ARIZONA STATE SENATE
Phoenix, Arizona
FINAL
REVISED
FACT SHEET FOR H.B. 2637/S.B.
1584
conditional appropriations;
taxation; revenue forecasts.
Purpose
Triggers up to $88 million
in expenditures and tax cuts over the biennium, conditional upon state general
fund revenues exceeding the Joint Legislative Budget Committee (JLBC) forecast
by specified amounts.
Background
JLBC forecasts FY 2000-2001
state general fund revenue to be approximately $6.3 billion and the FY 2001-2002
revenue to be approximately $6.6 billion, excluding the beginning balances and
revenues collected pursuant to the education sales tax. These revenues are budgeted over the
biennium for state operations and capital expenditures. S.B. 1584 makes conditional expenditures and
tax cuts, if actual revenues exceed these forecasts by specific amounts. However, before such expenditures and tax
cuts may be triggered, the legislation requires a carry forward of $50 million
to be reserved.
S.B. 1584 contains three
levels of triggers. The first level is
authorized if revenues exceed the forecast by at least $79.7 million. If the FY 2000-2001 forecast is exceeded by
this amount, the expenditures and tax cuts specified in the legislation will be
triggered for both FY 2001-2002 and FY 2002-2003. If the FY 2000-2001 forecast is not exceeded by at least $79.7
million, but the FY 2001-2002 forecast is, then the expenditures and tax cuts
will be triggered for FY 2002-2003 only.
This same process applies for the second level of triggers, which is
authorized if the forecast is exceeded by at least $104.1 million. The third level of triggers, which consists
of $34 million of tax cuts, is triggered in FY 2002-2003 only, if revenues
exceed the forecast by at least $138.1 million in either fiscal year.
In total, S.B. 1584 triggers
up to $23.1 million in expenditures and $6.57 million in tax cuts under level
one, up to an additional $17.7 million in expenditures and $6.57 million in tax
cuts under level two and an additional $34 million in tax cuts under level
three.
1. States that state general fund revenues for FY 2000-2001 are forecasted at $6,296,122,700 and state general fund revenues for FY 2001-2002 are forecasted at $6,619,874,000, excluding beginning balances and education sales tax revenue.
2. Allows the JLBC Staff Director and the Governor’s Office of Strategic Planning and Budgeting to adjust the revenue forecast to reflect changes in disproportionate share revenue resulting from Proposition 204.
3. Triggers expenditures and tax cuts in the following amounts for the following items in the fiscal years specified, if actual revenues exceed the FY 2000-2001 forecast by at least $79,708,400.
Expenditure/Tax Cut
|
FY 2002 |
FY 2003 |
|
Government
Information Technology Agency |
|
|
|
No wrong door funding |
$3,134,700
|
$ 731,500 |
|
Department
of Revenue |
|
|
|
Transaction privilege tax database |
$1,685,000
|
$1,000,000
|
|
Department
of Commerce |
|
|
|
High technology cluster funding |
$ 500,000 |
$ 500,000 |
|
Small community growing smarter |
$ 206,500 |
$ 202,400 |
|
Arizona
State University |
|
|
|
East campus - Collections offset |
$ 36,000 |
$1,322,800
|
|
West campus - Collections offset |
$ 219,900 |
$ 404,900 |
|
Attorney
General |
|
|
|
Additional salary adjustments |
$ 869,100 |
$ 869,100 |
|
Department
of Education |
|
|
|
AIMS dropout prevention |
$ 500,000 |
$ 500,000 |
|
Department
of Environmental Quality |
|
|
|
Arizona-Mexico hazardous and solid waste issues |
$ 129,100 |
$ 87,800 |
|
Department
of Economic Security |
|
|
|
Extra
provider rate increase for developmental disability providers |
$ 500,000 |
$ 500,000 |
|
Full year of new child protective services and adoption
staffing |
$ 761,400 |
$0 |
|
Adult home/community services increase |
$1,800,000 |
$1,800,000 |
|
New
developmental disability automation funding |
$1,876,100 |
$2,002,100 |
|
Department
of Water resources |
|
|
|
Rural water studies |
$ 500,000 |
$ 500,000 |
|
Tax
Reduction |
$0 |
$6,570,000 |
|
Individual Income Tax Rate Brackets: |
|
|
|
Single Filer $0 - $10,000 |
n/a |
2.84% |
|
Joint Filer $0 - $20,000 |
n/a |
2.84% |
4. Triggers expenditures and tax cuts in the following amounts for the following items in FY 2002-2003, if actual revenues do not exceed the FY 2000-2001 forecast by at least $79,708,400, but do exceed the FY 2001-2002 forecast by $73,512,300:
Expenditure/Tax Cut
|
FY2003
|
|
Government
Information Technology Agency |
|
|
No wrong door funding |
$3,866,200
|
|
Department
of Revenue |
|
|
Transaction privilege tax database |
$2,685,000
|
|
Department
of Commerce |
|
|
High technology cluster funding |
$ 500,000 |
|
Small community growing smarter |
$ 206,500 |
|
Arizona
State University |
|
|
East campus – Collections offsets |
$1,322,800 |
|
West campus – Collections offsets |
$ 404,900 |
|
Attorney
General |
|
|
Additional salary adjustments |
$ 869,100 |
|
Department
of Education |
|
|
AIMS dropout prevention |
$ 500,000 |
|
Department
of Environmental Quality |
|
|
Arizona-Mexico hazardous and solid waste issues |
$ 129,100 |
|
Department
of Economic Security |
|
|
Extra provider rate increase for
developmental disability providers |
$ 500,000 |
|
Full year of new child protective services and adoption staffing |
$0 |
|
Adult home/community services increase |
$1,800,000 |
|
New
developmental disability automation funding |
$3,878,200
|
|
Department
of Water Resources |
|
|
Rural water studies |
$ 500,000 |
|
Tax
Reduction |
$6,570,000 |
|
Individual Income Tax Rate Brackets: |
|
|
Single Filer $0 - $10,000 |
2.84% |
|
Joint Filer $0 - $20,000 |
2.84% |
5. Triggers, in addition to the expenditures and tax cuts triggered under level one, expenditures and tax cuts in the following amounts for the following items in the fiscal years specified, if actual revenues exceed the FY 2000-2001 forecast by at least $104,131,000:
|
Expenditure/Tax Cut |
FY 2002 |
FY 2003 |
|
State Land
Department |
|
|
|
Master planning
and engineering on urban state trust land |
$ 220,000 |
$ 220,000 |
|
Federal condemnation of state trust
land |
$ 150,000 |
$ 100,000 |
|
Capital Outlay |
|
|
|
DOA building renewal at 75% rather than 50% |
$3,104,300 |
$3,324,900 |
|
Arizona State
University |
|
|
|
Main campus – new facilities |
$ 201,500 |
$ 532,300 |
|
East campus – new facilities |
$ 327,300 |
$1,437,600 |
University of Arizona
|
|
|
|
Main campus – new facilities |
$ 450,100 |
$1,797,400 |
|
Main campus – Collections offset |
$0 |
$ 604,200 |
Northern Arizona University
|
|
|
|
Collections offset |
$1,843,600 |
$1,839,400 |
|
Yuma science complex |
$0 |
$ 220,000 |
|
Department of
Public Safety |
|
|
|
Fingerprinting board staff |
$ 178,700 |
$ 141,300 |
|
Sex offender notification |
$ 160,000 |
$ 160,000 |
|
Radio infrastructure replacement |
$0 |
$ 840,000 |
|
Tax Reduction |
$0 |
$6,570,000 |
|
Individual Income Tax Rate Brackets: |
|
|
|
Single Filer $0 - $10,000 |
n/a |
2.81% |
|
Joint Filer $0 - $20,000 |
n/a |
2.81% |
6. Triggers, in addition to the expenditures and tax cuts triggered under level one, expenditures and tax cuts in the following amounts for the following items in FY 2002-2003, if actual revenues do not exceed the FY 2000-2001 forecast by at least $104,131,000, but do exceed the FY 2001-2002 forecast by $91,386,800:
Expenditure/Tax Cut
|
FY2003
|
|
State
Land Department |
|
|
Masterplanning
and engineering on urban state trust land |
$ 220,000 |
|
Federal condemnation of state trust
land |
$ 150,000 |
|
Capital
Outlay |
|
|
DOA building renewal at 75% rather than 50% |
$3,112,900
|
|
Arizona State
University |
|
|
Main campus – new facilities |
$ 532,300 |
|
East campus – new facilities |
$1,437,600
|
University of Arizona
|
|
|
Main campus – new facilities |
$1,797,400 |
|
Main campus – Collections offset |
$ 604,200 |
Northern Arizona University
|
|
|
Collections offset |
$1,839,400 |
|
Yuma science complex |
$ 220,000 |
|
Department
of Public Safety |
|
|
Fingerprinting board staff |
$ 178,700 |
|
Sex offender notification |
$ 160,000 |
|
Radio
infrastructure replacement |
$ 840,000 |
|
Tax Reduction |
$6,570,000 |
|
Individual
Income Tax Rate Brackets: |
|
|
Single
Filer |
2.81% |
|
Joint Filer |
2.81% |
7. Triggers, in addition to the expenditures and tax cuts triggered under levels one and two, $34 million in tax cuts in FY 2002-2003, if actual revenues exceed the forecasted amounts in FY 2000-2001 by at least $138,131,000 or in FY 2001-2002 by $125,386,800:
|
Tax Cut |
FY 2003 |
|
Individual Income Tax Rate Brackets: |
|
|
Single
Filer |
2.81% |
|
Joint
Filer |
2.81% |
|
Corporate Tax Rate |
6.8% |
|
Corporate Sales Factor |
|
|
Property |
|
|
Option A |
25% |
|
Option B |
17.5% |
|
Payroll |
|
|
Option A |
25% |
|
Option B |
17.5% |
|
Sales |
|
|
Option A |
50% |
|
Option B |
65% |
8. Requires the Department of Revenue (DOR) to bill local jurisdictions for 50 percent of the cost of the transaction privilege tax (TPT) database ($2.7 million).
9. Directs the additional salary adjustment for the Attorney General’s office to assistant attorney general salaries and specifies agency allocation.
10. Permits the Arizona Board of Regents (ABOR), on behalf of Northern Arizona University (NAU), to issue revenue bonds in one or more series, but not exceeding in the aggregate $6 million more than any outstanding bonding authority of NAU.
11. Requires ABOR, before issuing the bonds, to submit a comprehensive multiyear bonding plan to the Joint Committee on Capital Review (JCCR) and the Governor.
12. Specifies items to be included in the plan and requires JCCR to solicit comment on the plan from the Governor’s office.
13. Prohibits ABOR from issuing revenue bonds for any project not included in the plan and not approved by the JCCR.
14. Requires monies appropriated to the Department of Public Safety for the Board of Fingerprinting to revert to the state general fund if legislation is enacted permitting the Department to increase fingerprinting fees.
15. Establishes reporting requirements relating to the following: (a) cost allocation for the no wrong door program; (b) the DOR’s expenditure plan for the TPT database; and (c) the allocation by agency of assistant attorney general salary increases.
16. Requires the Director of JLBC and the Director of the Office of Strategic Planning and Budgeting (OSPB) to jointly notify the Governor, President of the Senate and Speaker of the House of Representatives by September 1, 2001 on whether the FY 2000-2001 forecast has been exceeded. Requires the same notification by September 1, 2002 for the FY 2001-2002 forecast.
17. Requires the Governor to issue a public notice stating the amounts triggered under this act, if any, by September 15 of 2001 and 2002.
18. Increases, retroactive to taxable years starting December 31, 2000, the optional standard deduction for both singly and jointly filer taxpayers. Specifically, the standard deduction will increase for taxpayers filing singly from $3,600 to $4,050 and for taxpayers filing jointly from $7,200 to $8,100.
19. Contains conditional enactment provisions consistent with the triggers.
20. Contains a retroactive effective date to taxable years for the standard deduction reductions.
Amendments Adopted by Committee
1. Increases, retroactive to taxable years starting December 31, 2000, the optional standard deduction for both singly or jointly filer taxpayers. Specifically, the standard deduction will increase for taxpayers filing singly from $3,600 to $4,050 and for taxpayers filing jointly from $7,200 to $8,100.
2. Allows the Director of JLBC and the Governor’s Office of Strategic Planning and Budgeting to adjust revenue forecasts to reflect changes in disproportionate share revenue resulting from Proposition 204.
3. Changes trigger amounts based on revised JLBC estimates.
4. Changes tax reduction amounts from $7.5 million to $6.57 million for the individual income tax rate reduction, only if certain triggers are met.
5. Reduces the capital outlay appropriations for the Department of Administration’s building renewal, if certain triggers are met.
6. Makes technical and conforming changes.
Senate Action House Action
FIN 4/11/01 DPA 6-0-2-0 APPROP 4/11/01 DPA 13-3-0-0
3rd Read 4/12/01 29-1-0-0 3rd Read 4/11/01 52-5-3-0
(H.B. 2637 substituted for S.B. 1584 on 3rd read)
Signed by Governor 4/24/01
Chapter 235
Prepared by Senate Staff
August 1, 2001