FY 2007 Enrollment Growth Estimates
Campus ASU-M ASU-E ASU-W NAU UA-M UA-HSC TOTAL Formula Enrollment 47,583 2,975 6,299 16,707 32,490 1,745 107,799 Growth Percentage 4.3% 14.7% 3.4% 0.0% 0.2% 8.5% 2.6%
Arizona University System FY 2007 Proposed Enrollment Growth Funding ($)
Campus ASU-M ASU-E ASU-W NAU UA-M UA-HSC TOTAL Executive Enrollment 11.3 M 2.2 M 1.3 M 0.0 M 0.4 M 0.8 M 15.9 M JLBC Enrollment 10.4 M 2.0 M 1.1 M 0.0 M 0.3 M 0.7 M 14.5 M Over 155 Credit Hours (3.7) M (0.2) M (0.2) M (0.7) M (2.6) M (0.5) M (8.0) M JLBC Net 6.7 M 1.8 M 0.9 M (0.7) M (2.3) M 0.2 M 6.6 M
Arizona University System Over 155 Credit Hour Reduction
? ? ? Laws 2005, Chapter 330 prohibits appropriations for students with earned credit hours in excess of a credit hour threshold Chapter 330 also allows ABOR to raise tuition rates for those students Credit Hour Threshold is:
? 155 hours in FY 2007 ? 150 hours in FY 2008 ? 145 hours after FY 2008
? ? ?
Statute provides exception for students whose degree programs require additional credit hours for a degree JLBC counted all credits, including transferred credits, earned by undergraduate and post-baccalaureate students Approximately 1,500 students are over FY 2007 threshold
Arizona University System JLBC Recommended Oversight Enhancements
? ASU Downtown Phoenix Campus (new Special Line Item)
? Transfers $18.9 M GF from operating budget for 4 relocating departments ? Requires operational and capital plans for JLBC review by October 1, 2006 ? ASU envisions 2 M square feet for 6 departments and 15,000 students by 2020 ? Continues $6.0 M GF from Laws 2005, Chapter 330 ? Requires ongoing reports to JLBC on doctor shortage prevention strategies ? Permanently restricts medical schools from limiting hospital clinical rotations ? Measures undergraduate student contact with professors of any rank ? Existing measure includes all instructors except volunteers and grad students ? Less than 50% of classes currently taught by professors ? Requires JCCR review and inclusion in capital improvement plans (CIP) ? Financing through non-profit organizations or private developers ? Current statute subjects direct financing to JCCR review and CIP
?
UA Phoenix Medical Campus (continuing as Special Line Item)
?
New Professor Performance Measure
?
Indirect Debt Financing
Arizona State University Resident Undergraduate Tuition and Mandatory Fees
? ? ? Rates averaged 11.1% annual increases since FY 2001 AZ tuition ranks 40th in nation Of $701 M anticipated tuition collections for FY 2007, $299 M is non-appropriated
? ? ? ? $31 M for operations $183 M for financial aid $13 M for capital projects $72 M for debt service
$ 4 ,5 0 0
$ 4 ,0 0 0
$ 3 ,5 0 0
$ 3 ,0 0 0
$ 2 ,5 0 0
?
Recommended oversight enhancements include JLBC review of future nonappropriated tuition plans
$ 2 ,0 0 0 FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
- All Us charged same resident undergrad tuition until FY 05 - FY 05 & FY 06 amounts represent weighted averages of distinct university tuitions
Arizona University System FY 2007 Key Executive Recommendations Ge neral Fund (in Millions)
Fac Salaries ? $27.6 M Pe rformance $5.4 M Ops & Maint $3.9 M Bldg Renewal $4.0 M Wate r U. $1.5 M Acad Expand $9.9 M Economic D e ve lopme nt Financial Aid ?
AS U
NAU
UA
Financial Aid
$ 1 0 .0
$ 4 .4 $ 4 .0
$ 2 .5 $ 1 3 .6 $ 2 .0 $ 1 .4 $ 0 .9 $ 0 .6 $ 2 .0 $ 0 .5 $ 0 .5 $ 0 .5 $ 7 .3 $ 1 .9 $ 2 .0 $ 5 .5
$ 7 .6
1/ Column not to scale. 2/ The JLBC also recommends a $0.7 M GF increase for 32 new WICHE subsidies to students of associated medical programs not offered by the state universities.
Arizona University System FY 2007 Overall JLBC - Executive Comparison Ge neral Fund (in Millions)
$30.0 $28.2 $24.3
$25.0
JLBC Exec utive
$20.0 $15.4 $15.0
$10.0 $6.7 $5.0 $1.8 $0.0 $(0.7) $(5.0) ASU- Main ASU- East ASU- West NAU $(2.3) UA- Main UA- HSC $2.8 $0.9 $1.3 $0.2 $3.6 $0.7
$7.6
Financial Aid
Arizona University System (including Arizona Board of Regents) Total Funds FY 2002 - FY 2007
$3,000,000,000 $2,728,588,000 $2,500,000,000 $2,139,006,300 $2,000,000,000 $2,437,749,100 $2,265,143,500 $2,934,086,800 $3,007,037,400
$1,500,000,000
$1,000,000,000
$500,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
FY 2007 JLBC
Other Appropriated
Federal
Community Colleges
FY 2007 State Funding
Changes from FY 2006
Operating State Aid
? ? Formula reflects only FTSE growth of 4% (Declining districts held harmless) Formula FTSE total 120,064 (total FTSE used in FY 2007 formula)
$4.2 M
Capital Outlay State Aid
? ?
Less than 5,000 FTSE = $210/FTSE More than 5,000 FTSE = $160/FTSE
$0.7 M
Equalization Aid
?
Funding for districts with low property tax valuation
$2.6 M $0
Tribal Colleges
? ? ?
Funding for capital and maintenance expenses Generated from sales tax revenues $1.75 M annual appropriation
General Fund FY 2002 - FY 2007 Total General Fund Support Has Increased 20% Equalization Aid Has Increased 80%
$160
$143.6 M $132.8 M $11.1 M $127.3 M $10.2 M $15.4 M $128.3 M $11.1 M $15.4 M $15.5 M $19.6 M $18.8 M $20.3 M $159.8 M $152.3 M $20.0 M $17.4 M
$120
$16.1 M
$ in Millions
$80
$119.5 M
$105.5 M
$101.7 M
$101.7 M
$109.3 M
$115.3 M
$40
$0 Actual FY 2002 Actual FY 2003
Operati ng
Actual FY 2004
Actual FY 2005
Es timate d FY 2006
Equali zation
FY 2007JLBC
Capi tal Outlay
Total Operating Funds FY 2007
(Excludes Bond Proceeds and Fund Balance)
Cochise Coconino Gila Graham Maricopa Mohave Navajo Pima Pinal Yavapai Yuma/La Paz Total
$
4 6 , 6 3 1 ,4 0 0 2 0 , 9 7 3 ,9 0 0 3 , 5 2 0 ,3 0 0 3 3 , 1 9 5 ,1 0 0 8 4 4 , 9 4 4 ,5 0 0 3 5 , 0 1 7 ,4 0 0 2 9 , 3 2 9 ,4 0 0 1 8 1 , 3 5 6 ,4 0 0 5 3 , 5 6 0 ,8 0 0 5 8 , 2 8 3 ,7 0 0 4 6 , 2 9 7 ,5 0 0 1 , 3 5 3 ,1 1 0 , 4 0 0
$
Arizona Community Colleges Total Funds FY 2002 - FY 2007
$2,000,000,000 $1,737,234,500 $1,534,097,000 $1,500,000,000
Note: Growth in "Other" due to bond proceeds
$1,388,220,600
$1,039,384,300 $1,000,000,000 $912,198,600 $952,901,600
$500,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Tuition/Fees
Es t. FY 2006
Other
FY 2007 JLBC
P roperty Taxes
Department of Juvenile Corrections
JLBC baseline adds $1.3 M for Population Growth, while Executive adds $1.1 M
? Current Funded Beds: ? Current 6-month average:
? Population ranged between 611 and 665
623 641 671 655
? FY 2007 JLBC: ? FY 2007 Executive:
(Includes appropriated, non-appropriated and federal monies)
150,000 116,100
DJC Cost Per Bed
104,800 109,600
1/
111,700
100,000 Cost in $ 68,200 50,000
85,100
0 FY 2001 Actual FY 2004 Actual FY 2005 Actual FY 2006 Es timate FY 2007 JLBC FY 2007 Exe cutive
1/ Average length of stay is 9 months, therefore graph represents actual cost per bed not per juvenile.
(Civil Rights of Institutionalized Persons Act) ? In 2003, a federal audit and civil rights lawsuit was initiated due to 3 youth suicides and reports of physical and sexual abuse. ? On September 15, 2004, the Governor signed an agreement with the Department of Justice, which is valid for 3 years. This agreement did not specify staff or funding requirements. ? In FY 2007, JLBC baseline retains $10.6 million in ongoing CRIPA monies. ? The latest Consultant's Report recommends additional suicide prevention measure and education staff. ? JLBC Recommendation provides $495,000 GF to complete suicide renovations and $336,800 OF for education staff.
CRIPA
JLBC/Executive General Fund Comparison
4
3.0 M 2.7 M 2.3 M
3
$ in Millions
2
1.3 M 1.1 M
1
495 K 495 K
273 K 336 K OF GF
0
Population Growth
Suic ide Prevention
Educ ation
Land Trust Shift
Salarie s
Executiv e
JL B C
Department of Juvenile Corrections Total Funds FY 2002 - FY 2007
$100,000,000
$80,875,300 $80,000,000 $69,366,300 $71,843,900 $71,953,000 $75,771,600
$82,254,600
$60,000,000
$40,000,000
$20,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
No n -A p p ro p riat ed
Es t. FY 2006
Federal
FY 2007 JLBC
Ot h er Appropriated
Attorney General
Attorney General Sources of Funding in FY 2007
Colle ction Enforcement 5% $4.3 M Anti-Racke te e ring 16% $12.6 M Cons ume r Fraud 3% $2.7 M Fe de ral 7% $5 .8 M Victims ' Rights 4% $ 3.2 M Inte rage ncy Agreements 14% $11.3 M Pas s Through Funds 6% $5.2 M Cos t Allocation 8% $6 .0 M Ge ne ral Fund 24% $19 M
Ris k Management 11% $8.6 M
All Other 2% $1.5 M
Attorney General - Department of Law FY 2007 Comparison of GF Recommendations
$ 1 ,6 0 0 ,0 0 0 $ 1 ,5 6 0 ,0 0 0
$ 1 ,3 2 0 ,2 0 0 $ 1 ,2 0 0 ,0 0 0
$ 8 0 0 ,0 0 0
$540,700
$ 4 0 0 ,0 0 0
$ 6 2 ,9 0 0 $0 $0 $0
$ 9 0 ,3 0 0 $0 $0
$ 5 9 ,0 0 0
IT Projects
Solicitor General FTE Tobacco Enforcement Pros e cution of Crimes Pos tion FTE Position Re late d to Illegal Immigration JLBC Exe cutive
Staff Safety and Se curity
Pro Rata Charge
? Shifts the cost of non-contracted AG legal services to client agencies ? Applies a pro rata charge of 0.62% to each client agency's Personal Services for both General and Other Funds ? The AG's appropriation is reduced by $(6) M GF and increased by $6 M OF ? Holds client agencies harmless by increasing their appropriations by the amount of their charge. For example, General Fund agencies will receive $3.9 M to pay their charges ? Net General Fund statewide savings equal $2.1 M
Board of Medical Student Loans
Differences Between the Loan and Scholarship Program
Criteria Selection Process
Medical Student Loan Program ? Arizona Resident ? All students attending state public and private medical institutions ? Financially Needy
Medical Student Scholarship Program ? Arizona Resident ? All students attending state public and private medical institutions ? 1st Year Requirement ? Extracurricular/academic Merit ? Preference given to those seeking an Arizona residency ? UA $32,057 ? Midwestern $55,403 ? 22 ? Living allowance taxable as income
Student Preference
Award Amount Awardees in FY 2007 Tax Implications
? UA $32,717 ? Midwestern $56,063 ?8 ? Loan not taxable as income
Board of Medical Student Loans Total Funds FY 2002 - FY 2007
$2,000,000 $1,796,600
$1,513,200 $1,500,000
$1,000,000
$500,000
$348,300
$296,600
$330,600
$296,600
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
Department of Economic Security
The JLBC Baseline adds $32 M GF for caseloads while the Executive adds $98 M GF for growth and program expansions
Executive Spending above JLBC Family Placements TANF Caseload DD Caseload P r ogr am Expansions -30 - 20 -10 0 10 20 30 40 50 60 2.3 -8.3 6.6 65.6 70 80
$ in millions
JLBC Baseline adds $11 M GF for growth in CPS permanent placements. The Executive recommends $37 M GF for growth and program expansions
12 10
$ in millions
10.7 8.0 6.3 6.3
8 6 4 2 0
R ate Increase Adoption Cas e load Pe rmane nt Guardians hip Out-of-Home Place me nts
4.5 2.1 2.7 2.7 2.5 1.4
Childre n Support Se rvice s
Drug Treatment CPS Workers
JLBC
Exe cutive
-But Executive adds $7 M for additional congregate placements
? DES presented a plan which would reduce the following measures to 0 by FY 2007: As of
March `05 Children in shelter care beyond 21 days Children under 3 in shelter care Children under 6 in group homes 1,127 108 154
DES plans to reduce expensive congregate care placements
? JLBC and Executive recommendations include incentives to increase family placements. ? Executive also includes $7.3 M for higher cost congregate placements, despite the planned reduction in these placements.
The JLBC budget provides increased Legislative oversight of the DCYF Budget
? Adds goals from "Blueprint" as performance measures to track CPS progress in meeting goals of reducing high-cost congregate care placements ? Requires JLBC approval for transfers into or out of the following line items:
? ? ? ? Children Support Services CPS Emergency Placements CPS Residential Placements Foster Care Placements
? Monitor potential loss of federal foster care monies due to new federal restrictions and time limits.
Federal TANF Block Grant has $(11)M shortfall in FY 2007
-- On-going expenditures exceed revenues by $13.2 M --Declines in the TANF cash caseload may lessen shortfall -- Executive solves FY 2007 shortfall with a "roll-forward," but structural imbalance remains
($ in millions)
JLBC Beginning Balance Base Revenues FY 07 "Roll-Forward" Total Revenues FY 07 Expenditures Ending Balance 2.1 226.6 0.0 228.7 239.8 (11.1)
Executive 2.1 226.6 11.3 240.0 237.8 2.3
TANF caseload declined 14% in FY 2005, then stabilized in the beginning of FY 2006.
? JLBC assumes 100K recipients while the Executive funds 93K. ? Executive takes $8 M in GF savings. ? If GF savings are taken, then TANF program cuts or a "roll-forward" are needed. ? New Federal TANF work requirements may lead to penalties.
140,000 130,000 120,000 110,000 100,000 90,000 80,000
1 2 3 4 5 Ju l -0
JLBC
Ju l -0
Ju l -0
Ju l -0
His torical
Ju l -0
Ju l -0
Executive
6
Executive adds $17.3 M in Child Care Funding
? The Executive adds $6.3 M to fund caseload at an average of 52,200 children per month, or an estimated 12% increase. ? The JLBC has level funding and would cover 46,700 clients, while forecasting an average demand of 49,800 children in FY 07, or caseload growth of 4.6%. ? YTD FY 06 average caseload growth is 4%. ? The Federal CCDF Block Grant allocation to the state is expected to increase, pursuant to federal legislation. ? The Executive also recommends increasing the provider reimbursement rate, at a cost of $7.9 M. ? The Executive adds $1.9 M for 30 new caseworkers in the child care program, and $1.3 M to backfill a CCDF shortfall.
The JLBC budget includes $19.1 M GF in Long Term Care formula growth
? DD Long Term Care Caseload Projected to Grow 6.5%
? Due to a technical error, JLBC recommendation understates growth by $1.4 M ? Total caseload projected to reach 19,100 by June '07 ? The Executive projects caseload at 18,900, or 5.3% growth
? Capitation Rates are Projected to Grow 3.0%
? The Executive projects 3.4% growth ? JLBC holds total administrative dollars constant at FY 2005 levels
? JLBC provides $1.5 M for provider rate increases, based on the reallocation of savings
? The Executive budget includes $7.8 M for rate increases
The Executive adds $14.9 M GF in Aging and Community Services Programs
Senior Services Adult Protective Services (30 FTE's) Domestic Violence Funding Homeless Services Emergency Services Total $ in M 8.6 1.5 2.8 1.5 0.5 14.9
Other Issues
? Federal changes in the match requirements for Child Support Enforcement could require an additional $3.6 M in state funds, which is in neither the JLBC baseline nor the Executive proposal. ? The Executive recommendation also includes:
? $2.3 M for IT related issues, including a replacement schedule for desktop computers and servers. ? $2.9 M to maximize the federal match for Vocational Rehabilitation ? $1.0 M to reinstate funding for the Summer Youth Employment and Training program, which was eliminated in FY 2006.
Department of Economic Security Total Funds FY 2002 - FY 2007
$2,800,000,000 $2,371,754,300 $2,149,848,100 $2,000,000,000 $1,860,411,900 $2,117,306,200 $2,093,250,600 $2,433,672,900
$2,400,000,000
$1,600,000,000
$1,200,000,000
$800,000,000
$400,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
FY 2007 JLBC
Other Appropriated
Federal
Judiciary
FY 2007 Judiciary Appropriated Funding = $157.8 M
Automation: $14.8 M
- JCEF $10.0 M - Def Driving $4.8 M
Probation: $84.5 M
- Adult $25.6 M - Juv $58.9 M
Judges/Admin.: $44.3 M
- Supreme $15.1 M - COA $12.4 M - Superior $16.8 M
Other Court Programs: $14.2 M
- State Aid $6.0 M - CASA $2.9 M - FCRB $2.3 M - Drug Court $1.0 M - Other $2.0 M
FY 2007 Judiciary Policy Issues
Changes Above/Below `06 Base
GF OF
? Judicial Salary Increase (Enacted) ? General Fund Backfill (CASA) ? Annualize Court of Appeals Staff ? Rent Reallocation ? Drug Court (Enacted) ? 3 Superior Court Judgeships
$942 K $102 K $117 K $291 K $1.0 M $266 K $2.7 M
-$(102) K -(392) K --$(494) K
Judicial Salary Increase
? ? ? ? FY 2007 Total Cost: $941,600 `07 salary adjustment of 12.5% enacted last session Increase will begin January 1, 2007 Will require another $941,600 to annualize in FY 2008 New Salary $145,294 142,341 139,388 135,844
Current Salary $129,150 Chief Justice (1) 126,525 Associate Justices (4) 123,900 Appellate Judges (22) 120,750 Superior Court Judges (161)
Enhanced Legislative Oversight
? Foster Care Review Board Federal Reimbursements ? JLBC review of intended use prior to expenditure ? Drug Courts ? JLBC review of $1 M provided for juvenile and adult drug courts ? $5 Probation Surcharge ? Distribute back to counties for probation funding
JLBC Baseline Retains Current Probation Funding
? Funding Sufficient to Meet or Exceed All Statutory Ratios
Category Adult Standard Adult Intensive Juvenile Standard Juvenile Intensive
Ave. FY07 Caseload 12,996 1,650 7,198 1,335
Adjusted Statutory Ratio 59:1 24:2 33:1 24:2
Actual Ratio 58:1 24:2 27:1 17:2
Judiciary Total Funds FY 2002 - FY 2007
$200,000,000
$184,253,600 $167,457,200 $170,296,500 $148,032,700
1/
$172,520,400
$153,517,500
$150,000,000
$100,000,000
$50,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
1/ The FY 2004 decrease reflects the shift of Adult Probation programs to Maricopa County.
Department of Environmental Quality
Executive FY 2007 Air Quality Recommended Increases
? ? ? ? Hazardous Air Emergency Response ? $161,000 from the Air Quality Fund and 2 FTE's Children's Respiratory Disease Database ? $220,000 from the Air Quality Fund and 1 FTE Air Quality Permit Staffing ? $123,000 from the Air Quality Fund and 2 FTE's DEQ has requested restoration of funding to the Air Quality Fund. JLBC staff is working with the department to resolve this issue.
?
Executive FY 2007 Waste Division Recommended Increases
? Hazardous Waste Program ? $500,000 increase from the General Fund. ? The JLBC recommends a $500,000 GF transfer from the department's administrative budget, which would be backfilled by unused Indirect Cost Recovery Funds. Hazardous Waste Border Inspections ? $275,000 from the General Fund and 3 FTE's Water Quality Assurance Revolving Fund ? $4.0 M from the General Fund Solid Waste Inspectors ? $127,000 from the General Fund and 2 FTE's
? ? ?
?
The JLBC recommends a new footnote to revert funds allocated to the Arizona Pollution Discharge Elimination System if the authority to administer this program is returned to the EPA.
Executive FY 2007 Water Division Recommended Increases
? Rural Water Supply Development ? $15.0 M from the General Fund ? Water Permitting Program ? $200,000 from the Water Quality Fee Fund and $200,000 from the General Fund. ? The Water Quality Fee Fund does not have sufficient funding to support the Executive recommendation. ? Safe Drinking Water Compliance Assistance ? $216,000 from the General Fund ? Clean Colorado River Alliance ? $120,000 from the General Fund
Department of Environmental Quality Total Funds FY 2002 - FY 2007
$350,000,000 $346,806,000 $327,904,000 $342,357,400
$300,000,000 $260,466,900 $250,000,000 $211,075,700 $200,000,000 $231,885,400
$150,000,000
$100,000,000
$50,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
Department of Water Resources
With DWR's Higher Water Supply Fees, Permitting Program Can Be Shifted to New Fund ? All developers must receive a permit. ? `05 legislation allows department to retain fees. ? New fee structure will generate $2 M. JLBC would reduce existing GF by $1.7 M. ? While Executive proposed this shift last year, recommendation was not included this year.
? Will free up monies for other department activities.
Executive Proposes to Add General Fund to the Water Protection Fund for the First Time Since `99
? Appropriation was established in statute in 1994. ? Monies are used for the protection and restoration of rivers, streams, and associated riparian habitats. ? Fund sources also include Central Arizona Project fees which totaled $1.6 M in '05. ? If funded, JLBC recommends DWR report on how WPF projects differ from other state riparian efforts (like the Heritage Fund).
Department of Water Resources Total Funds FY 2002 - FY 2007
$65,000,000
1/
$61,156,000
$62,663,100
$61,576,000
$52,000,000 $44,920,200 $39,000,000
$48,441,800
$38,368,200
$26,000,000
$13,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
Federal
FY 2007 JLBC
Other Appropriated
1/ The increase between FY 2004 and FY 2005 is due primarily to non-operating budget expenditures, particularly expenditures pursuant to the Nevada interstate water banking agreement.
Department of Education
FY 2007 Budget
Comparison of JLBC Baseline - Executive Budget K-12 Formula Estimates
--JLBC Baseline Adds $225 M GF in '07 for Statutory Formulas --Excludes Program Expansions or Reductions
$200
166 164
Millions of Dollars
$150 $100 $50 $0 ($50)
81 80
JLB C Exe c
41 22
(55)
($100)
(81)
Base Adjustment
New Kids
2% Infla tion
NAV Growth (incl TNT)
JLBC Baseline Has 3.25% Enrollment Growth in '07 Under New Consensus Approach
-- Newly-acquired UA Econometric Model Projects 3.2% Growth -- JLBC Staff Projects 3.3% Growth -- Consensus Averages Two Forecasts
5.0 4.0 % Growth 3.0 2.0 1.0 0.0 2002 2003 2004 2005 2006 est 2007 est Fiscal Year
14-year average is 3.2%
Small Percentage Changes in Enrollment Growth Greatly Affect Costs
? ? ? ? ? ? Basic State Aid formula now costs about $5 billion State share is about $3.6 billion State pays all cost "at the margin" Over 1 million students now in public schools (FY 2007) 0.5% forecast error would cost about $25 million Enrollment based on 100 day count ? but districts have 3 years to finalize number
-- '07 Has Minimal Increases Based on Continuing '06 Provisions -- '08 Impact Could Be Much Higher
50
JTED's Funding Has Grown Significantly
? ?
?
JLBC would continue '05 session law caps. '05 law allows Pima County to create JTED - probably will wait until `08. Without permanent changes, Auditor General estimates added costs of $85 M.
45 40 35
$ in Millions
30 25 20 15 10 5 0 '0 1 '0 2 '0 3 '0 4 '0 5 '0 6
Fis c al Year
State JTED Aid
Achievement Testing Costs Are Affected by AIMS Retests
? New policy on university tuition waivers is linked to AIMS test scores ? More students are taking voluntary AIMS retests as a result, which increases program costs ? ADE requested $3.1 M for caseload growth and contract modifications ? JLBC baseline includes $290,000 for caseload increases only
Millions of Dollars
$100 $120 $20 $40 $60 $80 $0
1 0 5 .4
Full-Day K
9 0 .7
Teacher Pa y
5 .5 5 .5 9 5 .5
180 Day TSL
New Initiatives
Other Executive Budget Changes
Rollover Repayment
Executive Expands Full Day Kindergarten
? Kindergarten pupils currently count as 1/2 ADM ? For FY 2006, pupils in "80%+ free lunch" schools receive additional $38 M to fund FDK costs ? Governor expands FDK to all schools and adds $105 M for M&O ($143 M total) ? Assumes $4,300 total per pupil ? Basic State Aid cost would be $5,000 per pupil ? FDK would cost $60 M more under BSA formula
Executive Includes $91 M to Increase Teacher Salaries
? $5.7 M to bring 1,750 teachers up to $30K ? $40 M to increase base salary for all teachers ? Unclear how $30K minimum salary policy would be maintained in subsequent years ? $45 M for teacher salary increases to offset 1.7% retirement increase ? Executive also includes $1 M to plan expansion of Career Ladder to include all districts in FY08 ? Career Ladder expansion would cost roughly $87 M in FY08
Executive Includes Planning Monies for Other New Programs
? Small schools best practices ? Parent outreach and communication ? Math and science literacy ? Integrated technology ? $1 million ? $1 million ? $1 million ? $1 million
Department of Education Total Funds FY 2002 - FY 2007
$5,250,000,000 $4,807,804,200 $4,500,000,000 $3,649,674,900 $3,350,861,900
1/
$5,020,050,600 $4,406,471,400 $4,085,823,400
$3,750,000,000
$3,000,000,000
$2,250,000,000
$1,500,000,000
$750,000,000
$0 Actual FY 2002
GF
Actual FY 2003
Actual FY 2004
Actual FY 2005
Non-Appropriated
Es t. FY 2006
FY 2007 JLBC
Other Appropriated
Federal
1/ FY 2003 total includes $(191,293,800) GF reduction for the "K-12 Rollover."
Department of Corrections
Department of Corrections
JLBC Baseline Growth is $35 M in FY 2007
? JLBC baseline includes FY `07 increases of:
? $15 M to open 1,000 private beds. ? $4 M for population growth. ? $16 M to replace expiring federal $
? Open 3,000 private beds in '08 to address shortfall ? Executive adds pay and health care proposals ? Enhanced legislative oversight
? JLBC review of RFP to privatize Perryville ? More detailed budget structure
2
JLBC Bed Proposal
? In FY '07, JLBC and Executive both open 1,000 previously-authorized private beds.
? JLBC opens October '06 at $15.3 M ? Executive opens December '06 at $11.7 M
? Executive adds 900 provisional beds
? Opens July '06 at $18.3 M ? Temporary beds intended for state overflow
? JLBC recommends 3,000 private beds in FY '08
? $11.2 M appropriation in FY '08 ? Executive does not provide '08 bed plan
3
JLBC & Executive Both Add 1,000 Private Beds for Total of 4,100
Executive adds another 900 provisional beds in '07 JLBC adds another 3,000 private beds in '08 State Beds 25,845 ? 80% Private Beds 4,100 ? 12.8% Provisional Beds 2,064 ? 6.4% Total Beds 32,145 ? 100% County Jail Beds 136 ? 0.4%
4
Bed Shortfall
? Projected bed deficit at end of FY 2007:
? JLBC reduces shortfall to (1,390) in '08 ? Executive reduces shortfall to (2,290) in '07
3,500 3,000 2,500 2,000 1,500 1,000 500 0 ???
J une '04 J une '05 J une '06 J LB C '07 Ex e c utiv e '0 7 J LB C '08 Ex e c utiv e '0 8
2,990 2,551
3,190
2,290
1,390 924
5
Enhanced Oversight of Bed Issues
3,000 Private Beds and Perryville Privatization
? Since FY `03, footnote required privatization of female inmate population
? Department has not complied
? JLBC converts footnote to session law
? Require privatization of operation of Perryville
? Require JLBC review of RFP and contracts ? $4 M for population growth to revert if contract not executed by March 31, 2007
6
Officer Pay
Executive Recommends $39 M for total of $278 M ? With newly enacted Chapter 1 pay raise, CO II salary increases from $27,400 to $29,700 ($1,650 and 2.5%) ? Executive proposal increases salary to $33,000 ? Includes step increases of 4% each year
? Department says no added cost in future
? Eliminates geographical and retention stipends
? Estimated $16.5 M in FY 2007 converted to base pay ? Means higher raises for those not receiving stipends
? Results in 10% funded vacancy rate ? Awaiting salary calculations to verify cost of plan
7
Health Care
Executive Recommends $30.4 M in FY '07 and $26.6 M Supplemental in FY '06
? Health care costs in FY 2005 were $101.5 M, budgeted for $86.3 M
? Department covered $15.2 M difference with vacancy savings and other available funding sources
? Department projects 13% increase in FY 2006
? Awaiting more specifics on cost estimate
? Only 3% increase projected in '07 ($114.8 M to $118.5 M)
? If supplemental approved, $15.2 M freed-up within budget to expend elsewhere
? Current department response lacks details for FY '07
8
Maricopa Health Care Contract
? More intensive inmate medical cases served through private contracts ? Maricopa Health Care District currently holds contract for services in Maricopa County
? Based on discount, varies each year
? New contract went out to bid in April, 2005
? Not yet awarded ? District was only responder on first RFP issued ? Another RFP released after ADC deemed district submission unresponsive ? 2 bidders on 2nd RFP
9
JLBC Recommended Enhanced Budgetary Oversight
? Difficult to track department expenses with current structure ? Current structure obscures major areas of expenditure ? As a result, JLBC recommends new line item budget structure
? Add more budget line items, including lines for each facility
? Would facilitate identifying department shortfalls ? Would facilitate complex-by-complex comparisons ? Provides flexibility for clarifying legislative intent with regard to funding
10
Budget Structure Comparison
Current Salaries Employee Benefits Other Operating Expenses Proposed 10 prison complex line items Administration Community Corrections Health Care Provisional Beds County Jail Beds Overtime Private Prisons
11
Overtime Private Prisons
JLBC Proposed Budget Structure
FY 2007
Administration Community Corrections State Prisons Douglas Eyman Florenc e Lewis Perryville Phoenix Safford Tucson Winslow Yuma County Jail Beds Compensatory/Overtime Private Prisons Provisional Beds Health Care 1 Total 775,874,800 $58,717,300 10,188,400 572,951,500 38,397,800 95,850,300 85,026,200 86,965,000 49,794,600 31,492,800 26,957,400 82,944,300 35,493,700 40,029,400 2,518,500 24,688,100 77,702,800 29,108,200
1. Cost is $88 M, which is contained within other line items. JLBC is awaiting information to make adjustments to other lines.
12
JLBC ? Executive Comparison
General Fund Increases for Prison Beds and Other Issues
122.2 120 110 100 90 $ in Millions 80 70 60 50 40 30 20 10 0 0.0 Ne w 2nd SS 1,000 Provis ional Private Beds Be ds VOI/TIS Backfill 18.3 15.3 11.7 15.6 17.4 4.2 0.0 0.0 Office r Pay Package 0 .0 Inmate He alth Care 0 5.4 Total Incre as e 39.0 30.4 35.1
Population Growth
Othe r
JLBC
OSPB
13
Departme nt of Corrections Total Funds FY 2002 - FY 2007
$900,000,000 $816,789,200 $800,000,000 $700,000,000 $623,045,500 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0 Actual FY 2002 Actual FY 2003 Actual FY 2004 Actual FY 2005 Es timate d FY 2006
Federal
$834,303,000
$755,020,000 $692,724,500 $626,555,800
FY 2007 JLBC
GF
Other Appropriated
Non-Appropriated
14
