DPS Budget Presentation

John Arnold-DirectorGovernor’s Office of Strategic Planning and Budgeting

December 15, 2010

2

General Fund Ongoing Revenue and Expenditures before Solutions

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010Est.

FY 2011Est.

FY 2012Est.

FY 2013Est.

FY 2014Est.

$ in

mil

lio

ns

Expenditures with ARRA & Rollover GF Expenditures GF Revenue

Assumptions: Revenue: Ongoing revenue does not include one time items such as fund transfer, asset sales, etc. Growth rates assumptions: FY10: -9.2%, FY11:7%, FY12 and 7%. Expenditure: Ongoing expenditure does not include rollover or ARRA. FY10 and FY11 estimated Expenditure from most current S&U, FY12 and beyond assuming 7% growth.

3

FY 2011 $600-720 million

FY 2012 $1.3-1.5 billion

4

5

AHCCCS All TXIX Capitation Member MonthsActuals Only

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

Jan-0

2

Jul-0

2

Jan-0

3

Jul-0

3

Jan-0

4

Jul-0

4

Jan-0

5

Jul-0

5

Jan-0

6

Jul-0

6

Jan-0

7

Jul-0

7

Jan-0

8

Jul-0

8

Jan-0

9

Jul-0

9

Jan-1

0

AHCCCS added approximately 167,000 members in FY 2010. OSPB projects they will add 54,000 in FY 2011

6

7

8

Budget Unit

Education (K-12)

Medicaid

Universities

Prisons

Debt Service

Other

TOTAL

(Millions)

$ 3,491.2

2,821.7

890.2

1,005.7

188.8

923.6

$ 9,321.3

Office of Governor Janice K. Brewer9

Medicaid numbers assume regular FMAP

10

On-Going General Fund Expenditures FY 2007 FY 2011 % ChangeEducation (K-12) 4,020.1$ 3,491.2$ -13.2%Medicaid 1,731.0$ 2,821.7$ 63.0%Universities 960.7$ 890.2$ -7.3%Corrections 896.8$ 1,005.7$ 12.1%Debt Service 108.7$ 188.8$ 73.8%Other Agencies 1,803.7$ 923.6$ -48.8%Total 9,520.9$ 9,321.3$ -2.1%*Medicaid assumes regular FMAP

FY 2008 FY 2011

Comparison of Appropriated Funding

In response to the state’s fiscal crisis, Governor Brewer and the Legislature have cut $2.2 billion in government spending, including the following:

Reduced personnel expenditures by 22 percent Reduced K-12 per pupil support by 18 percent Reduced University per pupil funding by 25 percent Reduced per capita correctional spending by 5.5

percent Reduced child care enrollees by 40 percent (20,000

children)

14

Budget Reductions (continued)

Reduced the number of families on cash assistance by 47 percent (16,644 families)

Reduced state benefits for the SMI population

Provided no inflation for health care providers for the last three years

Eliminated most non federally mandated Medicaid services

15

Office of Governor Janice K. Brewer16

Office of Governor Janice K. Brewer17

Office of Governor Janice K. Brewer18

In addition to spending reductions, Arizona has also:

Borrowed $2.1 billion Deferred $1.5 billion in current year

payments Raised taxes by 14.5 percent ($900

million)

19

In FY 2014• Prop 100 Sales Tax Expires• Federal Health Care Reform fully

implemented

Early Projection - $2 billion deficit

Office of Governor Janice K. Brewer20