Revenues
An annual time series of state and local government revenues produced by the U.S. Census Bureau goes back to fiscal year 1961, but the focus in Arizona Indicators is the period since the early 1990s. The data are reported for fiscal years; for example, fiscal year 2010 ran from July 1, 2009 through June 30, 2010. The latest data typically lag two-to-three years behind.
The government finance data are collected from a census of all governments in years ending in ‘2’ and ‘7.’ In the other years, information is collected from each state government and from a sample of local governments. Only “general” revenues of state and local governments are collected; publicly run utilities, liquor stores, and insurance trust programs, such as employee retirement systems, are excluded.
In order to compare revenues over time, the effects of inflation, population growth, and per capita economic growth must be considered. Reporting revenues per $1,000 of personal income automatically adjusts for all three factors. The fiscal year average (the average of the four quarters of the fiscal year) of personal income is used to standardize the public finance data.
Revenues are reported by the U.S. Department of Commerce, Census Bureau http://www.census.gov/govs/estimate/. Personal income is estimated quarterly by state by the U. S. Department of Commerce, Bureau of Economic Analysis http://www.bea.gov/regional/index.htm.
The Census Bureau did not release state and local government finance data by state for fiscal years 2001 and 2003; interpolated figures for these years are shown in the charts. In noncensus years, the Census Bureau data are subject to sampling error. In all years, the data are subject to misreporting by state and local governments and to misunderstandings between the Census Bureau and state and local governments regarding the differing accounting systems used.
Some of the inputs to the calculation of personal income by state are estimated. Personal income estimates are subject to revision. Personal income is a comprehensive measure of the economy but has conceptual limitations when employed to adjust public revenues and expenditures.
Revenues Per $1,000 of Personal Income, Arizona State and Local Governments
Visualization Notes:
Relative to personal income, revenues raised directly by state and local governments in Arizona (own-source revenues) fell 12 percent between fiscal year (FY) 1992 and FY 2012 (the latest data). Most of this decline resulted from the multiple state government tax cuts passed since the early 1990s. However, even relative to personal income, revenues are cyclical, higher during economic booms and lower during recessions. The real-estate-driven economic boom in the mid-2000s temporarily pushed revenues higher while revenues in FYs 2009 and 2010 were adversely affected by the long and deep recession. Revenues per $1,000 of personal income were hardly higher in FYs 2011 and 2012 than the FY 2010 trough.
Intergovernmental revenues from the federal government represent the difference between total revenues and own-source revenues. Per $1,000 of personal income, intergovernmental revenues have increased over time, but very large increases in FYs 2009 and 2010 were temporary, resulting from the federal government’s economic stimulus program. The FY 2011 and 2012 figures were lower than in the prior year.
Revenues Per $1,000 of Personal Income, Rank, Arizona State and Local Governments
Visualization Notes:
In the early 1990s, Arizona ranked in the middle of the states on total state and local government revenue relative to personal income, with own-source revenues higher than the median state but intergovernmental revenues lower than the median state. Arizona’s ranks were considerably different in fiscal year (FY) 2012, with intergovernmental revenues at the median of the states and own-source revenues considerably below average (12th lowest in FY 2012), relative to personal income. The decline in own-source revenues largely results from a long series of state government tax reductions that began to be implemented in the mid-1990s.
Revenues Per $1,000 of Personal Income as a Percentage of the National Average, Arizona State and Local Governments
Visualization Notes:
Own-source state and local government revenues relative to the size of the economy were slightly above the national average in the early 1990s in Arizona, but fell below average in the mid-1990s and reached 13 percent below average in fiscal year (FY) 2010. In FY 2011, the figure was up from the cyclical trough to 8 percent below average. Relative to personal income, intergovernmental revenues from the federal government have climbed over time. The much higher figures in fiscal years 2009 and 2010 were temporary, resulting from the federal government’s economic stimulus program, but the FY 2012 figure still was higher relative to the national average than any figure prior to FY 2009.
Data Source
Revenues are reported by the U.S. Department of Commerce, Census Bureau http://www.census.gov/govs/estimate/. Personal income is estimated quarterly by state by the U. S. Department of Commerce, Bureau of Economic Analysis http://www.bea.gov/regional/index.htm.
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