Purpose

Makes supplemental appropriations for FY 2001-2002 to address Title XIX and Department of Education caseload growth. Reduces state general fund operating expenses and transfers fund monies from various other funds to the state general fund in order to reconcile an anticipated FY 2001-2002 state general fund shortfall.

Background

The FY 2001-2002 state general fund budget, as enacted during the Forty-fifth Legislature, First Regular Session, assumed an ending balance of $103 million in FY 2000-2001 and approximately $6.99 billion in base revenues for FY 2001-2002. Due to declining revenues in the ensuing months, the Forty-fifth Legislature convened the Second Special Session during the Fall of 2001 and enacted a revised FY 2001-2002 budget to reconcile an estimated $675 million state general fund shortfall.

Subsequent to the Second Special Session, the Joint Legislative Budget Committee and Office of Strategic Planning and Budgeting have revised their revenue forecasts as well as the need for supplemental appropriations to address caseload growth in Title XIX and the Department of Education populations. At this point, a minimum shortfall of approximately $160 million has been identified in the FY 2001-2002 state general fund budget as revised by the Second Special Session.

The strike everything amendment to S.B. 1060 addresses caseload growth, and reduces general fund operating expenses and transfers monies from various other funds to the state general fund in order to reconcile the minimum anticipated FY 2001-2002 shortfall.

Provisions

Fund Transfers

1. Increases, from $30 million to $39 million, the FY 2001-2002 transfer from the corrections fund to the state general fund.

2. Increases, from $1 million to $3 million, the FY 2001-2002 transfer from the state lake improvement fund to the state general fund.

3. Increases, by $25 million, the FY 2001-2002 transfer from the building renewal fund to the state general fund.

4. Increases, by $10 million, the FY 2001-2002 transfer from the new school facilities fund to the state general fund.

5. Increases, by $700,000, the FY 2001-2002 transfer from the Arizona clean air fund to the state general fund.

6. Eliminates the local transportation assistance fund – vehicle license tax transfer to the state general fund in the amount of $3.5 million for FY 2001-2002. (Omnibus reconciliation provisions reinstate this allocation).

7. Transfers $15 million from the Arizona job training fund to the state general fund for FY 2001-2002.

8. Increases, by approximately $44 million, the FY 2001-2002 transfer from the budget stabilization fund to the state general fund.

Arizona Health Care Cost Containment System

9. Eliminates, for FY 2001-2002, the $950,000 finger imaging line item appropriation from the state general fund.

10. Increases, by $10 million, tobacco tax medically needy account support for Arizona Health Care Cost Containment System (AHCCCS) caseload growth for FY 2001-2002.

11. Increases, by approximately $5 million, state general fund support for AHCCCS caseload growth for FY 2001-2002.

Department of Economic Security

12. Shifts approximately $1.25 million in expenditures from state general fund support to the long term care system fund for FY 2001-2002.

13. Reduces, by approximately $3.0 million, state general fund support for the capitation rate for the developmental disabilities long term care program for FY 2001-2002.

Miscellaneous

14. Eliminates state general fund support for the arts endowment fund in the amount of $500,000 for FY 2001-2002.

15. Increases assistance to schools by $17.37 million and decreases funding from the permanent state school fund by $2.63 million, for a net state general fund cost of $20 million for FY 2001- 2002.

16. Increases, by approximately $3.7 million, state general fund support for Title XIX behavioral health services for FY 2001-2002.

17. Shifts, from state general fund support to the highway user revenue fund (HURF), $10 million in funding for the Department of Public Safety for FY 2001-2002.

18. Makes technical and conforming changes.

19. Becomes effective on signature of the Governor.

JE/DJ/ac