Arizona

State Budget Sources

Arizona received overall B grades in transparency, legacy costs, and budget forecasting—three of the five categories evaluated by the Volcker Alliance for fiscal 2015 through 2017. In reserve funds, the state earned straight A’s, but its use of one-time actions to balance revenues against expenditures resulted in C marks in budget maneuvers for each year.

Arizona’s grade in budget forecasting might have been higher if the state had adopted consensus revenue estimating. This technique may not make predictions more accurate but can provide the state with a single number on which to build a spending plan. In contrast to a single estimate built on inputs from multiple sources, the Governor’s Office of Strategic Planning and Budgeting and the Joint Legislative Budget Committee produce revenue estimates independently. Moreover, the governor and legislature are not bound by their forecasts and may use other estimates in the budget, according to the committee’s Arizona Budget Process report.

The C grades for budget maneuvers from fiscal 2015 through 2017 relate to deferring recurring expenditures and shifting costs and revenues. For example, in 2015, Arizona moved to counties part of its commitment to pay for institutionalization costs for certain individuals. This was one of several adjustments of expenditures it made between levels of government that year.

Download Printable State Report Card

To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2017 Volcker Alliance report, Truth and Integrity in State Budgeting: What Is the Reality? which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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