Arizona Indicators

General Fund Sustains Losses for Third Consecutive Year

General fund revenue predominantly comes from taxes, especially the sales tax and individual income tax, with small contributions from non-tax sources, including fees and the state lottery.

According to the Arizona Joint Legislative Budget Committee, FY 2010 marks an unprecedented 3^rd consecutive year of General Fund losses with base revenues down 10.3% during the course of FY 2010. Base sales tax revenues were down 10.1% compared to FY 2009, and total individual income tax collections were 5.9% below last fiscal year.

Public finance — taxes and other revenues collected by government and the expenditure of those revenues — has become a prominent public issue due to the need to resolve the deficits that afflict state government and most county and municipal governments in Arizona.

The deficits in part are the result of the severe and prolonged economic downturn: revenues will grow as the economy recovers from the current recession. However, a structural deficit also was created over the last 15 years as taxes were permanently reduced during years of temporarily high revenues without a commensurate decrease in expenditures.