The bottom appears within sight. The latest state financial report notes that we had our first single-digit drop in year-to-year revenues since September 2008. This is good news, in the I’ve-been-down-so-long-that-it-looks-like-up-to-me sense.
A few highlights noted by the JLBC staff:
The January revenue results broke several long term trends. General Fund revenue collections were $1.44 billion. Excluding one-time proceeds, collections were (2)% less than last January. This was the first single digit year-over- year loss since September 2008.
In addition, January General Fund revenues were $14.2 million above the forecast, which marks the first time since March 2007 that revenue collections exceeded
the projection.
Beginning with this February report, we are comparing actual revenue collections to the Baseline consensus forecast published last month. The Baseline forecasts a revenue decline of (10.8)%, compared to 0.9% growth in the original FY 2010 budget. Since the revised forecast is $(880) million less than the original budget for the year, it will be easier to meet or exceed the forecast going forward.
January 2010 General Fund spending was $972.7 million. January expenditures were higher than the prior year due to the late payment of the Universities December allocation. Year-to-date spending is ($176) million less than the prior year.
In January, state revenues outpaced the rate of spending due primarily to one-time transfers and sale/lease-back proceeds. General Fund revenues exceeded expenditures by $468
million for the month. Fiscal year-to-date, however, General Fund revenues are $4.80 billion compared to spending of $6.21 billion, for a 6-month deficit of $(1.41) billion.Daily borrowing has increased since the end of January when a one-time influx from the sale of state buildings temporarily eliminated the need for borrowing. Part of the increase in borrowing is due to maintaining a $300 million balance with the servicing bank.
The state pays its bills out of the operating fund balance, which consists of General Fund and certain dedicated funds. To cover last year’s $(480) million shortfall and this year’s $(1.4) billion shortfall in the General Fund, the state has already effectively borrowed all of the state’s approximately $1.6 billion in dedicated funds in the operating balance. Having exhausted that source, the state literally borrowed as much as $572 million in February by issuing Treasurer Warrant Notes (TWNs). The average daily borrowing was $377 million. Year to date, the highest daily borrowing was $905 million.
We’ll take a closer look later.
This article appears in Feb 25 – Mar 3, 2010.
I’ve got an idea. How about the State of Arizona Developes the proposed Rosemont mine in the Santa Rita Mountains. That way, all of the money and profits generated stay here in our home state and recirculate. After all, the resources do belong to WE THE PEOPLE.
If I remember correctly, the Magma copper mine was sold to foreign interests ( I know, it was originally owned by Canadians [ and Canadians are who are looking to develop the Rosemont property] but Magma was purchased as part of a deal that looked only to obtain South American mineral interests. The point is………… that Magma was shut down, while destroying a whole community, and obliterating thousands of good paying, high benefit jobs;
just in time to miss out on 10 years of record high copper prices!!!!
And……, and, the most pertinent fact is that there still existed 50 ( yes 50 ) years of ore reserves in that property, that can never be reached again now that this mine has been allowed to flood. Believe me, it was crazy dangerous the first time. Now, its impossible.
But, if it hadn’t been a multi-national corporation making this decision, those thousands of good paying Arizona jobs would still exist.
If you have read all of this, thank you for listening to me vent, and I am going to stop now, before my head explodes.
Robert Alexander Dumas