Summary Book 2021

State of Arizona
Executive Budget
SUMMARY
FISCAL YEAR 2022
Douglas A. Ducey
GOVERNOR
JANUARY 2021
Table of Contents
Budget Message
Budget Summary .................................................................................................................................. 3
Budget in a Flash .................................................................................................................................. 8
General Fund Sources and Uses.................................................................................................. 11
The Economy....................................................................................................................................... 12
General Fund Revenue Summary ............................................................................................... 19
Other Fund Revenue Summary ................................................................................................... 20
Fiscal Response to the COVIC-19 Pandemic.......................................................................... 21
Education .............................................................................................................................................. 24
Health and Welfare ........................................................................................................................... 32
Public Safety ........................................................................................................................................ 38
Natural Resources ............................................................................................................................. 42
Government That Works ................................................................................................................ 46
Budget Summary
FY 2020 Executive Budget – All Funds...................................................................................... 50
General Fund Operating Budgets Summary .......................................................................... 53
Other Appropriated Funds Operating Budgets Summary ............................................... 55
Other
Resources.............................................................................................................................................. 65
Acknowledgement ............................................................................................................................ 66
The Budget Summary
The FY 2022 Executive Budget moves the state forward with immediate attention to addressing the
health and educational effects of the COVID-19 pandemic, while looking beyond to a recovery that
displays the compassion, innovation, and resilience of Arizonans.
The Executive’s carefully calibrated financial priorities during

“Despite the pain and hardships we’ve experienced this year,
the pandemic have reflected the appropriate role of government:
we’ve seen hope triumph over darkness.”
Protect the lives and livelihoods of Arizonans from the
Gov. Doug Ducey
ravages of COVID-19.
Fulfill, ahead of schedule, the promise to restore the last
A rizonans are resilient. The year 2020 began with the “Arizona
Way’’ on full display: leading the nation in poverty reduction,
with over 175,000 Arizonans pulling themselves out of poverty;
Great Recession-era cut to the K-12 funding formula.
To address the serious learning loss from COVID-19 and to
help make up lost ground ahead of the 2021-2022 school
ranking second in job growth, with more jobs than people to fill
year, provide significant resources for high-impact, results-
them; ranking fourth for average weekly wage growth; and rank-
oriented intervention and acceleration programming.
ing sixth in export growth.
Then came the COVID-19 pandemic, triggering unprece- Raise the level of public safety by fully funding State
dented loss and economic hardship. Trooper overtime and recruiting more individuals to join
That shock was followed by a steady rebound. As the year the State’s police force.
progressed through an unfamiliar environment, Arizona citizens, Improve prison environments and equipment that promote
companies, not-for-profits, and State and local governments staff and inmate safety and offer more opportunities for
responded with a focus on creating and seizing opportunity. inmate rehabilitation.
Through it all, Arizona continued to be a destination for busi- Provide more resources and pursue more aggressive forest
ness and families, and the state’s population growth rate management strategies in order to fight wildfires and
propelled Arizona into third place nationally. reduce future fire risk.
THE ROLE OF STATE GOVERNMENT Keep Arizona known as a beacon of low taxes and reason-
able regulation to attract businesses and families fleeing
From the standpoint of State fiscal management, the concept
oppressive, big-government states.
is simple:
Keep taxes straightforward and low.
FY 2021 Budget Forecast
Eliminate government red tape and unnecessary regula-
tions. The enacted FY 2021 budget funded mainly baseline formula
programs and actually resulted in a year-over-year spending
• Adhere to a fiscal discipline that keeps the cost of State
decline compared to the FY 2020 budget.
government in a sustainable condition.
The State’s impressive revenue performance, along with
Far ahead of most predictions, Arizona has emerged from the restrained spending, has resulted in the State maintaining struc-
pandemic stronger than ever. By following common-sense public tural budget balance despite the most severe economic down-
health guidance to keep people safe and employed, the state turn in American history.
remains well positioned as a top national performer. The Executive forecasts a current fiscal year structural surplus
Since the low point of the pandemic-induced national reces- of $352 million and an ending cash balance of $625 million.
sion in the second quarter of 2020, Arizona has achieved the
third-strongest economic performance of any state, and the FY 2022 Executive Budget
nation’s largest quarterly gain in homeownership.
A pace-setting recovery requires a state government that The FY 2022 Executive Budget remains focused on areas of
simultaneously (a) recognizes its responsibility to help improve real need that, if properly addressed, will have a lasting, positive
the lives of its citizens and (b) subdues its impulses to act in ways impact for Arizona in the areas of education, public safety, natural
that usurp the essential role of the private sector. resources, and infrastructure.
FY 2022 Executive Budget 3

Including the baseline changes and Executive initiatives, the completes the final step of a $1 billion promise to K-12
Executive forecasts a structural surplus of $52 million, resulting in education, ahead of schedule, by fully restoring additional
an ending cash balance of $219 million. assistance formula funding in FY 2022;
Average total spending growth over the last five years markets an “Open Enrollment Month” to inform parents
remains at 4.1%, compared to 11.1% in the five years leading up about open-enrollment options;
to the Great Recession.
awards grants to K-12 schools to scale innovative models
Under the Executive’s FY 2022 spending plan, average spend-
of schooling and instruction;
ing growth over the next three years is 3.3%, which is below the
levels of the mid-2000s and the 10-year average of 3.4%, supports professional development for educators and
schools to provide personal learning opportunities for
students – an educational approach designed to ensure
Education
mastery of academic content and social and emotional
The past 10 months have challenged Arizona’s schools in skills, and to foster student ownership in their own learning;
unprecedented ways, and those challenges will not end when the
establishes new Arizona civics programs to engage
massive vaccine administration is complete.
students in community service and help schools create
Arizona children have missed out on so much, and the State
unique and engaging ideas;
must leverage its deep bench of creative and determined educa-
provides a multi-pronged approach to early literacy strate-
tional champions to address the severe learning loss caused by
gies, including teacher training, student evaluation, literacy
COVID-19.
coaches, and dyslexia specialists;
In FY 2021 alone, more than $1.8 billion in federal funding has
flowed into schools, bringing inflation-adjusted per-pupil fund- invests in schools and students in need by (a) expanding
ing from all sources to an all-time high of $11,221 per student. the pipeline of teachers in low-income schools; (b) knock-
With the investments proposed in the FY 2022 Executive ing down barriers to graduation, college, or the workforce
Budget, the State is on track to have invested $9.0 billion in K-12 by supporting at-risk youth; and (c) eliminating financial
education since 2015. hurdles for low-income students to take examinations that
The FY 2022 Executive Budget allocates 30% of new General qualify for college credit; and
Fund spending, or $274 million, for K-12 and higher education. fully funds schools’ anticipated building renewal and school
The Executive Budget: construction needs.
makes a significant investment in remediation program-
HIGHER EDUCATION
ming for students disproportionately impacted by COVID-
For Arizona’s three public universities – the University of
19 learning loss;
Arizona, Arizona State University, and Northern Arizona Univer-
expands early literacy education;
sity – the Executive Budget enhances their capacity for graduat-
takes the next step in the Arizona school choice movement; ing more students in critical areas, to help Arizona compete in
and the New Economy.
strengthens the civic muscles of Arizona’s future. The Executive Budget also expands adult learners’ access to
quality educational opportunities that support job training,
K-12 EDUCATION
employment, and aspiration for higher education.
In dealing with the COVID-19 pandemic, many states moved
to solve projected budget shortfalls by cutting education Public Safety
spending.
In Arizona, the Executive and Legislature actually increased The Executive Budget makes strategic investments in law
funding for signature education investments in FY 2021. enforcement to modernize communications and physical plant
The FY 2022 Executive Budget: infrastructure; address critical staffing shortages; and expand
services to lower the recidivism rate among individuals leaving
includes a significant supplemental investment to conduct
the State prisons.
high-impact, results-oriented intervention and acceleration
programming to benefit Arizona students impacted most LAW ENFORCEMENT
by the challenges of 2020-2021; Public Safety Assets. The Executive Budget includes funding
expands transportation options for families to get their chil- for the right tools to strengthen the Department of Public Safety’s
dren to and from the school they choose; (DPS) capacity for carrying out its mission:
Upgrades the State’s public safety radio system, which
allows for critical radio communications for over 12,000

users, including 12 State agencies and several local, federal, abuse treatment capacity available to inmates by contracting with
and tribal agencies. third-party organizations.
• Purchases body camera equipment to enhance trooper
safety, improve agency efficiency, and promote public Health and Welfare
transparency.
The Executive Budget remains focused on keeping Arizonans
State Trooper Force Enhancement. DPS faces operational safe from COVID-19 while addressing other key needs, including:
challenges aggravated by an insufficient overtime budget that access to child care;
forces troopers to go off duty before the end of their five-day
safe placements for children in foster care;
work week. This system often results in Friday shifts being short-
staffed, creating service gaps during rush hour. expanded long-term care oversight;
The Executive Budget seeks to resolve this issue by increasing more caseworkers to investigate abuse of the elderly and
the overtime budget, which will improve trooper coverage, vulnerable adults; and
morale, and retention. a new infusion of resources for substance abuse disorder
Additionally, the Executive Budget adds more funds to DPS’s treatment.
annual recruitment budget, to address a growing share of unfilled
cadet trooper slots at the State Trooper Academy. Left unabated, COVID-19 RESPONSE
the risks of a shrinking trooper force and sparse coverage will Public Health. Since the start of the COVID-19 pandemic, the
become a reality when the Department is unable to replace Department of Health Services has spent $587 million in response
troopers who separate from State service. to the emergency. Major categories of expenditures include:
testing and contract tracing;
CORRECTIONS
personal protective equipment;
Prison Safety. To make a prudent investment in safety for
correctional officers, inmates, and the general public, the Execu- public health and public safety employees to bolster
tive Budget: healthcare staff capacity; and
upgrades radio communication and safety vests so that • other health initiatives, including immunizations and
prison operations and safety are not compromised; vaccination management programs.
increases funds to complete critical fire and life safety COVID-19 Provider Assistance. In FY 2020 and FY 2021, to
projects at the Eyman complex; stabilize the social safety net during the pandemic, the Executive
fully funds the Department of Corrections, Rehabilitation & has provided nearly $500 million in assistance, not including
Reentry (ADCRR) building renewal formula for the first time additional federal COVID-19 support, to a multitude of providers
since the formula’s creation; and serving children, the elderly, and individuals with developmental
disabilities. This funding supported providers as they (a) changed
• vacates and deactivates the Florence prison and moves
the way they cared for their clients to protect them from
existing staff to the nearby Eyman prison complex to fill
contracting COVID-19 or (b) saw a decrease in utilization due to
vacant positions.
individual isolation.
The focus of this initiative is to ensure that ADCRR employees
and inmates occupy an environment that is conducive to reduc- SAFE, HEALTHY CHILDREN
ing the recidivism rate. The additional staff from the Florence The Executive Budget ensures more safe and caring places for
prison will allow the Eyman complex to become fully staffed, children.
eliminating the Correctional Officer II vacancy rate, and providing This initiative includes increasing access to child care for low-
inmates with better access to educational and substance-abuse income working families and foster parents by:
treatment programs. Safe, improved, and consistent access to sustaining the suspension of the waitlist through FY 2023,
programming opportunities will allow inmates to receive the to ensure that this important workforce and early childhood
support and education they need to reform and become produc- developing program is available to those who need it;
tive members of society. Furthermore, the deactivation will allow
establishing a pilot program that provides child care subsi-
the health care vendor to relocate its health care staff, which will
dies to low-income parents pursuing degrees in nursing
reduce staffing shortages and alleviate strain on current staff,
and education; and
resulting in better inmate health care.
Reducing Inmate Recidivism. In addition to meeting the • increasing the number of paid absences for which the State
security staffing needs necessary to offer programs aimed at reimburses child care providers, which helps children who
reducing recidivism, the Executive Budget increases substance- are sick to stay at home without families risking
disenrollment from the program.

The Executive Budget also provides additional funding to the FIRE SAFETY
Department of Child Safety, to support congregate care place- Fire Suppression. As the western U.S. experiences drier,
ments for children in foster care beyond the level that the federal warmer climates, with federal forests that have not been
government will reimburse. adequately maintained, Arizona faces a larger number of fires at
Finally, the Executive Budget completes a years-long effort to higher per-acre costs.
integrate physical and behavioral health services for children in To address this more dangerous environment, the Executive
foster care, which will improve care coordination and quality. Budget:
ADULT PROTECTION repays all outstanding cost-share fire bills that the State
owes federal partners in fighting prior-year fires on State
The Executive Budget includes funding to protect vulnerable
land;
adults from neglect and abuse with:
increases the General Fund deposit into the Fire Suppres-
more staff, to address the increase in Adult Protective
sion Fund, to reflect the State’s higher costs associated with
Services (APS) cases and to reduce the caseworker case-
recent increases in multijurisdictional fires;
load, expediting the processing time for getting help to
senior and vulnerable adults; doubles the Governor’s Emergency Fund and dedicates the
increase for Department of Forestry and Fire Management
rate increases for Aging and Adult Services, to reduce high
(DFFM) fire suppression; and
turnover rates and enhance access for vulnerable and
homebound adults and seniors; and • provides the Arizona National Guard with equipment to
access video from federal drone aircraft and share it with
doubling the long-term care facility surveyor team, which is
State partners.
responsible for reviewing complaints about rule violations
and the quality of care at facilities throughout the state. Fire Prevention. Failure to reduce overgrown forests has
caused the State to incur increased fire-suppression costs. The
ENSURING ACCESS TO OPIOID TREATMENT SERVICES Executive Budget:
The need for treatment of substance abuse disorders remains adds 72 inmate crews to perform vegetation management
high. Since the initial deposit of $10 million into the Substance at strategic locations statewide;
Use Disorder Services (SUDS) Fund in FY 2018, the Arizona Health
funds mechanized contract crews for steep-slope opera-
Care Cost Containment System (AHCCCS) had provided, at the
tions; and
time of this writing, nearly 55,000 services to 33,383 underinsured
expands grant funding for private partners that perform
or uninsured individuals who were ineligible for Medicaid.
With SUDS resources expected to be exhausted in FY 2021, forest treatment.
the Executive Budget adds new funding for AHCCCS to continue

health care services to persons in crisis or who struggle with Public Recreation
substance abuse. The Executive Budget includes investments that improve and
The increased funding will allow AHCCCS to serve an esti- expand access to 35 State parks and wildlife infrastructure, which
mated 18,000 individuals in need of treatment. play an increasingly prominent role in tourism and the economic
health of rural Arizona.
Natural Resources Funding initiatives include:
The Executive Budget maintains formula funding to improve remediation of park wastewater treatment systems, begin-
water quality, and it provides more resources to (a) respond ning a multi-year plan;
effectively to the heightened threat of wildfires and (b) pursue a renovation of park structures and fish hatcheries at the end
more aggressive fire prevention strategy. of their useful life; and
WATER QUALITY adding new park features that enhance the visitor experi-
ence.
The Executive Budget fully funds the State’s program for
hazardous waste cleanups, using the statutorily required formula
Government That Works
to fund Department of Environmental Quality (DEQ) efforts to
evaluate and remediate polluted land, including serious contam- The Executive Budget strengthens the responsible steward-
ination in southern Arizona. ship of State assets, boosting internet connectivity statewide and
investing in business-friendly digital infrastructure that optimizes
access to State services.
Funding initiatives include the following:

Expanding the capacity of the Arizona National Guard
Cyber Response Team, which will improve statewide cyber
preparedness and emergency response.
Continued development of a Business One-Stop web
portal, a single online location to help companies and indi-
viduals seamlessly plan, start, and grow Arizona businesses
and relocate business from other states.
Increased investment in rural broadband connectivity with
the installation of nearly 300 miles along I-40 West, from
Flagstaff to Lake Havasu City and recapitalization of the
Rural Broadband Grant program.
Investing in building renewal across the State’s building
system, including fire and life safety projects and targeted
infrastructure repair, replacement, and renovation.
Major General Fund Budget Issues,

FY 2021 and FY 2022
In Millions of Dollars
K-12: Student Focused Acceleration ..................................................... $ 389.0

K-12: Baseline Enrollment Growth and Inflation.................................. 172.9
SFB: Building Renewal Grants (Incl. FY 2021 Supplemental) .......... 142.5
K-12: Fully Restoring Additional Assistance .......................................... 135.5
School Facilities Board (SFB): New Schools...............................................52.6
Universities: New Economy Initiative ..........................................................................35.0
Transportation: I-40 West Broadband .........................................................33.1
K-12: Reduce Rollover ........................................................................................30.0
ADCRR: Eyman Fire and Life Safety Project ..............................................25.6
Child Safety: Families First Prevention Services Act ..............................25.1
Forestry and Fire Management: Arizona Health Forest Initiative .......23.8
ADCRR: Building Renewal .................................................................................22.2
DES: Johnson Case Impact on DDD Caseload Growth .........................19.8
Public Safety: Body Cameras ..........................................................................13.8
Commerce: Rural Broadband Grant Program Expansion ...................10.0
Fire Safety: Fire Suppression and Federal Repayment ........................... 8.5
Public Safety: Overtime and Recruitment/Retention.............................. 7.0
K-12: Early Literacy Support ............................................................................... 6.9
ADOA: Building Renewal ..................................................................................... 6.2
K-12: Statewide Assessments ............................................................................ 5.0
Environment: Fully Funding WQARF Program .......................................... 5.0
Projected Ending Balances

FY 2020 ............................................................................................................... $ 372.5
FY 2021 ................................................................................................................... 624.9
FY 2022 ................................................................................................................... 219.3
FY 2023 ................................................................................................................... 225.5
Projected Structural Balances

FY 2020 ............................................................................................................... $ 177.4
FY 2021 ................................................................................................................... 351.8
FY 2022 ......................................................................................................................51.6
FY 2023 ......................................................................................................................57.9

Executive Budget In-A-Flash
GENERAL FUND CASH FLOW
Prelim Actual Executive Budget Executive Budget Executive Budget Executive Budget
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Beginning Balance $ 957,241,000 $ 372,457,000 $ 624,913,300 $ 219,329,554 $ 225,545,029
Adj. Base Revenues $ 10,879,587,100 $ 11,783,559,800 $ 12,413,452,354 $ 13,025,472,855 $ 13,562,989,393

Revenue Changes - $ (43,900,000) $ (230,212,600) $ (400,412,600) $ (600,412,600)
One-time Revenues $ 90,908,000 97,033,600 36,700,000 16,700,000 16,700,000
Total Sources of Funds $ 11,927,736,100 $ 12,209,150,400 $ 12,844,853,054 $ 12,861,089,809 $ 13,204,821,822
Enacted Spending $ 11,284,172,100 $ 11,761,208,000 $ 11,761,208,000 $ 12,625,523,500 $ 12,635,544,780

Baseline Changes (212,241,000) 573,944,200 (10,948,820) 323,055,700
YOY1
Net New Initiatives 35,270,100 290,371,300 20,970,100 (1,814,900) % growth
Total Uses of Funds $ 11,284,172,100 $ 11,584,237,100 $ 12,625,523,500 $ 12,635,544,780 $ 12,956,785,580
7.8% 0.3% 7.3% 0.1% 2.5%
BSF Deposit 271,107,000 0 0 0 0
Ending Balance $ 372,457,000 $ 624,913,300 $ 219,329,554 $ 225,545,029 $ 248,036,242
GENERAL FUND STRUCTURAL BALANCE

Prelim Actual Forecast Forecast Forecast Forecast YOY
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 % growth
Ongoing Revenues $ 10,879,587,100 $ 11,783,559,800 8.3% $ 12,213,039,754 3.6% $ 12,625,060,255 3.4% $ 12,962,576,793 2.7%
Ongoing Spending 10,702,177,900 11,431,755,800 6.8% 12,161,404,580 6.4% 12,567,190,780 3.3% 12,918,098,580 2.8%
Structural Balance $ 177,409,200 $ 351,804,000 $ 51,635,174 $ 57,869,475 $ 44,478,213
HISTORICAL REVENUES TO SPENDING GENERAL FUND STRUCTURAL BALANCE COMPARISON OF REVENUES TO SPENDING
14.0 1,500 14,000
959
1,000
12.0 407 13,000
500 177
(23)
10.0 0 (302) 352
(364) 177 12,000
(409) (55) 52 58 44
(500)
(411)
$ Billions
$ Millions
8.0
$ Millions
(1,000) 11,000
6.0 (1,500)
(2,000) 10,000
4.0 (2,500) (2,203)
9,000
(3,000) (3,401)
2.0
(3,500)
8,000
- (4,000) FY FY FY FY FY
FY 2010 FY 2013 FY 2016 FY 2019 FY 2022 FY 2010 FY 2013 FY 2016 FY 2019 FY 2022 2020 2021 2022 2023 2024
Ongoing Revenues One-time Revenues Cash Balance Ongoing Spending One-time Spending
Total GF Revenues Total GF Spending
1
Year-over-year growth compares total spending, including supplemental appropriations and Budget Stabilization Fund deposits, to budgeted spending during the prior year.

GENERAL FUND SPENDING New FY 2021 Spending: $ (176,970,900)
Over our first six years in office, this New FY 2022 Spending: $ 864,315,500
Administration has limited average spending Prelim Actual Executive Budget Baseline Adjustments
3
New Initiatives Executive Budget YOY
growth to just 3.9% - while increasing K-12 FY 2020 FY 2021 FY 2022 FY 2022 FY 2022
4
% growth
4 5 9 12 13 14
Education funding by over $1.7 billion. Education 5,200,185 5,210,531 195,350 21,330 5,816,272 11.6%
AHCCCS 1,760,748 1,951,981 127,568 3,334 2,082,883 6.7%
The FY 2022 Executive budget continues this

Corrections 1,167,111 1,205,396 0 25,959 1,231,355 2.2%
Economic Security 749,708 812,054 133,125 4,400 949,580 16.9%
conservative trend. While total spending Child Safety 384,653 387,893 0 25,138 413,031 6.5%
grows by 7.3%, Executive Initiatives only ASU - Tempe 341,917 324,717 0 18,900 343,617 5.8%
Public Safety 92,350 91,138 160,709 21,277 273,124 199.7%
account for a 2.5% increase, with the School Facilities Board 325,650 273,995 5,500 0 240,735 -12.1%
remainder attributed to formula increases in U of A 215,809 207,722 0 9,450 217,172 4.5%

NAU 117,251 109,805 0 6,650 116,455
health care and education. Other1 1,199,896 1,009,005 (48,308) 153,933 941,299
6.1%
-6.7%
Total $ 11,555,279.10 $ 11,584,237 $ 573,944 $ 290,371 $ 12,625,524 9.0%
1
Other spending includes Budget Stablization Fund deposits, if any, as well as one-time spending offsets or other savings that do not reduce Budgeted levels.
GENERAL FUND SPENDING GROWTH RATES, FY 2004 to FY 2008 vs. FY 2016 to FY 2022 GENERAL FUND SPENDING DISTRIBUTION, FY 2012 to FY 2022 (billions)
18% 7.0
16.2% 16.3%
15.8%
16%
6.0 5.8
14%
12%
5.0
10% 9.3%
8.8%
7.8% 4.0
8% 7.3%
3.4
$
6%
3.0
4%
2.6% 2.2
1.8% 2.0 1.9
2% 1.3% 1.6
0.3%
1.2
0%
0.9 1.0 0.9
FY 04 FY 05 FY 06 FY 07 FY 08 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 1.0 0.7 0.8
0.6
-2%
-1.6%
-4% 0.0
K-12 Education AHCCCS & DHS Corrections Universities DES & DCS Other
YOY Spending Growth 11.1% Avg Spending Growth, FY 04-08 3.9% Avg Spending Growth, FY 16-21 FY 2012 Enacted Budget ($8.4B) FY 2022 Executive Budget ($12.6B)
3
The Baseline Adjustments for School Facilities Board include removal of one-time funding in FY 2020 and retired debt service on construction of new schools that occurred in the 2000s.
4
The amounts in the FY 2021 Executive Budget column may not equal to the sum of the FY 2020 and FY 2021 Baseline and Initiative columns because of supplementals included in FY 2020 that are considered one-time spending and not necessarily carried into FY 2021.

GENERAL FUND SPENDING BREAKDOWN
KEY HIGHLIGHTS COMMUNITY COLLEGES CORRECTIONS
• The Executive Budget protects public health & safety, with over $500 CMA $1.4M FY 2021 Baseline DCA $26M FY 2021 Initiatives
million in Baseline and Initiative spending in these Areas. ##### $2.6M Equalization Aid ##### $17.9M Bed Management Strategy
• Additionally, the Budget invested $464 million on various One-Time ##### ($0.5M) STEM and Workforce Aid ##### $5M Recidivism Reduction: Substance Abuse Treatment Expansion
priorities, includng investing in our State's capital infrastructure, ##### ($0.7M) Operating State Aid ##### $2.8M Staff Safety Equipment
expanding accesss to Broadband, and building and maintaining our K-12 ##### $0.3M Braille Transcription Program Expansion
HEALTH AND WELFARE #####
K-12 AND HIGHER EDUCATION OTHER CHANGES
ECONOMIC SECURITY ($49.7M) FY 2021 Net Baseline
DEPARTMENT OF EDUCATION DEA $133.1M FY 2021 Baseline UPP $20.1M 27th Pay Period Universities
$195.3M FY 2022 Baseline ##### $113.3M DDD Caseload & Capitation Growth URET $12.8M Unallocated Retirement Rate Adjustment
$135.5M Accelerate Additional Assistance ##### $19.8M DDD Johnson Case Impact ($82.5M) All Other, Net Baseline
$87.7M Enrollment Growth dea $4.4M FY 2021 Initiatives HITF $153.9M FY 2021 Net Initiatives
$85.2M Inflation Adjustment 216 $2.9M Adult Protective Services Caseload Growth ### $25.6M Department of Corrections, Rehabilitation & Reentry- Eyman Fire & Life
$30M Reduce K-12 Rollover 1176 $1.5M Provider Rate Increases for Adult and Aging Services ### $18.5M Arizona Healthy Forest Initiative
$5M Arizona Industry Credential Incentive Program AHCCCS HITF $14M HITF One-Time Adjustment
$0.9M Empowerment Scholarship Account - Basic State Aid Increas HCA $127.6M FY 2021 Baseline ### $10M Rural Broadband Grants
$0.4M Teacher Professional Development Pilot 1076 $121.1M Traditional Formula Adjustments 287 $5M WQARF Priority Site Cleanups
($8.2M) Increased Permanent Fund Distributions 1098 $9.6M CMDP Formula Adjustments ### $4M Governor’s Emergency Fund Cap Increase
($53.9M) Property Taxes From New Construction 1092 $8.2M KidsCare Formula Adjustments 764 $3.6M Convening the Independent Redistricting Commission
($87.3M) Remove One-Time FY 2021 Appropriations 1096 $7.6M ALTCS Formula Adjustments ### $2.5M Unallocated ADOT Vehicle Fee Adjustment
$21.3M FY 2022 Initiatives 1093 ($2.2M) ACA Newly Eligible Adults Formula Adjustments 452 $0.2M Inspection and Reclamation Mine Land Programs
$6.9M Early Literacy Support 1117 ($8M) Reversal of One-Time Childrens' BHS Fund Deposit $70.5M All Other Initiatives
$5M Statewide Assessments 1083 ($8.7M) Proposition 204 Formula Adjustments
$3M Expansion and Innovation Fund HCA $3.3M FY 2021 Initiatives OVERALL SPENDING
$2.5M College Credit by Examination Incentive Program 1100 $3M Ongoing IT Projects $573.9M FY 2021 Net Baseline
$1.3M College Placement Exam Fee Waiver 1110 $0.3M Federal Interoperability Rule Implementation $623.7M Baseline Increases
$1M Arizona Personalized Learning Network 1101 $0.1M PMMIS Roadmap ($49.7M) Baseline Decreases
$0.5M Alternative Teacher Development Program Expansion DEPARTMENT OF CHILD SAFETY $290.4M FY 2021 Net Initiatives
$0.4M Jobs for Arizona Graduates CHA $25.1M FY 2021 Initiatives $290.5M Initiative Increases
$0.4M Investigations Unit Expansion 179 $25.1M FFPSA Implementation ($0.1M) Initiative Decreases
$0.4M Adult Education State Match .
SCHOOL FACILITIES BOARD PUBLIC SAFETY $864.3M Total New Spending
$5.5M FY 2021 Baseline
$102.5M Building Renewal Grant PSA DEPARTMENT OF PUBLIC SAFETY NEW GENERAL FUND SPENDING PROFILE FY 2022
$40.9M New School Facilities - Conceptual Approvals PSA $160.7M FY 2021 Baseline
$11.7M New School Facilities - In Progress 537 $160.7M Public Safety Fee Backfill 0 100 200 300 400 500 600 700
($149.6M) Remove One-Time FY 2021 Appropriations $21.3M FY 2021 Initiatives 195

K-12 Education
##### $7M Overtime and Recruitment/Retention 21
UNIVERSITIES ##### $13.8M Body Cameras Economic Security
133
4
$35M FY 2021 Initiatives ##### $0.5M AZPOST Officer Misconduct Database
$18.9M ASU - Workforce for New Economy AHCCCS 128
3
$9.5M U of A - Workforce for New Economy
$6.7M NAU - Workforce for New Economy Community Colleges
1
-
DJA
Universities -
35
School Facilities Board 5

-
Other 111
226
574
Total 290
Baseline Changes Executive Initiatives

General Fund Sources and Uses of Funds
$ in thousands
FY 20 FY 21 FY 21 FY 21 FY 22 FY 22 FY 23 FY 23 FY 24 FY 24
Prelim Actual Enacted Base Net Changes Executive Budget Net Changes Executive Budget Net Changes Executive Budget Net Changes Executive Budget
4 5 6 7,8 9 12,13 14 17,18 19 21,22 23
SOURCES OF FUNDS
Beginning Balance 957,241 372,457 372,457 624,913 219,330 225,545
Ongoing Revenues
Base Revenues 11,617,161 11,866,022 12,612,053 13,169,713 13,915,273 14,492,839
Urban Revenue Sharing (737,574) (828,493) (828,493) (756,261) (889,800) (929,850)
Adjusted Base Revenues 10,879,587 11,037,529 11,783,560 12,413,452 13,025,473 13,562,989
Transfers & Newly Enacted Changes 90,908 16,700 53,134 (193,513) (383,713) (583,713)
PDRF Transfer 69,000 16,700 16,700 16,700 16,700 16,700
Wells Fargo Settlement 20,000 0 0 0 0 0
Water Infrastructure Repayment 0 0 0 20,000 0 0
Treasurer's Fund Balance Cap Increase 0 0 0 (124) (124) (124)
Treasurer Accountant Reclassification 0 0 0 (289) (289) (289)
New Fund Transfers 0 0 0 0 0 0
Prior Fund Transfers 1,908 0 0 0 0 0
CRF Transfers 0 0 78,861 0 0 0
Veterans' Income Tax Settlement Fund Revertment 0 0 1,473 0 0 0
TY 2020/21 IRC Conformity 0 0 (43,900) (29,800) 0 0
Executive Tax Placeholder 0 0 0 (200,000) (400,000) (600,000)
Subtotal Revenues 10,970,495 11,054,229 11,836,693 12,219,940 12,641,760 12,979,277
TOTAL SOURCES OF FUNDS 11,927,736 11,426,686 12,209,150 12,844,853 12,861,090 13,204,822
USES OF FUNDS
Operating Budget Appropriations 11,224,818 11,703,789 74,029 11,777,819 812,260 12,590,079 45,571 12,635,650 320,738 12,956,388
Other Expenses/(Revenues) 330,461 57,419 (251,000) (193,581) 229,026 35,445 (35,549) (105) 503 398
Prior Year One-time Supplementals 80,719 0 0 0 0 0 0 0 0 0
Prior Year Ongoing Supplementals/Ex-Appropriations 46,460 0 0 0 0 0 0 0 0 0
Phoenix Convention Center Payment 23,500 23,998 0 23,998 501 24,499 501 24,999 501 25,500
Rio Nuevo District 16,000 16,000 0 16,000 0 16,000 0 16,000 0 16,000
Asset Sale/Lease-Back Debt Service 77,709 53,702 0 53,702 2 53,704 2 53,706 2 53,708
2010B Debt Payoff 190,000 0 0 0 0 0 0 0 0 0
27th Pay Period Non-University 0 0 0 0 (43,079) (43,079) 0 (43,079) 0 (43,079)
27th Pay Period Universities 0 0 0 0 20,052 20,052 (20,052) 0 0 0
Unallocated FY 2021 Health Insurance Adjustment 0 1,719 0 1,719 (1,719) 0 0 0 0 0
Unallocated FY 2020 Health Insurance Adjustment 52 0 0 0 0 0 0 0 0 0
Prior Year Transportation Funding 95,310 0 0 0 0 0 0 0 0 0
Unallocated Retirement Rate Adjustment 0 0 0 0 12,763 12,763 0 12,763 0 12,763
HITF One-Time Adjustment 0 0 0 0 (8,000) (8,000) (14,000) (22,000) 0 (22,000)
DES FY 2021 Caseload & FMAP Savings 0 0 (103,000) (103,000) 103,000 0 0 0 0 0
AHCCCS FY 2021 Caseload & FMAP Savings 0 0 (141,000) (141,000) 141,000 0 0 0 0 0
One-Time Arts Funding 0 0 0 0 2,000 2,000 (2,000) 0 0 0
Administrative Adjustments 128,000 146,000 (3,000) 143,000 0 143,000 0 143,000 0 143,000
Revertments (598,396) (184,000) (4,000) (188,000) 0 (188,000) 0 (188,000) 0 (188,000)
Transfer to Rainy Day Fund 271,107 0 0 0 0 0 0 0 0 0
TOTAL USES OF FUNDS 11,555,279 11,761,208 (176,971) 11,584,237 1,041,286 12,625,524 10,021 12,635,545 321,241 12,956,786
ENDING BALANCE 372,457 (334,522) 624,913 219,330 225,545 248,036
Ongoing Revenues 10,879,587 11,037,529 11,783,560 12,213,040 12,625,060 12,962,577

Ongoing Expenditures 10,702,178 11,431,756 11,431,756 12,161,405 12,567,191 12,918,099
STRUCTURAL BALANCE 177,409 (394,226) 351,804 51,635 57,869 44,478
Note: FY 2021 to FY 2024 Net Changes columns include baseline and initiative issues.

The Economy
Just as before the COVID-19 pandemic, Arizona remains well positioned for continued rapid
expansion. The overall pace of growth will likely be dictated by progress in containing the virus and
the State’s response to post-election changes in national and local economic policy.
Further, since the outbreak of the pandemic, some states

“When the pandemic hit, Arizona’s economy was booming.
have performed remarkably well, while others struggled and
We had more jobs than people to fill them. In the last several
continue to do so.
months, businesses across the state had to adjust or pause
While forecasters debate prospects for economic recovery, it
operations — and many have done an incredible job of
can be agreed that:
keeping employees and patrons safe. With our economy
moving forward and returning stronger, we will continue to the overall pace of recovery will be dictated by how quickly
support local businesses across the state.” COVID-19’s impact can be mitigated, by either an effective
vaccine or other mitigation efforts; and
Gov. Doug Ducey
• Arizona’s performance throughout the pandemic has
exceeded all expectations, and therefore strong growth will
T he national economy suffered due to the 2020 COVID-19

pandemic and brought about the sharpest quarterly real GDP
decline in the nation’s history, only to be followed by the fastest
continue over the four-year budget window.
It is important to note that, prior to the pandemic, the U.S.

economy was enjoying its fastest growth rate in a decade. At this
rebound in history as many businesses reopened.
writing, multiple highly effective vaccines are being administered
Compared to most states, Arizona has weathered the storm
across the country, with more on the way, and, at whatever point
particularly well. The reasons:
COVID-19 is no longer perceived as a major threat, the pre-
a robust pre-COVID-19 economic environment,
pandemic growth trajectory should resume, absent substantial
a competitive and pro-business tax and regulatory environ- federal policy shifts.
ment, and The Nation. As this forecast was prepared, the nation’s econ-
• a targeted and thoughtful approach to public health omy was on track to finish the year approximately 5% below the
measures that protects both lives and livelihoods. level of GDP in quarter four of 2019. However, the losses occurred
during the first two quarters of 2020, at a time when severe
The year 2020 will be remembered and studied as a period in
economic restrictions were temporarily imposed nearly nation-
which the overall economy was both:
wide, only to be followed by two quarters of unprecedented rapid
uniquely policy-driven (there can be little arguing that,
growth.
however incidental the general impact of public policy on
The greater concern is for employment, which in November
the overall economy might be, pandemic-response policy
2020 stood at just under ten million jobs below the high-level
was the dominant force this year); and
mark set in February. While the nation’s economy generally
• uniquely local, in that divergent policy responses to the continues to recover, job recovery has slowed following its initial
pandemic from state to state provided a nearly real-time summer rebound, perhaps implying a potentially permanent shift
analysis of state-level public policy impacts on economic away from some types of labor-intensive commercial activity.
performance. One of the more striking characteristics of the national 2020
Even while national economic growth was whipsawed by the economy is the disparity of performance among the states.
impacts of mitigation strategies that had serious economic While U.S. real GDP fell at an annual rate of 31.4% in the
effects, coupled with consumer reaction to the virus, certain second quarter, performance by state ranged from a decline of
segments of the economy (e.g., online sellers and some “big box” just 21.9% in Delaware to 42.2% in Hawaii. Of local interest,
national retailers) flourished. Arizona lost just 25.3% of its annual economic output, placing
In contrast, industries that depend on direct personal service third nationally and joining Utah, Washington, and Virginia in the
(e.g., hospitality and transportation) and many smaller local busi- top five.
nesses across the industry spectrum were hit hard. Similarly, while as of November 2020 the nation remained
about 6% below its February pre-crisis peak employment level,
job losses by state ranged from 15.2% in Hawaii (almost triple
that of the U.S.) to just 0.4% in Idaho. Again, Arizona has

performed well, down by just 3.1% and ranked sixth across all Interestingly, most historically relevant factors for GDP
states. growth have taken a backseat to the pandemic; economic funda-
The sharp state-by-state contrast is unusual. During the Great mentals and investor expectations about the future are now
Recession, some states, including Arizona, were hit harder than secondary to whether an economy is “open” or “closed” by policy
others, but generally all states suffered and recovered similarly. and investor expectations about public health today. Still, most
When the U.S. lost about 5% of its jobs during the Great Reces- economists point to a solid foundation in the economy beyond
sion, two of the hardest-hit states – Arizona and Nevada – lost the current headwinds.
about 10% and 11% of its jobs, respectively, only about double While it is hard to derive many positives from the pandemic
the U.S. average. experience, at least three warrant mentioning:
The strong national recovery in the third quarter of 2020 is a As illustrated by the March 2020 passage of the CARES Act,
source of encouragement. While growth since then has slowed it is clear that, if significant fiscal policy measures are
to less extreme levels, it appears likely that GDP will shortly required, Congressional Democrats and Republicans can
approach or even return to its pre-pandemic level and then work together when a dire situation calls for compromise.
resume a trend in the 2.5% to 3% annual growth range.
The Federal Reserve has illustrated that it will continue to
Two factors could slow or change those prospects:
provide the necessary accommodative monetary policy to
the continued persistence of the COVID-19 pandemic sustain the economy.
beyond spring 2021; or
• A significant share of the labor market was able to adapt
• a marked change in federal tax and fiscal policy, especially quickly to the flexible “work from home” environment that
as the partial expiration of the 2017 Tax Cuts and Jobs Act has allowed millions of American workers to maintain
begins to loom in 2025, requiring cooperation between the employment in a safe and effective manner.
President and Congress to extend.
Of significance will be how Congress and the Executive
Arizona. The state remains well positioned as a top national branch respond to economic pressures or any future shocks that
performer since the start of the pandemic and the national reces- arise, and how the new administration’s plans for fiscal, health
sion, and it has seen the third-strongest economic performance care, and international trade policies evolve, particularly to the
of any state since the recession’s peak in the second quarter of extent that the administration seeks to re-impose some of the
2020. more economically damaging policies that were rolled back or
In a marked departure from its “slow growth” following the relaxed over the past four years.
2008 Great Recession, after the beginning of the pandemic
Arizona led the nation in job growth between May and October EMPLOYMENT
2020, recovering approximately 193,900 (66%) of the 294,600 In January 2020 the national labor market was very healthy.
jobs lost. Job creation occurred at a persistent rate over the better part of
While confident about the state’s economy, the Executive the last decade, as businesses put concerns of the Great Reces-
does acknowledge the risks presented by, for example, a persis- sion behind them. A bonus came from corporate tax rate reduc-
tence of the pandemic and implementation of a nearly $1 billion tions, accompanying regulatory reform, and an array of techno-
state income tax surcharge mandated by Proposition 208, the logical innovations that spurred productivity growth.
largest tax increase in Arizona history. Only a few weeks later, the world changed dramatically.
Overall, however, the FY 2022 Executive Budget recognizes By December, the U.S. economy had regained much of its
Arizona’s strong economic and fiscal health, and the resulting strength, but net job losses continued to range between eight
revenue projections acknowledge the state’s remarkably strong and 10 million, with losses concentrated largely in personal
performance since the start of the pandemic. service sectors that necessitate person-to-person contact with
customers. Hospitality, entertainment, and travel have been hit
National Outlook especially hard. Meanwhile, most other workers have, to varying
degrees, weathered the storm.
There is wide variance among forecasters of U.S. real GDP
Going forward, labor market conditions will likely improve
growth, with virtually all agreeing that the pace will ultimately be
dramatically as the pandemic begins to be contained and a
dictated by progress or lack thereof on the pandemic, coupled
vaccine or other preventive therapeutic is made widely available.
with any additional stimulus measures approved by Congress and
The future will bring continued and improving conditions to
the White House.
those who have maintained employment, and when the economy
The Blue Chip Economic Indicators forecast, issued by 50 of
fully reopens as expected by mid-2021, labor markets will begin
the nation’s top business forecasters, foresees growth ranging
to absorb the slack that exists today.
from 2% to 6% for 2021 as of this writing.

However, there is little denying the shift during this crisis INTEREST RATES
toward more automated, decentralized industries and businesses The year 2020 illustrated why interest-rate forecasting is so
– e.g., national fast-food chains and drive-throughs versus local challenging. In 2019, economists debated whether yield curve
sit-down restaurants. How permanent these changes will be inversion (a situation in which long-term debt instruments have
along with their long-term implications remains to be seen. lower yields than short-term debt instruments of the same credit
quality) was sending potential recession signals. This was espe-
CONSUMER SPENDING
cially newsworthy when a two-year Treasury note traded at rates
Since the onset of the pandemic, many Americans’ disposable that exceeded the 10-year Treasury; historically, such a develop-
incomes have surged above the pace of spending, as savings ment has been followed by recession within 12 to 18 months.
rates skyrocketed and left many consumers with large cash However, few would suggest that the yield curve inversion could
balances. While savings have certainly not been common to all have been predicting the public health crisis or its policy
income groups, they are real and significant, suggesting that the responses.
pace of spending in the economy will not erode from here and Regardless, in the last year the Federal Reserve has demon-
may indeed accelerate, as financial concerns give way to higher strated forcefully that it will do whatever it takes to sustain the
levels of consumer confidence. economy through a crisis, including a massive balance sheet
expansion with an unprecedented purchase of private corporate
Figure 1
debt. It is expected that low interest rates will continue until the
10-Year Consumer Saving Rates economy is fully healed or inflation finally begins to reveal itself.
MARKET VOLATILITY
As of January 2020, the stock market was at record highs,
buoyed by persistently low interest rates despite relatively low,
pandemic-induced earnings growth. Investors see future profits,
and, with interest rates below 1%, the discount rate on those
future profits is very low. Equities have become the only viable
game in town, and equity prices continue to move higher.
Going forward, the pace of equity appreciation will be influ-
enced by the pandemic, progress or lack thereof on trade agree-
ments, plans for an infrastructure initiative, tax and tax-related
fiscal policy, antitrust actions and tech regulation, foreign appe-
tite for U.S. Treasuries, and concerns or lack thereof over U.S. debt
levels. However, low interest rates will likely provide support for
ongoing appreciation.
This sets the stage for at least moderate spending growth by
With respect to its impact on the General Fund, stock market
spring 2021, with steady increases after that as spending spreads
volatility could dampen capital gains realizations in the next few
to areas hit the hardest by the pandemic.
years while fueling some of the recent revenue over-perfor-
This positive outlook for overall consumption should not
mance, since income from sales today is taxable today. This situ-
mask the fact that some Americans will struggle to find long-term
ation, coupled in Arizona with uncertainty regarding taxpayer
employment until pandemic fears subside. However, others will
response to the new Prop. 208 income tax surcharge, will require
spend on durable goods, housing improvements, and ultimately
monitoring as discussed below in the revenue outlook.
travel and entertainment that have been on hiatus since spring
2020. BUSINESS SPENDING
While causes for concern include inflated equity prices, the
Last year at this time it was noted that the sluggish pace of
uncertainty of new policy initiatives coming from Washington,
business capital investment spending was clearly a drag on over-
D.C., and no immediate resolution to international trade tensions,
all 2019 growth. Then, the pandemic put even more pressure on
all concerns are overshadowed by the very real prospects of a
business owners and decreased willingness to expand plants and
robust recovery, with consumers awakening from the year-long
equipment in the U.S. This posture is likely to continue, despite
COVID-19 slumber. One would expect savings rates to come
the economic recovery, to the extent that the 2020 election
down as consumer confidence grows and buyers take advantage
outcome introduces a new type of uncertainty.
of nonexistent inflation (except for housing) and historically low
Growth in business investment must be a key component of
interest rates.
any expansion, and many economists believe that such a resur-
gence depends on prospects for global growth, which will require

a resolution of trade disputes and the permanent elimination of Figure 2
recently imposed tariffs coupled with a continuation of recent
2020 Employment Rates Relative to Pre-Recession Peak
regulatory and tax changes that have favored fixed investment.
How the new administration navigates this environment may play
an important role in these prospects.
The Executive Budget’s outlook is built on modest growth
assumptions going forward. While Arizona growth and accompa-
nying revenue collections would slow in a national downturn, it is
also true that the state is far better positioned than in 2009, both
economically and fiscally, to weather a national storm.
Arizona Outlook
In assessing the Arizona economy, it makes sense to recount
its strength just prior to the pandemic and during it. Even as many
parts of the country experienced deep and persistent economic
and revenue losses, similarly dire predictions for Arizona have
proved to be far too pessimistic.
Arizona’s response to the pandemic and its accompanying
global recession has been more sectoral than total. Where other
states imposed broad, persistent, and sometimes arbitrary
restrictions, Arizona’s approach was more measured and
targeted. As a result, Arizona’s employment market and gross
state product were hit less hard and rebounded more quickly, large part to recent state and federal regulatory and tax relief.
due to continued growth and expansion in sectors that were able Further, while all states lost manufacturing jobs in 2020, Arizona’s
to operate safely. That growth offsets what are likely to be linger- losses appear to be about half the rate observed in other states,
ing and persistent losses in less fortunate areas. and the state continues to attract the interest of potential new
manufacturers, which bodes well for resurgent growth in 2021
EMPLOYMENT
and beyond.
Before the large swings induced by the pandemic and its
Construction. In 2019, the state’s 12,000 new construction
accompanying commercial restrictions, Arizona employment
jobs ranked Arizona among the top five states in construction job
growth in 2018 and 2019 was near 3% per annum. The diversity
growth. Even as broader employment in Arizona and nationally
of the state’s economy, coupled with the robust pace of growth
saw negative growth during 2020, the construction industry in
in the real estate sector, should allow employment growth to
Arizona held its own – a testament both to the resilience of the
resume.
state’s overall economy and to the Executive’s early decision to
The State’s Blue Chip forecasting panel predicts employment
designate the sector as an essential service not subject to any
losses in 2020 to be 2% to 3%, followed by a robust recovery of
mandatory closure orders.
3% to 5% gains in 2021, as idled sectors of the economy continue
Bright prospects are in place going forward, as the construc-
their recovery and sectors that were able to continue operating
tion sector will be buoyed by surging demand for residential
during the pandemic continue to grow.
housing, continued industrial expansion, and a robust market for
Arizona is well positioned to continue positive trends that
home improvement projects. For context, according to Arizona
were in place prior to the pandemic. Trade relations with Mexico
Business magazine, the state’s homeownership rate surged by
have improved significantly in recent years, and many western
nearly 8% in 2020 – the fastest such growth rate in the country
states (aside from California) have witnessed significant growth
and the largest annual increase ever recorded. It is difficult to
as workers and businesses have migrated away from high-tax,
explain a one-month increase of this magnitude given the lack of
high-regulation jurisdictions and toward places with lower costs
historical context, but a single month’s data is unlikely by itself to
of doing business. Arizona’s economy offers considerable poten-
portend the type of “bubble” risk seen, for example, in 2008.
tial, and the economic development community remains active in
responding to relocation inquiries. PERSONAL INCOME
Manufacturing. Arizona’s manufacturing sector has fared Historically, personal income growth has been a reliable indi-
remarkably well both prior to and through the 2020 recession. In cator of economic growth in the state, and Arizona has regularly
Arizona, year-over-year growth in manufacturing employment been among the nation’s leaders in this measure.
was growing at about 5% per annum coming into 2020, thanks in

However, 2020 was an unusual year, and historical patterns While direct data on migration between states in 2020 is not
have seldom held. Large federal transfer payments in the second yet available, it is assumed based on proxy measures that move-
quarter of 2020 led to personal income surging during that ment slowed during the pandemic and the recession, even as
period by nearly 7% nationally and by 8% in Arizona, despite some states, including Arizona, may have been buoyed some-
simultaneously soaring unemployment and the pandemic- what by the state’s appeal relative to more restrictive jurisdic-
induced recession. As one-time stimulus measures began to roll tions.
off thereafter, measured personal income growth disappeared. The quality and skill levels of the workers Arizona attracts and
Neither trend is particularly informative of underlying economic retains will continue to be dictated by the needs of Arizona
activity and should be ignored. employers. As advanced manufacturing and professional
Instead, the Executive looks to other bellwethers that were business service, research, and healthcare needs grow, so, too,
less directly impacted by one-time cash transfers, revealing a will the need for workers with requisite skills. The Executive
state economy that has held up well, coupled with a steady expects the continued growth in the state’s manufacturing and
stream of withholding payments throughout the recession. technology sectors to drive additional migration from their tradi-
Absent policy factors, it is likely that personal income growth tional hubs – such as the Pacific coast – in the form of young
would have been notably stable, if somewhat slowed, and in the professionals, instead of traditionally older retirees.
3% to 4% range last year. Personal income growth is expected to However, the Executive recognizes the negative potential
continue, and perhaps accelerate, from this trend over the three- impact of Prop. 208 on the state’s growth prospects. Prior to its
year budget period. passage, taxpayers making over $500,000 per year made up
Which outcome materializes depends in large part on behav- nearly 30% of Arizona’s Individual Income Tax revenues. Prop.
ioral responses to State tax increases locally and the sustainability 208 jeopardizes current and prospective revenues to the General
of economic growth coming out of the recession. Fund from these taxpayers and small businesses, along with the
jobs they create.
Figure 3
RISKS
Arizona Withholding Revenue & Employment Stability
A potential risk to Arizona comes from a scenario in which
the nation falls back into recession due to the continued spread
of the coronavirus.
While Arizona and many other states have adopted postures
that simultaneously protect public health and protect the jobs
and incomes that make up a state’s economy, there is no guar-
antee that such a posture will be adopted in all states or at the
national level, and Arizona is necessarily subject to national
winds.
The Executive intends to continue combating the pandemic
and taking necessary steps to mitigate its effects in the least
disruptive manner, but much of this risk is beyond the State’s
direct control.
A second possible risk comes from shifts in tax and regulatory
policy. The combined potential for federal policy changes and
Prop. 208’s tax hikes on small businesses and other high-income
earners could reduce Arizona’s economic competitiveness and
harm economic growth.
Passage of the 2017 Tax Cuts & Jobs Act and efforts to cut
IN-MIGRATION red tape at the federal level over the past several years have
Coming into 2020, Arizona consistently ranked among the fueled substantial growth in Arizona, particularly in the mining
top destinations for net domestic in-migration, based on assess- and manufacturing sectors. However, if the incoming federal
ments of IRS data. While this trend has been present for decades, administration makes good on some of its promises to roll back
the recent pace of migration into Arizona relative to other states those initiatives, some of that growth could be slowed or even
has surged. The state captured about 10% of total U.S. migration reversed, which could impact State revenue growth going
in 2018 and more than 15% in 2019, despite having only about forward.
2% of the nation’s population. The level of migration reached a Unfortunately, that prospect was simultaneously paired with
contemporary peak at nearly 100,000 people as well. the passage of the Prop. 208 income tax surcharge on taxpayers,

including small businesses, making more than $250,000 per year. The Revenue Outlook
The immediate effect of the tax increase is to move Arizona from
General Fund revenue growth in FY 2020 continued to
having the nation’s sixth-lowest top marginal individual income
outperform expectations, despite the onset of the pandemic and
tax rate to the ninth-highest, linking it with such high-tax states
its associated recession late in the fiscal year.
as New York, California, Minnesota, and New Jersey.
In contrast to June 2020 Joint Legislative Budget Committee
According to data available from the IRS, an outsized portion
projections that the General Fund would finish FY 2020 with a
of income above $250,000 per year comes from business activity
$640 million cash shortfall, the State ultimately recorded revenue
and return on investments. Taxpayers that have that type of
growth of about 3% (after accounting for the delayed receipt of
income are both highly mobile and critical to a state’s growth
Income Tax payments due to payment deferral) and a cash
prospects. It is likely that at least some investment and business
balance of $375 million.
activity that would have occurred in Arizona before passage of
Collections in FY 2020 were buoyed by implementation of the
Prop. 208 will not occur or will occur elsewhere.
2019 tax omnibus, the most significant tax reform of the last 30
While acknowledging the risk posed by this tax, the Executive
years. Arizona’s income tax code was made simpler, flatter and
remains confident in the positioning of Arizona as the best place
more fair. The legislation also created a remote sellers tax,
to work and do business. For the vast majority of taxpayers, the
subjecting out-of-state sellers to the same sales taxes paid by in-
state’s overall tax burden (property, sales, and corporate and
state brick-and-mortar retailers. The Executive expects that the
individual income combined) is relatively low; government
success of this reform will continue to support State revenues
spending growth is conservative; and the state’s regulatory envi-
throughout the three-year budget window.
ronment is business-friendly. The Executive is committed to
further improving this position in the upcoming budget cycle. ACHIEVING THE FY 2021 BASELINE REVENUE FORECAST
UPSIDE POTENTIAL Overall, General Fund revenue collections are on track to

achieve or exceed the current Executive forecast. As of October
In recent years, economic growth has been strong in the West
2020, collections are up almost 20% year-over-year and remain
in general and in Arizona in particular, and that strength is likely
significantly above forecast, even after accounting for the
to continue in 2021 and beyond. Access to vaccine and therapeu-
delayed payments received in July.
tics in 2021 will serve only to fuel this growth.
The State’s Transaction Privilege Tax – the largest component
Movement to the upside could come in several forms.
of General Fund revenue and a key bellwether of state economic
First, resolution of trade frictions may unleash capital invest-
and fiscal health – has held up well during the pandemic, due in
ment that could clearly benefit all states. Arizona’s business-
large part to the remote sellers tax, which has allowed the State
welcoming environment positions the state to take advantage of
to keep up with rapidly changing consumer behavior. Fiscal year-
any form of capital expansion.
to-date growth of more than 11% through November 2020 and
Second, Arizona always benefits from the upside of a real
more than 13% ahead of the enacted FY 2021 budget forecast
estate cycle and the opportunities for steady growth in the sector,
further support the Executive’s revenue projections.
absent excesses, will help sustain the state’s economy.
Finally, it is possible that significant new federal spending - in Figure 4
the form of pandemic-related stimulus, a new infrastructure bill,
State Revenue Growth
or other new investments - could occur. To the extent that these
federal dollars follow population growth, Arizona is well posi-
tioned to take advantage of a national infrastructure investment
or stimulus program. The State was quick to work with its federal
partners to capture, for example, the temporary enhanced unem-
ployment insurance benefit and looks forward to continuing to
work to maximize the flow of productive federal dollars into
Arizona.
Overall, given 2020’s volatile performance ending with two
quarters of unprecedented GDP growth, the Executive believes
further upside risk thanks to the distribution of a COVID-19
vaccine and the pace of economic recovery to date must be
balanced against a realistic acknowledgment of the strong
performance of the State’s General Fund during this recession,
and that risk is managed by the Executive’s conservative revenue
assumptions.

This growth is also likely to increase in the coming years to align with the federal income tax deadline in July 2020, the
following the passage of Proposition 207, which legalizes the sale Executive Budget’s projections for the Individual Income Tax
of recreational marijuana and imposes a 16% excise tax that will assume that collections in FY 2021 will be significantly inflated as
fund various State programs. In addition to the excise tax, sales compared to collections in FY 2020. Conversely, apparent growth
of recreational marijuana products will also be subject to the 5% will slow somewhat in FY 2022 before resuming in the out-years.
Transaction Privilege Tax. The Executive projects this to increase Overall, considering the pace of recent revenue growth and
General Fund revenues by $2.3 million in FY 2021, followed by the tailwinds boosting Arizona’s economy, the Executive Budget
larger increases in the following years. is well positioned to meet or exceed its baseline forecast of
approximately 8.3% ongoing General Fund revenue growth in FY
Table 1
2021 and 5.3% revenue growth in FY 2022.
Prop. 207 General Fund Impacts by Fiscal Year
2021 2022 2023 2024

Internal Revenue Code Conformity
$2.3 million $13.9 million $22.6 million $33.3 million In March 2020, passage of the federal CARES Act provided for
substantial but temporary changes to the federal income tax
Table 2 code. Full conformity to those provisions would impose substan-
Prop. 207 General Fund Growth Rate Impacts tial one-time costs on the General Fund during Fiscal Years 2021
and 2022.
8-Year Avg. FY 20201 FY 20211
The Executive supports conforming to most changes - partic-
TPT 4.5% 5.8% 3.7%
ularly those affecting individuals in Arizona - so as to make filing
IIT 8.3% 2.4% -5.9%
as simple as possible for taxpayers, while carefully considering
CIT 0.8% -0.5% -1.5%
the State’s options to ensure the most competitive tax policy
across the board.
1Adjusted for the deferral of approximately $600 million in Individual Income Tax Payments
into FY 2021 from FY 2020.
The Executive prefers to reserve some of that General Fund
The flow of individual income and corporate income taxes in capacity for needed permanent income tax relief, which would
the first five months of FY 2021 displayed 29% and 16% growth, ultimately better protect small businesses and Arizona taxpayers
respectively, over flows observed in those two revenue streams while improving Arizona’s tax competitiveness.
in FY 2020. That pace puts revenue flows for each component
ahead of the enacted FY 2021 budget forecasts for the year by Income Tax Reform
14% and 35%, respectively.
To align with the federal income tax, Arizona acted to extend Every year since taking office, Governor Ducey has signed an
the filing date for individual income taxes from April to July for income tax reduction. Continuing on the promise he has made to
tax year 2020, leading to a roughly $600 million transfer, to FY reduce the income tax to as close to zero as possible, the Execu-
2021, from what would have been revenues received in FY 2020. tive is proposing substantial ongoing income tax reform to
Excluding these deferred income tax payments received in FY ensure that Arizonans and Arizona small businesses that were hit
2021 yields an estimated (5.9)% YOY growth rate for this cate- hard by the COVID-19 pandemic, through no fault of their own,
gory. However, the Executive Budget still contemplates an are given true and meaningful tax relief.
impressive 8% increase over FY 2021 budgeted values. Taxes on income stifle economic growth by shifting incen-
tives away from savings and investment. The Executive looks
Table 3 forward to partnering with the Legislature during the 2021
Historical & Projected Revenue Growth session on ways to substantially reform and reduce the income
tax, and to signing a tax reform package that makes Arizona even
8-Year Avg. FY 20201 FY 20211
more attractive to businesses, families, and individuals.
TPT 4.5% 5.8% 3.7%
To that end, the FY 2022 Executive budget reserves $200
IIT 8.3% 2.4% (5.9)%
million, phasing up to $600 million by FY 2024, for meaningful
CIT 0.8% (0.5)% (1.5)% income tax reform to help Arizona’s hardworking taxpayers
1 Adjusted for the deferral of approximately $600 million in Individual Income Tax recover from the COVID-19 pandemic and pave the way for
Payments into FY 2021 from FY 2020. growth into the future. The Executive’s position is that this tax
reform will yield additional economic activity for the state, which
Because of the volatility induced by (a) the pandemic and the will result in higher revenues and continued growth.
associated recession, (b) the one-time federal transfer payments
(some of which are taxable), and (c) the state income tax deferral

General Fund Revenue Summary
Actual Estimate Estimate Estimate Estimate

TAXES FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Individual Income 4,530,737.9 5,428,000.0 5,619,000.0 5,960,470.0 6,186,967.9
Corporate Income 511,882.0 504,000.0 580,000.0 638,000.0 673,090.0
Sales and Use 5,391,913.0 5,591,660.0 5,866,860.0 6,176,940.0 6,454,902.3
Property Taxes 24,140.0 18,800.0 20,050.0 16,430.0 17,070.0
Luxury Taxes 57,140.0 54,163.0 49,558.0 49,508.0 51,562.0
Insurance Premium Taxes 535,163.4 523,032.7 533,493.4 549,498.2 563,235.6
Estate Taxes - - - - -
Other Taxes 14,408.0 14,293.0 14,463.0 14,554.0 14,668.0
TOTAL TAXES 11,065,384.3 12,133,948.7 12,683,424.4 13,405,400.2 13,961,495.8
OTHER REVENUES
Licenses, Fees & Permits/Misc. 183,226.0 181,783.0 177,314.0 182,290.0 186,473.0
Interest Earnings 39,405.0 16,180.0 12,135.0 17,231.7 21,539.6
Lottery 103,594.7 100,520.0 131,600.0 140,290.0 149,550.0
Transfers & Reimbursements 116,450.0 64,981.0 70,240.0 75,061.0 78,781.0
TOTAL REVENUES 11,508,060.0 12,497,412.7 13,074,713.4 13,820,272.9 14,397,839.4
ADJUSTMENTS
Urban Revenue Sharing (737,574.0) (828,492.9) (756,261.0) (889,800.0) (929,850.0)
Disproportionate Share 84,949.1 91,300.0 95,000.0 95,000.0 95,000.0
Public Safety Transfers 23,344.0 23,340.0 - - -
Temporary Transaction Privilege Tax 808.0 - - - -
Scheduled Fund Transfers 90,908.0 97,033.6 36,700.0 16,700.0 16,700.0
Recommended Revenue Changes - (43,900.0) (230,212.6) (400,412.6) (600,412.6)
GRAND TOTAL REVENUES 10,970,495.1 11,836,693.4 12,219,939.8 12,641,760.3 12,979,276.8
Note : Projected impacts from previously enacted tax law changes are included in the forecast.

Other Fund Revenue Summary
(in thousands)
Actual Estimate Estimate
TAXES FY 2020 FY 2021 FY 2022
Motor Vehicle Fuel Tax 789,072.8 723,812.3 739,243.1
Property Taxes 13,883.8 12,645.4 12,645.4
Sales and Use 706,732.6 372,875.8 389,057.9
Luxury Taxes 314,681.6 301,772.4 300,766.2
Insurance Premium Taxes 40,849.8 40,648.9 40,786.2
Motor Carrier Tax (5,500.5) 23,489.0 24,560.0
Vehicle License Tax 595,259.0 672,528.2 495,575.3
Other Taxes 1,948,459.8 1,402,476.7 1,241,137.9
TOTAL TAXES 4,403,438.9 3,550,248.7 3,243,772.0
OTHER REVENUES
Licenses, Fees & Permits/Misc. 6,989,097.7 7,011,102.9 7,506,139.2
LF & P 942,407.7 1,269,722.9 1,501,256.2
S&S 6,046,690.0 5,741,380.0 6,004,883.0
Misc - - -
Interest Earnings 466,661.4 378,957.3 370,597.2
Lottery 1,844,776.0 1,915,245.1 1,915,245.1
Charges for Services 4,908,867.2 4,587,642.7 4,812,507.4
Miscellaneous Revenues 1,534,011.6 1,473,864.1 1,461,930.9
TOTAL OTHER REVENUES 15,743,413.9 15,366,812.1 16,066,419.8
TOTAL REVENUES 20,146,852.8 18,917,060.8 19,310,191.8
OTHER FINANCING SOURCES

Transfers & Reimbursements 25,795,459.8 26,017,823.7 27,781,525.1
GRAND TOTAL REVENUES 45,942,312.6 44,934,884.5 47,091,716.9
*Other Appropriated Funds Revenues include all revenues for funds which may only be partially subject to
statutory or legislative appropriation. The expenditures shown in the "Other Funds Budget Summary" are for the
appropriated portion of these funds only and may represent only a small portion of the funds' total
expenditures. There are several funds where a General Fund appropriation is deposited into an "Other
Appropriated Fund" and these deposits are reflected in the figures above; as such General and Other Fund
Revenues may not sum to total State revenue.

Fiscal Response to the COVID-19 Pandemic
To help state governments deal with the critical financial and service delivery pressures associated
with COVID-19, the federal government responded with an unprecedented level of resources.
T he federal government enacted seven measures that Department of the Treasury made direct payments to states and
provided relief funding directly to States and their residents. eligible units of local government with populations that exceeded
In chronological order, they were: 500,000.
The Coronavirus Preparedness and Response Supplemental The CARES Act required that CRF payments be used only to
cover expenses that were:
Appropriations Act, 2020;
President Trump’s national emergency declaration under necessary expenditures incurred due to the public health
emergency with respect to the Coronavirus Disease 2019
the Robert T. Stafford Disaster Relief and Emergency Assis-
(COVID-19);
tance Act which provided the Federal Emergency Manage-
ment Agency (FEMA) Public Assistance grants; not accounted for in the budget most recently approved as
The Families First Coronavirus Response Act; of March 27, 2020 (the date of enactment of the CARES Act)
for the state or government; and
The Coronavirus Aid, Relief, and Economic Security (CARES)
Act; • incurred during the period that began on March 1, 2020,
and ended on December 30, 2020 (with the passage of the
The Paycheck Protection Program and Health Care
Coronavirus Response and Relief Supplemental
Enhancement Act;
Appropriations Act, 2021, the end date was extended to
President Trump’s authorization to use the FEMA’s Disaster December 31, 2021).
Relief Fund (DRF) to establish the Lost Wages Supplemental
The amounts paid to states and eligible units of local govern-
Payment Assistance program; and
ment were based on population, with a state payment reduced
• Coronavirus Response and Relief Supplemental Appropria- by the aggregate amount of payments that were disbursed to
tions Act, 2021. eligible local governments within that state.
Arizona received a total of $35 billion in federal funds from The Office of the Governor established the following grant
these measures, excluding the recently signed Coronavirus programs in chronological order, funded by $1.86 billion in direct
Response and Relief Supplemental Appropriations Act, 2021. financial assistance pursuant to the CRF:
Arizona taxpayers earning up to $99,000/individually or Arizona Express Pay Program (see Figure 5): $150 million to
$198,000/jointly received $5.82 billion in direct Economic Impact expedite relief funding via the FEMA Public Assistance
payments from the Internal Revenue Service (IRS). Arizona busi- program. This funding provided assistance to a number of
nesses and nonprofits received direct payments of $12.24 billion public and non-profit entities such as school districts, state
from the three largest Small Business Administration (SBA) and local governments, and hospitals for testing, contact
programs, while hospitals and healthcare facilities and providers
received $1.43 billion in direct relief fund payments. (See Figure Figure 5
6, next page.) Number of Express Pay Applications and Overall Value

The largest of these seven federal funding streams has been
the CARES Act, which provided to the State of Arizona a little over
$2.6 billion spanning multiple agencies.
The State has prioritized the health and safety of its residents
and made a commitment to ensuring that Arizonans have access
to the resources needed to recover from the pandemic. Examples
of those resources include the Department of Economic Security
(DES) administering the CARES Act Supplemental Nutrition
Assistance Program (SNAP) allocation to eligible households, and
providing funding from various sources to foodbanks, municipal-
ities, or other nonprofits.
Coronavirus Relief Fund. The CARES Act established the
$150 billion Coronavirus Relief Fund (CRF), through which the U.S.

tracing, personal protective equip- Figure 6
ment, emergency communications,
Allocation of $35 Billion Federal Funding
among other critical needs.
AZCares Fund: $440.75 million for
immediate relief to Arizona cities,
towns, and counties that did not
receive a direct CRF allocation. These
dollars supported local public health
and public safety payroll costs and
provided flexibility to local entities to
reallocate their own budget
resources to other needs
AZVoteSafe: $7.6 million total for
Arizona counties to support safe
election operations and promote
voter participation during the coro-
navirus.
AZ Stay Connected Program: Figure 7
$910,000 for technology and other Allocation of CRF Direct Financial Assistance Grants
resources required by skilled nursing
facilities to help Arizona families stay
connected with loved ones confined
to those facilities.
• Enrollment Stabilization Grant Pro-
gram: $370 million to help mitigate
the pandemic’s impact on Arizona
schools during the 2020-2021 school
year.
Also, in coordination with the Arizona

Department of Health Services, $211.95
million was expended for personal pro-
tective equipment (PPE), coronavirus
tests and testing supplies, and statewide
hospital staffing needs.
Finally, State agencies were provided
$436.39 million for public health and
Figure 8
public safety personnel and employee-
related expenses (EREs), and the three Allocation of the State Crisis Contingency and Safety Net Fund
State universities were provided $115

million to assist with distance learning,
public health, coronavirus testing and
personnel expenses.
At the time of this writing, $135 mil-
lion in available funding remained.
Education Relief. As part of the fed-
eral CARES Act, Arizona was awarded
$69.2 million for the Governor’s Emer-
gency Education Relief (GEER) Fund,
which gives state governors investment
flexibility in mitigating the impacts of

COVID-19 for schools and students most Figure 9
in need. Allocation of CRF Direct Financial Relief Assistance
Arizona’s GEER plan accelerates aca-
demic achievement for students across
the state. The plan also makes a signifi-
cant investment in long-term digital
equity by investing in broadband infra-
structure and connectivity. The State of
Arizona’s GEER Fund was allocated as fol-
lows:
School Facilities Board: $40 million to
expand broadband in rural communi-
ties to bridge the digital divide con-
fronting schools.
Arizona Department of Education:
$19 million to make available, to
high-need Arizona schools and
students, math and reading special- Contingency and Safety Net Fund. These resources are to be
ists, teams of paraprofessionals, or other types of structure allocated by the Office of the Governor to provide direct relief to
for learning and remediation. communities and aid Arizonans needing eviction assistance;
Arizona Board of Regents: $6 million for the Arizona Teach- struggling small businesses, nonprofits and health care providers;
ers Academy. food banks; and the homeless population.
A for Arizona: $1.5 million for its Expansion and Innovation At the time of this writing, $4.05 million in available funding
Fund grant programs, which helped educators and school remained.
leaders expand their ongoing efforts and bolster effective AZ Coronavirus Relief Fund. As part of the Arizona Together
innovation. Initiative, Governor Ducey established the AZ Coronavirus Relief
Fund to support nonprofit organizations working to mitigate
Arizona State School for the Deaf and the Blind (ASDB): $1
COVID-19’s impact on Arizonans. The Fund is made possible by
million for vehicles to ensure that staff have safe and relia-
the generous financial donations of individuals and businesses.
ble transportation as they travel statewide to provide criti-
At the time of this writing, $9.78 million had been raised, and $1.3
cal education and services to students served by ASDB.
million in available funding remained.
Center for the Future of Arizona: $700,000 for the virtual A committee of Arizona business leaders was formed to eval-
delivery of its executive leadership training program for uate requests for support and make decisions on where funds are
school principals and leaders. directed. The committee’s focus has been on the following
Teach for America: $500,000 to provide tutoring for the immediate needs:
students most in need, in schools across Arizona most funding of Personal Protective Equipment (PPE) for front-
impacted by the pandemic. line medical personnel;
• ASU Preparatory Academy: $500,000 for the Arizona State non-profit organizations that support the most vulnerable
University’s Virtual Teacher Institute. Arizonans through food banks, homeless shelters, domestic
Crisis Contingency and Safety Net Fund. In March 2020, violence facilities, and other services; and
Governor Ducey signed a bipartisan State budget agreement that efforts to provide low-income students with technology
added $50 million for Arizona’s COVID-19 response, the Crisis enabling them to transition to online learning.

Education
The FY 2022 Executive Budget sustains the State’s robust commitment to public education, supports
focused efforts to mitigate the impacts of pandemic-related learning loss, and emphasizes school
choice, early literacy, and K-12 innovation at the local level.
The persistence of the COVID-19 pandemic resulted in

“Across our state, students have been kept out of their
delayed 2020-2021 school year start dates for many district and
classrooms for long enough. They’ve lost out on childhood
charter schools. Upon returning, many schools adopted entirely
experiences that can’t be duplicated on a computer screen.
virtual learning models. During predominantly virtual instruction,
In strange, difficult circumstances, parents and teachers
public school attendance fell far short of expectations, resulting
have done their resourceful best. But it’s time to get our
in learning loss for many Arizona students. The enrollment
students back where they belong.”
decrease in the early part of the school year has resulted in
Gov. Doug Ducey
suppressed average daily membership (ADM), the primary metric
for calculating state funding for district and charter schools.
A t the beginning of the COVID-19 pandemic in March 2020,

Arizona faced massive and unprecedented uncertainty about
what the rest of the school year would bring for all levels, from
Figure 10
Total Unweighted Average Daily Membership

kindergarten through higher education.
On March 15, in the early stages of the pandemic, Governor
Ducey and Superintendent Kathy Hoffman announced a
statewide closure of Arizona schools. Five days later, they
announced a two-week extension, which ultimately became a
closure that endured for the remainder of the school year, punc-
tuating the most damaging series of events ever to befall public
education in Arizona and the nation.
As the excruciating events of last spring unfolded, the Gover-
nor worked alongside key Legislative partners to quickly enact
H.B. 2910 into law, which protected Arizona teachers, prioritized
students, and ensured that kids continued to receive instruction Enrollment has recovered to some extent. However, lower-
even with schools closed. This legislation also provided clarity than-expected attendance in the beginning of the school year,
and flexibility on statewide testing requirements and school letter coupled with statutorily required adjustments for distance learn-
grades, gave direction on make-up days, and ensured that teaching, result in a projected formula funding decrease of $389
ers and staff saw no disruption in pay as a result of COVID-19. million. The Executive Budget anticipates that a return to trend
Over the summer, as the nation learned more about COVID- for unweighted ADM will accompany the full return to in-class-
19, the Governor continued to listen to public health experts, room instruction beginning in FY 2022.
including the Center for Disease Control and Prevention, and the Several allocations of federal dollars have been directed to
Arizona Department of Health Services. These experts, in charter and district schools to support K-12 education amid
conjunction with school leaders from all across the state, pandemic response.
informed the Governor’s Open for Learning plan, which provides The first federal stimulus bill provided $277 million of funding
schools with flexibility, resources, and data to guide their decision to directly support Arizona public schools. Additionally, the
making on how best to ensure their students receive a quality Governor’s Office allocated $370 million of discretionary Corona-
education during the current school year. virus Relief Fund monies to charter and district schools, through
Recognizing the drastic learning loss that students have faced the Enrollment Stabilization Grant (ESG) Program, based on the
in the absence of in-person instruction, the Governor has been relative impact of COVID-19 on formula funding.
clear that schools should provide options that best serve the The second federal relief package provides an additional
families who are counting on them, including in-person learning estimated $1.2 billion to Arizona public schools, bringing total
to the greatest extent possible. federal funding allocations directed to K-12 charter and district

schools since the beginning of the pandemic to more than $1.8 • Current 11th grade students -> High School seniors,
billion. August 2021
In addition to financial aid provided directly to local educa- This approach provides an additional $327 for over 278,000
tion agencies (LEAs), the Governor’s Emergency Education Relief eligible students in the priority grade bands.
(GEER) Fund has been directed towards strategic investments
that provide direct and indirect support to Arizona’s public school Table 4
system. GEER investments include:
Student Count in Priority Grade Bands
$40 million to expand broadband in rural communities and
Estimated Free-Reduced Lunch
bridge the digital divide; High-Need Grade Band
Student Count
$19 million in additional support for high-need schools;
K-3 181,800
$6 million in the Arizona Teachers Academy;
8 50,000
$1.5 million in microgrants to support innovative programs
to continue educating Arizona students; 11 46,400
$1 million for vehicles for the Arizona School for the Deaf Total 278,200
and Blind;
The Department of Education will calculate final allocations
$700,000 for leadership development through the Beat The
using the Q3 surplus estimate. The Department’s calculations will
Odds Leadership Academy;
use a methodology that budgets for potential discrepancies
$500,000 to the Helios Education Foundation for the
between Q3 surplus estimates and the final surplus total. Partici-
Arizona State University Virtual Teacher Institute; and
pating LEAs may use only Student-Focused Acceleration and
• $500,000 to Teach for America to expand the number of Support dollars to supplement Title I dollars eligible for summer
college students who work with schools that serve Arizona’s school.
most vulnerable student populations.
Figure 11
STUDENT-FOCUSED ACCELERATION AND SUPPORT
New Federal and State Funding vs. Formula Loss
The Executive Budget includes supplemental funding in FY
2021 for a remediation grant program that supports high-impact,
results-oriented intervention and programming to mitigate the
severe learning loss that has occurred since the COVID-19
pandemic began in the spring of 2020. The funding provided is
intended to be equivalent to the lower-than-budgeted State
funding formula costs resulting from a steep decline in enroll-
ment.
The Executive Budget addresses the educational crisis by
allocating all expenditure reductions resulting from equalization
formula decreases to providing for additional instruction for the
students most in need.
In the 2019-2020 school year, 595,900 Arizona students were
eligible for free and reduced-price meals. The Executive Budget
Figure 12
includes funding sufficient to provide to each district or charter
Fiscal Year Per-Pupil Spending
school that applies to extend these remediation supports to
All Sources, Inflated 2012 Dollars
students at least $500 per student eligible for free or reduced-
price meals. The Executive estimates this cost at approximately
$298 million.
Where students need critical support to stay on track in their
educational development, the remaining $91 million will be
targeted to priority grade bands as follows:
Current K-3 students -> 1-4 grade students, August 2021
Current 8th grade students -> High School freshmen,
August 2021

FULFILLING A COMMITMENT TO SCHOOLS, STUDENTS AND addresses both barriers with funding to provide transportation
TEACHERS and school choice awareness.
At a time when other states are cutting education funding, Driving Equity. When choosing the best school for their
Arizona sealed a commitment in the FY 2021 budget to fund the family, most parents do not consider academics alone; they must
final payment of 20x2020, resulting in permanent funding for a also consider the logistics of getting their child to and from the
20% increase for average teacher pay, and continued acceleration school they choose.
of District Additional Assistance (DAA) and Charter Additional Transportation issues often limit parents’ available choices, as
Assistance (CAA). do varied enrollment deadlines and policies, which can often
DAA and CAA are formula dollars that had been partially mean losing out on enrollment at their school of choice. Simply
suspended since the Great Recession. These dollars are used for put: a choice is not a choice without a way to get there.
capital and operational costs. “Driving Equity,” the Executive’s transportation and school
The FY 2019 budget charted a five-year plan to restore $371 choice solution package, removes barriers to transportation and
million in cuts to DAA and CAA. The FY 2020 accelerated the enrollment.
restoration a year ahead of schedule, and the FY 2021 budget The Executive Budget provides $9.5 million for transportation
maintained that expedited schedule. The Executive Budget keeps solution grants to support transportation innovations and effi-
the State on track to fully reverse long-standing suspensions of ciencies that expand access to school choice. The Executive
these two portions of the State Aid formula. contemplates that this program would incentivize innovative
ideas to increase access to schools of choice.
Table 5 Applicants would be encouraged to think creatively about
District Additional Assistance how to remove the barrier of transportation, and there is no one-
Millions of Dollars size-fits-all approach that would be followed. For example, these
Laws 2018, Chapter 285 Laws 2020, Chapter 49 Acceleration grants could be awarded for transportation co-ops organized by
Needed
high-achieving schools in a shared geographic area. Or, they
FY Suspension Restoration Suspension Restoration
could be used to cover the cost of providing students with public
2018 352.4 0 352.4 0
transportation, or a private sector option. Hiring parents or
2019 257.5 95.0 257.5 95.0
grandparents within the school community to run carpools could
2020 193.1 159.3 64.4 223.7
also be an option.
2021 128.7 223.7 0 288.1 64.4 Ultimately, the Executive seeks to create an opportunity for
2022 64.4 288.1 0 352.4 64.4 innovative ideas to flourish so that every family who wants to
2023 0 352.4 0 352.4 exercise their option to choose the school that best fits their
student has the means to do so.
Table 6
It is with that focus on driving equity that the grants will be
awarded, and data from this pilot will be thoroughly collected to
Charter Additional Assistance
ensure that the State learns which methods are most effective
Millions of Dollars
and efficient in achieving the important standard of access for all.
Laws 2018, Chapter 285 Laws 2020, Chapter 49 Acceleration
Needed
“OPEN FOR ALL” ENROLLMENT
FY Suspension Restoration Suspension Restoration
2018 18.7 0 18.7 0 The Executive seeks to build upon the robust school choice
2019 13.6 5.0 13.6 3.4

environment that Arizona has developed over the last three
decades by building-in supports that vastly expand opportunities
2020 10.2 8.4 6.8 11.8
for children and families.
2021 6.8 11.8 0 15.2 3.4
The next step in creating an “Open for All” state is formally
2022 3.4 15.2 0 18.7 3.4
establishing an “Open Enrollment Month,” which will provide
2023 0 18.7 0 18.7
uniform deadlines and policies to help level the playing field for
families in accessing their school of choice. The Executive Budget
EXPANDING ACCESS TO CHOICE IN ARIZONA SCHOOLS provides $500,000 for an Open Enrollment Month marketing
The Executive Budget promotes school choice by investing in campaign to inform parents about open-enrollment options.
the removal of barriers that families face when choosing the best In pursuit of greater access to the school choice options avail-
school for their children. able, Open Enrollment Month will remove unreasonably short 24-
Prominent among those barriers are transportation and and 48-hour enrollment windows or in-person requirements, and
transparent information about how and when parents can access ensure that enrollment materials are accessible in both English
additional options for their children. The Executive Budget and Spanish. Additionally, when a parent enrolls their child in

kindergarten, schools must offer students a choice and remove community that lacks consistent access to a strong signal. WSST
“default” school assignments. also created “Warrior Lab” for students who must learn during
non-traditional hours because they are caring for younger
INVESTING IN INNOVATION
siblings who are at home due to school closures. Warrior Lab also
Arizona’s education stakeholders are engaging in innovative provides WSST students with access to a quiet space to learn and
ways to improve teaching and learning at all grade levels. The FY tutors at the school property in the late afternoons and evenings
2022 Executive Budget provides funding to scale these innovative for in-person support.
approaches to benefit more students and communities across the Gowan Science Academy, a Yuma school with a long track
state. record of excellence, received a grant to create an Outdoor
Expansion and Innovation Fund Grants. The Executive Learning Hub for lessons outside the traditional classroom walls.
Budget includes funding to grow the Expansion and Innovation No schools in Yuma have such a space for nontraditional learn-
Fund, which awards grants to K-12 schools that: ing, and this outdoor dedicated classroom is an innovative
offer new ideas that require seed funding, or concept for their area of the state and reduces barriers to time
• have demonstrated proven innovation and reimagined how and place for learning.
best to serve their students. The Executive Budget increases the investment in teaching
and learning innovation by expanding the availability of targeted
During the 2020-2021 school year, the Expansion and Inno-
micro grants.
vation Fund awarded grants totaling $1.2 million to 17 charters
and seven districts that replicated, and expanded capacity for, LEARNER-CENTERED EDUCATION
successful models of schooling and instruction for their total of The Arizona Personalized Learning Network supports schools
21,000 students. that are moving to learner-centered education, focusing on the
These schools span rural, urban, and suburban campuses and successes of every child. This educational approach is designed
serve a student population that, on average, includes 78% eligi- to ensure mastery of academic content and social and emotional
bility for free and reduced-price lunch (FRL), compared to the skills, and to foster student ownership in their own learning. This
statewide average of 55%. Local leaders for those schools are is accomplished by providing a continuum of timely professional
developing creative and successful community-driven solutions learning and support that is designed to help teachers and school
to address the current challenges facing Arizona’s K-12 education leaders make the shift to personalized learning at the classroom,
system and establish new approaches to teaching and learning. building, and district/charter network levels.
The Executive Budget invests additional resources in this innova- The Executive Budget invests in this personalized education
tion-centered approach to learning, which is exemplified by the model by expanding the Network, which ultimately will provide
ingenuity of these four LEAs: multiple entry points to meet the individual needs of learning
Vail School District is working to redesign what “school” looks communities. This program will couple the professional learning
like, with a model that is flexible and adaptable, whether operat- with focused policy support to enable and sustain the organic
ing from the home or other centers around the District to utilize growth of learner-centered practices.
small learning communities based on student and family need.
“Vail HomeSchool Partnership” is a stackable public education STRENGTHENING ARIZONA’S CIVIC MUSCLE
model through which families will be able to choose which Civics Corps. The Executive Budget includes funding to
components of District support they wish to access. Further, establish the Arizona Civics Corps Pilot Program.
families who opt in will be eligible to receive special services and The program will fund an initial cohort of high school juniors
can benefit from the targeting of three subgroups of students and seniors who complete a required number of service hours
that are at greatest risk of falling behind. through a list of State Board of Education-approved private and
Arizona Autism has combined lessons learned since March nonprofit partners.
2020 to develop a best-in-class schooling experience uniquely Qualifying students will be eligible to earn a scholarship, of
designed for students on the autism spectrum and their caregiv- up to $1,000 each semester, toward the in-state postsecondary
ers. Creating a package of in-person, tele-lesson, digital student institution of their choice. The included funding establishes the
portfolios, and tele-therapy options for families requires cutting pilot program with capacity for over 450 qualifying high school
edge technology and finding or creating best practices to juniors and seniors.
support and train the adult caregivers at home. Civics Innovation Fund. The Executive Budget provides
The Western School of Science & Technology (WSST) in funding to establish the Civics Innovation Fund Grant Program,
Phoenix is another grant recipient extending its impact beyond which will make grants available to applying schools that propose
the school’s walls by providing access to a critical utility for learn- engaging ideas to inspire and educate their students on what it
ing, in and surrounding their campus community and for alumni.
WSST operates “Western Plug,” which offers 24/7 Wi-Fi to a

means to be an American, and the unique rights and responsibil- Figure 13
ities Americans share. The program will give priority to applica- Third Grade Reading Proficiency
tions from schools that are in underserved communities and
exceed basic social studies academic standards.
HIGH ACHIEVEMENT FOR EVERY ARIZONA STUDENT

Dyslexia Screening. Laws 2019, Chapter 198 requires
dyslexia screening for K-3 students in Arizona and requires all
schools that serve K-3 students to have at least one educator on
site who has completed Department of Education-approved
dyslexia training. The legislation also requires the Department to
designate a Dyslexia Specialist to provide public schools with
support and resources necessary to assist students with dyslexia.
The Executive Budget provides $1.3 million of dedicated
funding for the Department to hire a Dyslexia Specialist, Early
Literacy Specialist, and “Move On When Reading” Specialist, as
well as funding for literacy education training that will enable the 2016 Mississippi schools have attained major improvements in
Department to meet the requirements outlined in statute and overall student reading achievement, with::
more effectively identify and instruct students with dyslexia and nearly a 12-percentage-point increase in students scoring
other early literacy learning difficulties. Level 3 (passing) and above;
“Swarm” Literacy Coaching. The Executive Budget includes
a 16-percentage-point increase in students scoring Level 4
a $3.1 million funding increase to help close Arizona’s achieve-
and 5 (proficient and above); and
ment gap among key student subgroups. The additional funding
will be used to deploy 75 regional literacy coaches to the lowest- • nearly a 3-percentage-point decrease in students scoring
performing PreK-3 schools in order to provide intensive technical at the lowest achievement level (Level 1).
assistance to support, improve, and sustain effective teaching Literacy must remain a major focus in Arizona’s pre-K through
and literacy practices. 3rd grade students to help them build the foundational reading
Substantial research points to the importance of developing skills needed to be successful throughout school.
strong early literacy skills. More than one in three American Standard Kindergarten Entry Evaluation. The Executive
children start kindergarten without the skills they need to learn Budget includes $1.5 million to monitor progress of the early
to read, according to the American Academy of Pediatrics (AAP). literacy improvement initiative with a standardized state kinder-
In fact, reading proficiency by the third grade is the most garten entry evaluation. The evaluation is to be administered to
important predictor of high school graduation and career children during the first few months of their admission into
success. kindergarten, to assess and demonstrate school readiness for
This issue strikes at the very core of the achievement gap. The young learners receiving early literacy support.
AAP also reports that approximately two in three children each Foundations of Reading Evaluation. The Executive Budget
year in the United States, and 80% of those living below the recommends requiring newly certified elementary education
poverty threshold, fail to develop reading proficiency by the end teachers to pass the Foundations of Reading evaluation, ensuring
of the third grade. that all new elementary educators are equipped to implement
Based on this data, ensuring that all Arizona kids receive effective literacy education strategies. The Executive Budget
high-quality, high-efficacy literacy instruction is among the most includes $1 million to fully fund the anticipated cost associated
critical elements – if not the most critical element – of their edu- with the assessment requirement.
cation. College Placement Exam Fee Waiver. The Executive Budget
This initiative is modeled after the incredible success that includes increased funding to waive test fees for low-income
other states, particularly Mississippi, have realized thanks to a students who take examinations that qualify for college credit.
similar approach. Mississippi was number one in the country for In FY 2022, Arizona students qualifying for free and reduced-
gains in fourth-grade reading, per the most recent National price lunch are expected to take 19,044 college placement exams
Assessment of Education Progress data. The Mississippi Depart- and, after receiving other rebates and State support, paid out-of-
ment of Education provided state literacy coaches to target pocket an average of $54 per test.
schools for an average of two to three days per week. The Executive Budget provides funding to eliminate this
As demonstrated on the third-grade Mississippi Academic financial hurdle and enable qualifying students to take college
Assessment Program English Language Arts Assessment, since placement exams free of charge.

College Credit by Examination Incentive Program. The TFA attracts diverse teachers that more accurately reflect
Executive Budget includes an increase in funding for the College Arizona’s student population, and it keeps teachers in the class-
Credit by Examination Incentive Program (CCEIP). room longer. Over 92% of TFA teachers are retained after two
Established in FY 2018, CCEIP has awarded $4.2 million for years of teaching, compared to 78% of all new Arizona teachers.
13,388 passing exams. In FY 2020, the number of passing exams TFA has 136 corps members in 59 Arizona district and charter
increased to 23,432. That increase generated demand for $7.5 schools that serve 10,200 students. The average percentage of
million in incentive payments, or $2.5 million in excess of the $5 students eligible for free and reduced-price lunch (FRL) in TFA
million appropriation. Awards were prorated to account for schools is 82% (compared to the state average of 55%). In addi-
excess demand in FY 2020. tion, TFA is meeting head-on the need to address learning losses
The Executive Budget provides funding to meet the excess resulting from the ongoing public health crisis.
program demand. In fall 2020, the Executive provided TFA with $500,000 from
the Governor’s Emergency Education Relief (GEER) Fund to
INVESTING IN PROGRAMS WITH A PROVEN TRACK RECORD
launch the IGNITE Tutoring Fellowship. IGNITE focuses on third-
During this time of greater-than-normal budget uncertainty, grade reading and eighth-grade math. Its cohort of 39 tutoring
it is especially prudent to invest State funds in programs that have fellows has provided daily tutoring support for over 200 low-
a proven track record of success. Consistent with that view, the income students in Title I schools, and has delivered much-
Executive Budget provides an increase in funding for programs needed reinforcement to Arizona’s teachers. This program will
that have demonstrated successful outcomes for Arizona continue to grow by welcoming its second cohort in spring 2021.
students.
Jobs for Arizona Graduates. The Executive Budget includes Adult Education
a funding increase to expand Jobs for Arizona’s Graduates (JAG).
JAG is a non-profit organization that partners with school Arizona’s adult education program offers access to quality
districts, the business community, the public sector, and other educational opportunities that support job training, employment,
non-profits to support its mission to help young people stay in and aspiration for higher education.
school and acquire the academic, personal, leadership, and voca- Since FY 2015, the average increase in the federal allocation
tional skills they need in order to succeed after graduation. JAG for adult education has been 4.5%, yet the General Fund
currently serves more than 1,300 young people in 29 programs appropriation for adult education has remained flat. Historically,
in Arizona schools and communities. JAG participants saw the State appropriation was sufficient to meet the federal match
increases in GPA for 75% and improved attendance for 79% of requirement; however, the shortfall is projected to increase in FY
participants. 2022.
The Executive Budget increases the State’s contribution from The Executive Budget includes an increase of $364,100 to
$100,000 to $500,000. The Executive estimates that this $400,000 enable the Arizona Department of Education to continue to meet
increase will fund an additional 500 students and create new JAG State match requirements for federal dollars that support adult
programs across the State. education. The Executive Budget also includes funding to meet
Developing New Teachers. Established in FY 2007 and non-federal match requirements and avoid a shortfall that may
authorized by A.R.S. § 15-552, the Alternative Teacher Develop- have resulted in a reduction of federal funding.
ment Program accelerates the process of identifying, training,

and placing highly qualified individuals into low-income schools. Building Renewal and New School Construction
The Executive Budget doubles the State’s investment in this
BUILDING RENEWAL GRANTS
program.
Historically, the State Board of Education has awarded The Executive Budget includes an increase of $102.5 million
for one-time building renewal funding. When combined with the
program funding to the Teach for America - Phoenix (TFA)
ongoing budget of $16.7 million, the FY 2022 increased funding
program, which has demonstrated success in improving student
will make available to the School Facilities Board a total of $119
achievement. TFA reports that 71% of its first- and second-year
million for building renewal grants, a 11.2% increase over the
teachers improved student academic growth by one to one-
hand-a-half grade levels. $107.5 million appropriated in FY 2021.
To receive the funding, TFA matched the State grant alloca- Building renewal grant application data from the past five
years was used to project application growth for FY 2022.
tion with an equal or greater amount of private-sector funding.
The Executive Budget includes supplemental funding of $38.7
The Executive intends that TFA will match the additional
million for the Building Renewal Grant fund. Demand for renewal
investment.
projects has exceeded previous expectations, with projected
construction costs associated with projects in design exceeding

the current funding and potentially depleting all funds as early as Higher Education
March 2021.
The Executive Budget makes permanent investments in the
NEW SCHOOL CONSTRUCTION State’s public universities to expand their capacity for graduating
The Executive Budget includes funding of $52.6 million in new students prepared for the New Economy.
school construction. Workforce Development for the New Economy. The FY
Laws 2019, Chapter 265 requires new school capital funding 2021 Executive Budget sought to make an ongoing $35 million
if projections indicate that a school or additional space will be General Fund investment to advance the university system’s
needed within two years. ability to operate. This investment will::
The Executive projects that five new schools will reach capac- Boost post-secondary attainment;
ity in FY 2023 and has included funding that reflects the 2.76%
Increase the number of graduates in critical high-demand
inflation adjustment adopted by the Joint Legislative Budget
industries such as coding, artificial intelligence, and entre-
Committee at its December 2020 meeting. Additionally, the
preneurism; and
Executive Budget includes the second installment of funding for
• Reduce the time required to obtain a degree by moderniz-
two schools that were funded beginning in FY 2021.
ing curriculums and programs.
Table 7 The FY 2022 Executive Budget honors that commitment with
New School Construction – FY 2022 Approvals an ongoing $35 million General Fund increase for FY 2022 and
beyond.
School District Fiscal Year at FY 2022 Funding Using
Capacity Inflation of 2.76% Coronavirus-Related Funding. In recognition of the
Queen Creek Unified 2023 $ 12,425,108

important role that Arizona’s three public universities have
played in the state’s ongoing efforts to contain COVID-19, the
Liberty Elementary 2023 6,599,208
Executive Budget provides $115 million:
Sahuarita Unified 2023 5,715,808
Vail Unified 2023 5,502,819
$46 million for Arizona State University,
Tanque Verde Unified 2023 1,428,894 $46 million for the University of Arizona, and
Site Conditions 2023 9,460,000 • $23 million for Northern Arizona University.
Total $ 41,131,837
This funding, which comes from the federal Coronavirus
Relief Fund, will help cover some of the universities’ costs that
Table 8
were directly COVID-related, including testing and mitigation
New Schools Under Construction efforts, increased distance learning, student outreach, furlough
School District Fiscal Year at FY 2022 Funding Using prevention, and more.
Capacity Inflation of 2.76% Teachers Academy Update. The Arizona Teachers Academy
Chandler 2022 $ 8,789,500 continues to see sustainable growth in the participation of
Tanque Verde Unified 2022 2,941,400 prospective Arizona teachers. FY 2021 participation increased by
Total $ 11,730,900 over 61% from the prior year, with 3,173 students participating in
the fall 2020 semester. Fall 2020 also saw the largest year-over-
year participation increase of Teachers Academy inductions to
date, with 745 new participants committed to educating Arizona
students.

Table 9 Community Colleges
Total Enrollment in Teachers Academies
IMPACT OF PROPOSITION 207 ON THE COMMUNITY
2017- 2018- 2019- Fall COLLEGE SYSTEM
2018 2019 2020 2020
Proposition 207 legalizes the sale of recreational marijuana
ASU Sophomore 2 3 15 12
for adults 21 and older and imposes a 16% excise tax on recrea-
Junior 24 87 376 321
tional marijuana and marijuana products.
Senior 71 109 436 616
Community Colleges will receive 33% of all monies that are
Graduate 66 90 149 191
included in the 16% excise tax, with funding intended for invest-
Induction 408
ment in workforce development programs, job training, career
Non-Degree 2 1 9
and technical education, and Science, Technology, Engineering,
NAU Freshman 4 10 128 139 and Math (STEM) programs.
Sophomore 11 31 151 138 The by-district distribution is detailed in Table 10, which illus-
Junior 40 68 222 186 trates the projected breakdown of Prop. 207 funding based on
Senior 4 52 311 238 projections from the Department of Revenue.
Graduate 88 111
UA Freshman 1
Table 10
Sophomore 9 5
Community College Proposition 207 Distribution
Junior 38 41
Senior 52 80 District FY 2021 FY 2022 FY 2023 FY 2024
Graduate 15 28 55 93 Cochise $90,765 $1,104,658 $1,861,466 $2,788,701
Induction 93 Coconino $44,476 $541,296 $912,142 $1,366,499
Non-Degree 1 Gila $11,420 $138,992 $246,393 $350,885
Maricopa Comm. Non-Degree 200 241 Graham $49,993 $608,438 $1,025,283 $1,535,997
Colleges Maricopa $812,780 $9,891,926 $16,668,953 $24,972,104
Pima Community Non-Degree 127 95 Mohave $50,251 $611,574 $1,030,568 $1,543,915
Colleges
Navajo $41,794 $508,652 $857,133 $1,284,089
National Board 340 164
Pima $184,995 $2,251,480 $3,793,985 $5,683,847
Certification
Pinal $62,690 $762,963 $1,285,674 $1,926,095
Totals 239 479 2,707 3,173
Santa Cruz $5,412 $65,864 $123,163 $166,272
Yavapai $63,720 $775,508 $1,306,813 $1,957,764
Yuma/La Paz $81,114 $987,196 $1,663,530 $2,492,169
Total $ 1,499,410 $ 18,248,547 $ 30,775,104 $ 46,068,339

Health and Welfare
State Government’s fundamental purposes include providing critical services and support for the
health and wellness of all Arizonans.
“Since the start of the pandemic, we have worked closely PROPOSITION 207 PUBLIC HEALTH INITIATIVES
with community partners, health care leaders and medical
Voter approval of Proposition 207 in November 2020 created
professionals to take every step necessary to protect
two new ADHS funds – the Smart and Safe Arizona Fund and the
Arizonans, especially vulnerable individuals. With the arrival
Justice Reinvestment Fund – to support statewide public health
of COVID-19 vaccine doses, there is light at the end of the
initiatives. The Executive Budget provides the following uses of
tunnel. But we need to remain vigilant and continue to
the new ADHS funds:
follow health precautions to protect one another and limit
1. Address the Structural Deficit in the Emergency
the spread of COVID-19.”
Medical Services Operating Fund. The Emergency Medical
Gov. Doug Ducey Services (EMS) Operating Fund has historically operated at a
structural deficit, due in part to the Fund’s support of two
T
programs:
he State of Arizona is transforming the way business is done
in state government — emphasizing customer service and the High-Risk Perinatal Program, which provides home
putting real people first in the areas of public health, child safety visits and transportation to families with newborns deter-
and foster care, veterans’ care, and assistance for low-income mined to be high-risk after birth; and
individuals and families. • the State Loan Repayment Program, which provides
The FY 2022 Executive Budget addresses issues related to student loan repayment for medical professionals who
long-term care, specific public health initiatives, expanded hous- work in rural and medically underserved parts of the State.
ing and other services for veterans, access to child care, substance
The Executive Budget shifts ADHS support of local emer-
use disorder treatment, and responding to caseload growth for
gency services councils from the EMS Operating Fund to the
vulnerable adults and the developmentally disabled.
Smart and Safe Arizona Fund in FY 2022, and permanently shifts
this special line item to the Justice Reinvestment Fund in FY 2023.
Health Services Permanently shifting these programs from the EMS Operating
LONG-TERM CARE Fund will eliminate the Fund’s structural deficit and enhance
ADHS’s capacity to provide statewide emergency services.
Long-term care facility surveyors are responsible for review-
2. Implement a Suicide Mortality Review Team. Laws 2020,
ing complaints about rule violations and the quality of care at 159
Chapter 4, require ADHS to implement a Suicide Mortality Review
long-term care facilities in Arizona. The Facility Surveyor Division
Team to collect and analyze data on each suicide that occurs in
currently employs 23 long-term care surveyors who investigate
Arizona; identify suicide and self-harm hot spots and trends; and
approximately 2,480 cases per year.
inform policy decisions intended to improve mental health
A 2019 study by the Auditor General found that due to the
outcomes. The Executive Budget supports the Team from the
high caseload assigned to each surveyor, only 54% of cases open
Smart and Safe Arizona Fund in FY 2022 and FY 2023, shifting
at the beginning of the study had been resolved during the nine-
permanently to the Justice Reinvestment Fund in FY 2024.
month study period.
3. Expand the Child Fatality Review Team. The Child Fatal-
The FY 2022 Executive Budget includes an increase in funding
ity Review Team collects and analyzes data on each child fatality
for the payroll and operating costs of five team leads and 27
that occurs in Arizona, to better inform policy decisions made to
long-term care facility surveyors at the Department of Health
improve child mortality statewide. Additional funding will help
Services (DHS) Facility Surveyor Division.
the Team address increased reporting requirements that have
By expanding the number of surveyors, the Executive Budget
resulted from changes in federal guidance, increased complexi-
will reduce the expected annual caseload from 108 per surveyor
ties in child fatality cases, and new COVID-19 investigative
to 45, which will in turn enhance the Division’s ability to respond
processes.
to complaints in an efficient and timely manner and protect the
The Executive Budget adds 2.0 FTE to engage stakeholders,
safety and welfare of a vulnerable segment of Arizona’s
develop statewide reports, and present recommendations to the
population.

Legislature. The additional funding will also support local review $105 million for staffing support for public health and
teams. safety employees. This consists of payroll offsets at DHS
4. Expand the High-Risk Perinatal Program. The High-Risk and at hospitals statewide to bolster spending capacity.
Perinatal Program (HRPP) provides home visitation services to $36 million for public health expenses. This additional fiscal
families of newborns who have spent time in the Newborn Inten- support went to various programs statewide whose scope
sive Care Unit or are at higher risk of developmental complica- of work was affected by COVID-19, including immunization
tions. and vaccination management programs for children, recre-
The U.S. Department of Health and Human Services recom- ation for children, education, violence prevention services,
mends that newborns enrolled in the HRPP receive at least four and support to individuals with HIV/AIDS.
home visits in their first year, to monitor their health and identify
$29.2 million for medical expenses, including warm beds
signs that may indicate the need for early intervention services.
and post-acute beds, and funding to hire additional nursing
HRPP is not meeting the four-visit benchmark; in FY 2020,
and medical staff, establish alternate care sites, and provide
enrolled families received an average of two home visits in the
palliative care to patients.
first year.
The Executive Budget calls for the HRPP to be supported by $2.8 million for administrative expenses, including ware-
the Justice Reinvestment Fund beginning in FY 2022, covering the housing costs associated with storing PPE and other equip-
cost of 1,000 additional visits each year, or one additional visit ment and IT, legal, and other administrative expenses.
per year for one-third of enrolled families.

Figure 14
PUBLIC HEALTH EMERGENCY FUND Sources of Funding

Since the start of the COVID-19 pandemic, DHS has received
$587 million in response to the emergency. Resources used in the
response include the Public Health Emergency Fund, federal
CARES Act funding, transfers of Coronavirus Relief Funds to the
Department from the Governor’s Office, and Express Pay monies
used to expedite reimbursement on funds that are eligible for
reimbursement through the FEMA Public Assistance Program.
In March 2020, the State Legislature authorized an emer-
gency appropriation of $55.5 million to the DHS Public Health
Emergency Fund to support the Department’s response to
COVID-19. To date, it has spent $36.2 million from the Public
Health Emergency Fund on the following:
$18.1 million for testing and tracing efforts;
$10.7 million for additional medical support to hospitals
and warm sites;
$7.2 million for PPE and equipment costs; and
• $246,500 for support services.
The table below breaks out expenditures, by source, since the

emergency was declared in March. Expenditures total $587
million and include:
$252.2 million for testing and contact tracing. This includes
any activity related to expanding capacity to perform tests,
studying the epidemiology of the virus, controlling the
spread, providing contact tracing services to inform indi-
viduals if they may have been exposed, and vaccination
management.
$149.2 million for personal protective equipment (PPE),
including the provision of masks, face shields, and ventila-
tors.

VETERANS’ HOMES The Executive Budget places a premium on access to this crit-
The Executive Budget includes several initiatives that support ical workforce program by sustaining the elimination of the wait-
expansion and enhancement of services for the State’s veterans’ list, so that every eligible working parent can access the child care
homes, which provide nursing and rehabilitative care for geriatric subsidy program for their children, resulting in an additional
and chronically ill veterans and their dependent or surviving 3,000 children per month in quality child care in FY 2022.
spouses. Another improvement to this program is increasing the
The Department of Veterans’ Services operates two homes in number of paid absences for which the State reimburses child
Tucson and Phoenix, and two homes are under construction in care providers. That increase is consistent with CCDF federal
Flagstaff and Yuma. Construction of the Flagstaff and Yuma guidelines; ensures that more providers will enroll more families
homes began in June 2019 and is currently ahead of schedule for that receive CCDF support; and helps children who are sick to stay
completion by June 2021. at home without families risking disenrollment from the program.
The Executive Budget includes an increase for the operating Targeted Child Care Pilot Program. Many parents who are
costs of the two new homes, which will help the homes complete seeking to increase skills to move toward greater self-sufficiency
the U.S. Department of Veterans Affairs’ six-month process to and higher-income jobs are unable to pursue advanced educa-
certification. The Executive Budget also includes funding that will tion and training due to a lack of safe, affordable, quality child
allow the current homes to serve more veterans and to offer care.
rehabilitative services, such as physical, speech, and occupational By working with public universities and community colleges,
therapy, to more veterans. grants up to 165% of the federal poverty level will be awarded for
child care to students of nursing or early childhood education.
Assistance to Children, Families, This will empower parents to work toward greater self-sufficiency
while also meeting needs in Arizona for jobs in Arizona.
and At-Risk Adults
The pilot program will last for 12 months and be evaluated at
The Department of Economic Security (DES) and other State the conclusion.
agencies provide temporary assistance to persons in need,
APS CASELOAD GROWTH
protect Arizona’s most vulnerable citizens, and help low-income
working families and persons with disabilities achieve independ- DES reports a 20% increase in Adult Protective Services (APS)
ence. The Executive Budget supports that mission. cases in 2020 and projects the growth to continue at 17% for
2021 (3,500 cases) and 2022 (4,000 cases). COVID-19 cases and
INCREASING ACCESS TO CHILD CARE other baseline growth have contributed to the increase in the
The Child Care and Development Fund (CCDF) provides number of vulnerable adults, and the agency is falling short of
subsidies that help low-income working families and foster the national standard for caseload management.
parents afford child care. The child care subsidy program admin- The National Adult Protective Services Association (NASPSA)
istered by the Department of Economic Security (DES) is available recommends that, to achieve “adequate attention” to each case,
to: state agencies should maintain an average caseload of 25 cases
low-income parents who are working; per caseworker. Arizona’s average caseload is 33.
The Executive Budget includes $2.9 million to add 36 investi-
teen parents in high school or general education develop-
gators and 10 support staff (five managers and five case aides) at
ment (GED) classes; and
Adult Protective Services (APS). The additional staff, combined
• residents of homeless or domestic violence shelters.
with planned improvements in investigative efficiency, will help
Both the March 2020 federal CARES Act and the December meet the growing caseload and bring APS’s average caseload in
2020 Consolidated Appropriations Act appropriated additional
supplemental CCDF discretionary funding to help states prevent, Figure 15
prepare for, and respond to COVID-19, and expand flexibility in Population Growth and APS Reports
providing child care assistance to families and children.
Because of these federal appropriations, the Executive
Budget includes $92.7 million in supplemental funding for FY
2021 due to COVID-19 relief programs for child care providers.
At the time of this writing the Executive is developing additional
proposals for the new CCDF funds that were included as part of
the latest federal COVID-19 relief bill.

line with the NASPA benchmark. Moreover, the staffing enhance- the enhanced Federal Medical Assistance Percentages (FMAP)
ment will help expedite the processing time for APS cases, so that rates.
seniors and vulnerable adults receive needed help sooner.
CAPITATION RATE ADJUSTMENTS
In addition to this funding, the Executive Budget includes an
increase of $1.5 million to raise rates for Aging and Adult Services The Executive Budget reflects capitation rate adjustments in
providers, to reduce high turnover rates and enhance access by FY 2021. Rates for ALTCS capitation payments increased by
vulnerable and homebound adults to consistent quality care. 11.25% compared to FY 2020 rates.
The large increase is attributed to increased utilization and
COVID-19 ASSISTANCE the additional costs that providers have incurred to safely
During FY 2020 and FY 2021, the Executive made funding respond to COVID-19. Future growth is expected to normalize
available to a range of providers, with the objective of stabilizing and increase based mainly on growth in population.
the social safety net during the pandemic. This funding
FEDERAL ASSISTANCE FOR MEDICAID PROGRAMS
supported providers as they (a) changed the way they cared for
their clients to protect them from contracting COVID-19 or (b) Public Health Emergency Declaration. The Families First
saw a decrease in utilization due to individual isolation. Coronavirus Response Act (FFCRA) provided states with a tempo-
Funding included: rary 6.2% increase in the regular FMAP in effect from January 1,
2020, through the last day of the calendar quarter in which the
$35.4 million General Fund ($139.5 million Total Funds) for
public health emergency terminates.
DES to provide a temporary rate increase, incentive
On October 2, 2020, the U.S. Department of Health and
payments, and COVID-positive rates to 527 providers in the
Human Services renewed its public health emergency declara-
Division of Developmental Disabilities (DDD).
tion, effective October 23, 2020, extending the emergency
$130 million from the Child Care Development Fund for
through January 20, 2021. Therefore, the enhanced FMAP will
DES to provide enrichment center stabilization for essential
exist until at least March 31, 2021.
care workers, to give grants and additional support to
Due to the FFCRA’s maintenance of effort (MOE) require-
providers who are open during the pandemic, and to
ments, AHCCCS must maintain coverage for all members during
suspend the child care waitlist.
the current public health emergency, regardless of any regular
$5.7 million General Fund ($37.1 million Total Funds) for the eligibility status loss. Becoming ineligible because of a rise in
Arizona Health Care Cost Containment System (AHCCCS) to income, for example, would not remove a member from a Medi-
provide a temporary rate increase for nursing facilities, caid-supported program until the end of the emergency.
alternative living facilities, and Home and Community The MOE requirement has caused significant growth in the
Based Services providers for the elderly and physically AHCCCS caseload since April 2020. In preparing the FY 2022
disabled. Executive Budget, the Executive had estimated that, after the
$44.5 million General Fund ($187 million Total Funds) for MOE requirement expires, AHCCCS would need at least six
DDD, as providers and members have been affected by months, from February 2021 to July 2021, to gradually remove
COVID-19. Assistance was provided through incentive the MOE populations who become ineligible under the standard
payments, general rate increases, and COVID-19 rate eligibility requirement.
increases. This assistance gave providers stability as they The Executive is revisiting these assumptions as a result of the
changed the way they cared for DD members. extension of the federal public health emergency declaration.
AHCCCS FMAP Savings. Based on the current public health
THE JOHNSON CASE emergency period and the projection of caseload expenditures,
In June 2020, the Arizona Court of Appeals ordered DES to the temporary FMAP increase would offset the expenditures
comply with its ruling in Johnson v. Arizona Department of growth caused by the MOE requirements.
Economic Security. The agency was required to adjust its rules to After accounting for an estimated typical year General Fund
require that: reversion from AHCCCS of $50 million and reimbursing $23
a disability be manifested rather than diagnosed before a million in provider COVID-19 vaccine administration costs in FY
claimant turns 18; and 2021, the Executive Budget anticipates that an additional $141
million in FMAP savings will accrue to the General Fund. (That
• a claimant prove only a cognitive disability, regardless of
estimate is subject to any extensions of the public health
the origin of impairment.
emergency declaration.)
The Executive Budget includes funding in anticipation of
adjustments to affected populations served by DES, including an
increase of 1,000 members to the Arizona Long Term Care
System (ALTCS) FY 2022. Any impacts in FY 2021 are covered by

DES FMAP Savings. The savings projection will be Figure 16
reevaluated if as January 20, 2021 approaches, the U.S. Current Title IV-E Funding for Group Home Placements
Department of Health and Human Services announces another
public health emergency extension, which would likely lead to
substantial General Fund savings.
Caseload growth is expected to return to the regular trend
line at the end of FY 2021 and continue at a stable rate in FY 2022.
Table 11
AHCCCS Caseload and FMAP Savings

Savings Are Shown in Millions
Caseload Est. MOE Enhanced Associated GF

Growth, 10/19 Contribution FMAP Savings by FY
to 10/20 to Growth 2021 Pop.
Traditional 76,133 86,344 76.21% $ 144.7

Medicaid
Service
Prop. 204 54,540 43,838 76.21% $2.0 Figure 17
Service
ALTCS -2,141 -3,238 76.21% $60.4 FFPSA Title IV-E Funding for Group Home Placements
ACA Adult 39,207 35,247 90%

Expansion
Kids Care 8,119 7,352 83.35%
Comp. Medical 329 76.21% $7.9

and Dental Plan
AHCCCS OPIOID TREATMENT

In 2018, Governor Ducey signed, with unanimous Legislative
support, the Arizona Opioid Epidemic Act following a special
session of the Arizona Legislature (Laws 2018, 1st Special Session,
Chapter 1). The Act established the Substance Use Disorder
Services (SUDS) Fund and made a one-time $10 million General
Fund deposit into the Fund.
Per Table 12, from FY 2018 through October 2020, AHCCCS
used the funding to provide nearly 55,000 substance use disorder opioid treatment services as intended in the Opioid Epidemic Act
treatment services (such as copays, doctor visits, lab tests, and for an additional 18,000 individuals.
methadone administration) to 33,329 underinsured or uninsured
individuals who are not eligible for Medicaid. CHILD SAFETY AND FFPSA IMPLEMENTATION
The Department of Child Safety (DCS) continues to prepare
Table 12
for the October 1, 2021, implementation of the Family First
Individuals Served by SUDS Fund Prevention Services Act (FFPSA) as required by the federal Bipar-
tisan Budget Act of 2018.
TRBHA/RBHA Area Served Individuals Served
The Department’s preparation efforts include placement
Mercy Care Central Arizona 14,832
array development, development of Qualified Residential Treat-
Steward Health Choice AZ Northern Arizona 13,706
ment Programs (QRTP), and qualifying prevention services for
Ariz. Complete Health Southern Arizona 4,372
reasonable candidates.
Gila River Health Care - 256
In addition, DCS has been working to improve support for
Pascua Yaqui Tribe - 163
kinship placements, foster families, and youth transition from the
Total 33,329
extended foster care program to adulthood.
FFPSA emphasizes the importance of raising children in
The FY 2022 Executive Budget includes a one-time transfer of
families and helps ensure that, when out-of-home placement is
$6 million, from the Prescription Drug Rebate Fund to the SUDS
necessary, children are placed in the least restrictive, most family-
Fund, to continue providing access to opioid treatment services
like setting appropriate for their needs. The law also seeks to
for eligible Arizonans. This $6 million will allow for continued

improve the well-being of children already in foster care by alter- As part of the AHCCCS Complete Care plans, CHP will allow
ing Federal Title IV-E reimbursement requirements for children DCS caseworkers and other staff to have close proximity and real-
placed in congregate care settings. time access to the child’s information and provide higher quality,
The Executive Budget includes an increase in funding to more timely medical, dental, and behavioral health services to
support FFPSA implementation and to address revenue needs for foster children and families.
congregate care placements resulting from the Federal Title IV-E The Executive Budget proposes a new appropriation structure
reimbursement changes enacted by FFPSA. to support CHP implementation and provide further transparency
and oversight of the program. Currently, DCS is required to
FOSTER CARE
submit all line-item transfers to the Joint Legislative Budget
Pursuant to Laws 2019, Chapter 305, on April 1, 2021, DCS will Committee (JLBC) for review. The Executive Budget specifically
implement integration of behavioral health services for foster omits this requirement for the four new special line items, as
children with the Department’s Comprehensive Medical and health plans are dynamic in nature and require more flexibility.
Dental Program. The integrated program will become known as
the Comprehensive Health Plan (CHP).

Public Safety
The FY 2022 Executive Budget provides the resources necessary to deliver on the promise of secure
communities and public safety throughout Arizona by addressing essential needs in law
enforcement and Arizona’s corrections, rehabilitation and reentry system.
The microwave equipment used to support this network is

“The safety and protection of all Arizona communities
aging and has not been supported by the private sector for
remains top of mind. We will continue to work with public
approximately 20 years. As a result, DPS has found it difficult to
safety leaders and support the men and women who protect
find replacement parts for system repairs, and the risk of critical
others. My sincere thanks to the police officers, firefighters,
system failure has grown.
EMTs, Arizona National Guard members and all heroes who
The immediate concern is the age of the existing analog
work incredibly hard to ensure Arizonans keep Arizonans
microwave radio equipment. The soonest possible replacement
safe and ensure they have the resources they need.”
should be attempted to avoid catastrophic failure of the analog
Gov. Doug Ducey
network, which would render a large portion of the state without
emergency communications for first responders to call for help
In fulfilling the State’s core function of protecting the public, the or to be dispatched to help the general public.
Executive Budget makes strategic law enforcement investments Another significant concern is Federal Communications
to modernize police communications infrastructure, resolve over- Commission (FCC) frequency retention and availability. The North
time pay issues for Department of Public Safety (DPS) State Loop Design Project included securing microwave licenses with
Troopers, and boost DPS recruitment efforts. the FCC, but rights to the frequencies are guaranteed for only the
The Executive Budget also addresses critical building renewal first year. After the first approval period has ended without the
and capital needs for Arizona’s system of corrections, rehabilita- frequency being reported in active use, other network owners can
tion and reentry, including the deactivation of the Florence petition the FCC to claim the frequency.
prison, modernizing correctional officers’ communication and Land availability on mountaintop sites is another time-
safety equipment, and continuing efforts to reduce the rate of sensitive consideration. Land use can be both physically limited
recidivism. and radio frequency limited. Some mountaintops may have little
physical spaces that work for a line-of-site microwave link to
Law Enforcement adjacent DPS sites. If another entity were to secure permissions
to use that specific land, a different tower configuration may be
MODERNIZING COMMUNICATION INFRASTRUCTURE required, or, in extreme cases, a site may become unusable. As
The Executive Budget advance-appropriates $16.2 million in radio traffic increases at some sites and interference issues
FY 2022, $16 million in FY 2023, and $16 million in FY 2024 from become more prevalent, obtaining frequency approvals for land
the Arizona Highway Patrol Fund to complete upgrades to the mobile radio and system expansion will become more difficult.
microwave radio communications system backbone. The appro- This funding will pay for the remaining necessary upgrades
priations will lapse after two years, consistent with capital appro- to the radio backbone and the construction of 10 new microwave
priations. sites that will improve signal quality. The microwave backbone
DPS owns, operates, and maintains a statewide microwave upgrade project is anticipated to be completed in FY 2024 at a
network that provides critical radio communications for over total cost of $49.2 million. Of that cost, $150,000 is expected to
12,000 users, including 12 State agencies and a number of local, be ongoing for additional land lease purposes and $355,600 is
federal, and tribal agencies. expected to be ongoing for FTE positions.
The State’s microwave radio system is divided into three
FUNDING BODY CAMERAS FOR TROOPERS
components, known as “loops”: southern, western, and northern.
Upgrades to the southern and western loops were completed in The Executive Budget includes an increase in funding for the
FY 2011 and FY 2018, respectively. The FY 2019 budget included purchase of body camera equipment and for expenses associated
$1.3 million from the Public Safety Equipment Fund to help fund with staffing, software licenses, and other increased costs associ-
an estimated $13.7 million of upgrades to the northern loop. ated with operating the program.
The existing network consists of 80 analog sites and 34 digital In order to enhance trooper safety, improve efficiency, and
sites, the majority of which are in southern Arizona. promote public transparency, the appropriation will fund the
purchase of 2,400 body cameras for the Department’s sworn

personnel and other agency personnel assigned to DPS task overtime needs, make its overtime more competitive with local
forces. This equates to two cameras per employee, so that one entities, and cover the cost of increased overtime hours.
camera is always available during uploading of video to the cloud.
BOOSTING DPS RECRUITING EFFORTS
This issue also includes 29.0 additional FTE positions:
In past years, DPS has been unable to fill allocated cadet
4.0 FTE supervisors to oversee training, contract, equip-
trooper slots at the State Trooper Academy (see graph below). In
ment, policy, procedures, video review, and other aspects
each of the two most recent classes, DPS could fill only 26 of 52
of the program;
Cadet State Trooper slots at the Academy.
5.0 FTE IT engineers and support;
In CY 2017, DPS converted from mixed-agency classes, with
15.0 FTE video management positions; and Basic and Advanced sections, to the 29-week State Trooper Acad-
• 1.0 FTE project administrative assistant. emy comprised of only DPS Cadet State Troopers. Before FY 2017,
there was not a set number of seats that DPS had to fill.
The additional FTE total also accommodates training and
DPS currently operates with a $50,000 annual recruitment
administration, which will produce a cost burden equivalent to
budget, which funds registration fees, travel expenses, and over-
4.0 full-time FTE positions.
time to attend in-state and out-of-state recruiting events. The
DPS will establish best practices and training policies for the
Executive Budget adds $426,600 to aid DPS in recruiting addi-
use of body cameras in the field.
tional cadets for the academy.
FUNDING OVERTIME AT DPS DPS will use its enhanced recruitment budget of $476,600 to
DPS troopers are often required to extend their shifts when pay for outside services for ad tracking, engagement, and
responding to collisions, protests, rallies, storms, and other emer- purchases. DPS also plans to hire an advertising tracking and
gencies, and when completing investigations. engagement consultant within 90 days after funding is author-
To compensate troopers for overtime hours worked, current ized.
practice is for them to “adjust out” their week by taking a corre- In addition, the Recruitment Unit plans to attend 10 events
sponding amount of time off or by taking off the overtime hours (such as job fairs and recruitment events). FY 2022 funding for
as compensatory time. This system often results in Friday shifts this initiative will expand recruitment to three events per month,
being short-staffed, creating service gaps during rush hour. at least two of which will be out of state, at large military base
In FY 2020, DPS allocated 1.7% of its overall Personal Services Transition Assistance Programs offices. Funding will also provide
budget for overtime expenses, but that budgeted amount was attendance fees for at least one law enforcement job fair per
insufficient to cover the Department’s actual overtime expenses. month. In addition, DPS plans to recruit at historically black
Additionally, an analysis of some municipalities’ overtime colleges and universities to ensure that State Troopers accurately
budgets revealed that their overtime as a percentage of salaries represent the community they serve and protect.
and wages was at 4.9%.
Figure 18
As of September 29, 2020, DPS had spent its full budgeted
amount in overtime for FY 2021. Due to civil unrest, employees Trooper Academy Attendance by Year
could not adjust-out their week.
”Adjusting out” means that if a trooper has reached the
number of hours they can work, they normally do not go in to
work for the rest of the week. This policy reduces, but does not
eliminate, the use of overtime. For example, if a trooper normally
works four 10-hour days and works a 12-hour day on their third
day, they will work just eight hours on their fourth day to reach
40 hours. If this same trooper works 12 hours on their fourth day,
they will get two hours of overtime. DPS estimates that, for
calendar year 2020, approximately 87,004 hours were adjusted
out. That total equates to about 41.8 FTE positions.
The Executive Budget provides $6.6 million to fund DPS over-
time expenses, including compensatory time, eliminating the
need for officers to adjust out, and improving employee morale
and retention. The dedicated funding will alleviate service gaps
and other issues associated with short staffing, reduce the
Department’s reliance on vacancy savings in order to meet its

Corrections, Rehabilitation and Reentry Facilities Condition Index, any building beyond the 60% threshold
warrants full replacement. Estimated costs from similarly-sized
PRISON SAFETY prisons in other states have reached $800 million.
Sound management and stewardship of the State’s adult The additional staff from the Florence prison will allow the
corrections, rehabilitation and reentry system is a prudent invest- Eyman complex to become fully staffed, eliminating the Correc-
ment in safety for Correctional Officers, inmates, and the general tional Officer II vacancy rate and providing inmates with better
public. Effective prison administration also benefits inmates and access to programs and other services in a safe environment.
the public by reducing the rate of recidivism. Safe, improved, and consistent access to programming opportu-
The FY 2022 Executive Budget includes $79.7 million in new nities will allow inmates to receive the support and education
funding for the Department of Corrections, Rehabilitation and they need to reform and become productive members of society.
Reentry (ADCRR): Furthermore, the deactivation will allow the health care vendor to
relocate its health care staff to reduce staffing shortages and
$53.7 million in building renewal and capital management
alleviate strain on current staff. This will result in better inmate
funding;
health care.
$17.9 million for bed management;
For inmates who cannot be transferred within the existing
$5 million for recidivism reduction initiatives ADCRR system, a third-party partner will be chosen to provide
• $2.8 million for staff safety equipment; and additional bed management capacity for the Department. The
partner will be carefully selected to ensure that the level of safety,
• $250,000 for Other Projects.
care, and services remain consistent, to continue the progress of
BED MANAGEMENT STRATEGY inmate rehabilitation. ADCRR will verify that the services offered
In an effort to address staffing shortages and enhance overall by the partner are comparable to those provided to inmates in
officer safety, the Executive has evaluated the current situation at ADCRR’s own facilities (e.g., medical, dental, visitation, mental
the Florence and Eyman prison complexes and recommends the health, education, programming, substance abuse, etc.) and meet
following changes: all federal, state, and ADCRR standards.
The Executive’s expectation is that the Department will begin
vacating and deactivating ASPC-Florence (with the excep-
diverting inmates to other prison complexes in the ADCRR
tion of the Globe unit), which will eliminate 3,702 State-
system to gradually phase down the number of inmates at
operated beds;
Florence. Physical plant issues, if left unremediated, can cause
moving existing staff from the Florence prison to the Eyman
significant staff and inmate safety issues.
prison to fill vacant positions; and
This proposal was contemplated before the onset of the
• partnering with a third party that will manage and operate COVID-19 pandemic. Due to the increased uncertainty that the
2,706 beds for the State. pandemic has created – including staffing challenges, bed space
The deactivation of the Florence prison complex will not concerns, quarantine of inmates, and the temporary reduction of
require termination of any current ADCRR employees. The Eyman inmate intake due to slowed judicial proceedings – the Executive
prison complex, also located in Florence, will be able to absorb will continue to monitor the situation and will make adjustments
the majority of employees who work at the Florence complex. In
particular, the Executive intends that Florence complex Correc-
Figure 19
tional Officers will be transferred to the Eyman complex, helping
to eliminate the latter facility’s high Correctional Officer vacancy % Building Renewal Formula Appropriated
rate, which poses safety and security risks to staff and inmates.
The focus of this initiative is to ensure that ADCRR employees
and inmates occupy an environment that is conducive to reduc-
ing the recidivism rate. Additionally, the closure of the Florence
prison will remove $168.3 million in known building-renewal
needs at the aged facility, allowing ADCRR to prioritize building
renewal projects at other complexes.
Using a different cost-benefit analysis (the Department of
Administration’s Facilities Condition Index), the Florence prison
would fall into the “Complete Replacement” category. The index
is calculated by dividing the amount of Deferred Maintenance
needed by the Full Replacement Value. For Florence, this calcula-
tion is 71.7% ($168,300,000 divided by $234,600,000). Per the

as needed, which will either speed up or slow down the deactiva- This funding will be used to expand ADCRR’s substance abuse
tion plan. treatment capacity from 19.5% to 36.1% and allow an additional
2,527 inmates to receive treatment prior to release. To ensure
BUILDING RENEWAL
that each dollar invested results in more inmate treatment,
To further address the safety and security of staff and ADCRR plans to contract with private organizations that special-
inmates, the Executive Budget includes $53.7 million to fully fund ize in such efforts. In FY 2020, 34% of warrants issued by commu-
the Department of Administration’s building renewal formula and nity corrections officers cited drug/alcohol related violations.
the completion of fire and life safety projects at the Eyman prison. Increased treatment capacity will lead to more successful reentry
The building renewal formula, approved by the Legislature, is and lower recidivism rates.
the Sherman-Dergis Formula developed in 1981 at the University
of Michigan. In simple terms, the Sherman-Dergis Formula esti- STAFF SAFETY EQUIPMENT
mates the funding requirements for major maintenance over Radio communication and safety equipment are critical to
time. This investment will mark the first time the ADCRR’s Build- prison operations. To enhance the safety and security of staff and
ing Renewal Formula has been fully funded. inmates and reduce operational strain, the Executive Budget
ADCRR maintains 1,524 structures with a total area of 8.8 includes $2.8 million to replace obsolete radios and increase the
million square feet and a replacement value estimated at $2.1 inventory levels of safety vests, which are required for cell extrac-
billion. tions, searches, inmate movement, etc.
Each year the aging infrastructure needs critical repairs. On Funding will replace all of the radios that are 10-plus years
average, the Department has received $5.7 million per year to old, as the vendor has discontinued parts and service, and ensure
address maintenance and building renewal needs. Due to persis- that the Department’s inventory is replenished to their needed
tent underfunding of the formula, Arizona prisons’ building level so that operations and safety are not compromised.
renewal needs total $529 million ($360.7 million once the
SUPERIOR COURT PROBATION OFFICER RAISES
Florence complex is deactivated).
Full funding of the building renewal formula in FY 2022 will As part of the Executive’s coordinated ongoing efforts to
allow ADCRR to address numerous deferred maintenance reduce recidivism, the Executive budget seeks to fully fund
projects, with priority given to fire and life safety projects such as Probation as a viable alternative to incarceration.
replacement of fire systems and locks. The funding will also allow Per A.R.S. § 12-252, counties have the authority to set the
for the completion of necessary repairs at the Eyman prison – salaries of probation officers. Due to the State funding a portion
including doors, locks, fire systems, floors, and plumbing – that of the salaries and ERE for adult probation and juvenile probation
will enhance prison security. officers, the Executive Budget increases appropriations for
Probation special line items to meet the new county-approved
RECIDIVISM REDUCTION salary levels.
To expand substance abuse treatment programs available to The Executive Budget includes funding for adult and juvenile
inmates, the Executive Budget includes a funding increase of $5 probation officer salary increases and employee related expenses
million to increase treatment capacity. (ERE) from FY 2019, FY 2020, and FY 2021, as enacted by county
boards of supervisors.

Natural Resources
Thoughtful and effective stewardship of Arizona’s precious natural resources requires deliberate
planning and strategic investments.
“Arizona is the most beautiful state in the nation, and we are fires that threaten State and some private land, resulting in
committed to protecting our land, wildlife and natural non-reimbursable costs; and
resources. Every year, we are heavily focused on reducing the • cost-share fires, which occur on State and federal land.
risk of wildfires to protect people, pets and property — and Reimbursable. A.R.S. § 35-144 authorizes the Department of
that focus remains a priority this year. From protecting Forestry and Fire Management (DFFM) to use up to $20 million
groundwater quality to maintaining our State Parks, we will per year from the Budget Stabilization Fund (BSF) for reimbursa-
continue to protect our naturally diverse state.” ble costs. DFFM uses the BSF to pay local fire districts and then
Gov. Doug Ducey repays the BSF from federal reimbursements. Because of this
cooperative agreement structure, there is no mechanism for local
T
districts to seek federal reimbursement without going through
he FY 2022 Executive Budget places a strong emphasis on
DFFM.
fighting and reducing the risk of wildfires, addressing threats
Non-Reimbursable. The federal government does not reim-
to groundwater quality, improving mine safety, expanding fish
burse the State for the costs of fire suppression on State-owned
hatchery capacity, and enhancing the visitor experience at State
or unincorporated private lands. Each fiscal year, DFFM is allotted
parks.
$4 million from the Fire Suppression Fund to pay for non-reim-
Devastating property losses and damage to State and private
bursable fire suppression costs incurred on those lands.
lands, combined with the growing cost of fire suppression
Cost-Share Fires. The costs of suppressing fires that occur on
throughout the western states, have made increased fire-
both State and federal land are partially reimbursed to the State
suppression funding and heightened investment in healthy
pursuant to a cost-share agreement with the federal government.
forests a major priority.
The objective of a cost-share agreement is to establish and
document the cost sharing and basic organizational structure in
Fire Suppression
response to multijurisdictional incidents, i.e., fires burning on or
A prolonged drought, combined with population growth and threatening lands for which the State and one or more cooperat-
poorly managed federal lands, has resulted in increased State ing federal agencies are responsible and for which a decision is
spending on wildfires. made to share costs. Factors that impact cost-share situations
From 2014 to 2018, the State’s fire-suppression costs
increased from $115 per acre to $353. Similarly, at the federal
Figure 20
level, from 2015 to 2018 fire-suppression costs increased from
$210 per acre to $359. State Fire Suppression Costs
The additional State spending has not correlated with a
proportional increase in the Fire Suppression Fund (FSF) budget
for the Department of Forestry and Fire Management (DFFM). FSF
funding is inadequate, and DFFM operates at a deficit. As Figure
20 illustrates, the State’s fire-suppression costs for the last five
years (excluding FY 2017, which was an outlier) have averaged
$6.4 million, far in excess of the FSF’s $4 million annual
appropriation.
FIRE SUPPRESSION COSTS

From a budget perspective, the State’s fire suppression activ-
ities encompass three types of fires:
fires that threaten federal land, resulting in reimbursable
costs;

include the mission, jurisdictions involved, location of resources, ARIZONA HEALTHY FOREST INITIATIVE
values at risk, suppression difficulty, and location of fire-control Landscapes In Arizona and throughout the west have become
features. overgrown and prone to wildfires, and the pace of forest treat-
ment projects to reduce the wildfire risk has been too slow.
FUNDING INCREASE
Failure to reduce fire-causing fuel loads has been felt by the
The Executive Budget increases the FSF appropriation to align State in a growing financial burden for fire suppression, as
with actual fire-suppression expenditures. mentioned above. Responsibility for paying fire-suppression
For the past five fiscal years, the $4 million allotted to the FSF costs (regardless of whether those costs are incurred by federal
has been insufficient to pay for fires occurring on State-owned or local assets) is borne by the agency responsible for the assets
and unincorporated lands. To address that issue, the Executive that are being protected. Because the State is responsible for
Budget includes a permanent increase of $2.4 million in funding protecting 22 million acres of State and private land in unincor-
above the enacted FY 2021 appropriation to account for higher porated areas, the high costs of protecting private property at the
fire-suppression costs incurred by the State. interface of urban areas and forested areas fall to the State, even
Also, an abnormally high concentration of fires on State land where the fire is on federal land.
and an increase in complex fires pushed suppression costs The Executive Budget includes an increase in funding to
beyond available funding in prior years. For context, suppression reduce the wildfire threat to Arizona, with a focus on removing
costs from the FY 2016 to FY 2020 fire seasons exceeded available the overgrown vegetation creating high fire risk in the wildland-
funding. Appropriated funding for FY2016 to FY 2020 was only urban interface. The State will implement a five-fold increase, to
$20.3 million, while actual fire costs reached $39.3 million. over 20,000 acres per year, in the amount of this land treated
The Executive has identified available fund sources to cover through in-house capacity and partner grants. While still working
that shortfall and to manage cash flow in the near term. However, alongside federal partners to reduce wildfire risk on federal lands,
a $2.2 million shortfall remains in State costs owed to federal this critical public safety initiative reflects a shift in strategy to one
partners. The Executive Budget increases funding to address that where the State takes a much larger role in reducing wildfire risk
issue. to Arizona communities and their assets.
Increased funding for non-reimbursable and cost-share fires To meet that challenge, over a two-year period 72 additional
is essential to the more than 200 cooperative agreements that Department of Corrections, Rehabilitation and Reentry (ADCRR)
the State maintains with local cooperators statewide that deploy crews will be deployed in four geographically strategic locations.
crews to fight fires. Cooperators are often small rural fire districts The new capacity will be phased in, with 50% in place in FY 2022
that depend on timely payment from the State to maintain posi- and 100% in place in FY 2023. Additionally, DFFM typically
tive cash flow. While the BSF provides enough capacity to quickly receives grant requests from partner organizations around the
reimburse local cooperators in response to federal fire needs, the state to reduce fuel loading creating wildfire risks. In recent years,
State lacks adequate resources to ensure timely payment when DFFM has funded approximately $500,000 of those projects,
these same cooperators respond to help requested by the State. resulting in approximately 500 acres of treatment per year. The
This initiative is critical to ensuring that local cooperators increase in grant funding, to $5 million, provides a ten-fold
continue to partner with the State. increase in partner capacity to 5,000 acres per year
GOVERNOR’S EMERGENCY FUND CAP INCREASE

Water Quality
In addition to permanently increasing DFFM’s FSF appropria-
tion, the Executive adds additional fire resources to the Gover- The City of Tucson’s central water production wellfield is
nor’s Emergency Fund. threatened by perfluoroalklyl and polyfluoroalkyl substance
In the past, the Governor’s Emergency Fund has been used to (PFAS) contamination. Studies have shown that high levels of
help cover part of the shortfall, but that practice has reduced PFAS can cause reproductive, developmental, liver, kidney, and
available funding for other disasters. immunological effects in laboratory animals.
The Executive Budget includes footnote language increasing, The contaminated plume has led to the shutdown of 18
from $4 million to $8 million, the aggregate liability cap incurred municipal drinking water supply wells. If left unmitigated, the
under a declaration of disaster (A.R.S. § 35-192). Of the $8 million, contamination could affect safe drinking water supplies for
$4 million will be used exclusively for DFFM for fire suppression. 60,000 Tucson residents. The Executive plans to leverage the
Any unobligated funds remaining at the end of the fiscal year will Water Quality Assurance Revolving Fund (WQARF) program and
revert to the General Fund. prioritize funding in FY 2022 to mitigate this threat. WQARF will
fund testing, monitoring, and remediation actions related to
mitigating the PFAS plume.

The Executive intends for ASPT to secure an additional
Figure 21
Cumulative Number of WQARF Sites Closed $560,000 in grant funding provided by the Land Water Conser-
vation Fund through the Great American Outdoors Act.
PARK-SPECIFIC INVESTMENT
Rockin’ River Ranch State Park. In consultation with the
Executive, ASPT’s new leadership has put forward a plan to
construct Rockin’ River Ranch in Camp Verde. Proposed by the
Executive and funded by the Legislature in the enacted FY 2018
budget, Rockin’ River will be a primitive day-use park featuring
unique trails and access to the Verde River.
The Executive Budget includes $750,000 to develop roads,
parking areas, and trails; demolish dilapidated structures; and
install vault toilets. The Executive intends for ASPT to secure an
additional $750,000 in grant funding provided by the Land Water
Conservation Fund through the Great American Outdoors Act.
Administered by the Department of Environmental Quality The new park is scheduled to be open in early summer 2023.
(DEQ), WQARF is Arizona’s approach to remediation of contami- Red Rock State Park. One of Arizona’s most popular parks,
nated hazardous waste sites. Through WQARF, the State main- Red Rock State Park offers visitors a unique experience in the
tains control over determining financial and other responsibility beauty of Sedona’s Red Rock Country. To preserve and perpetu-
for site remediation. After completing remediation on seven ate the park’s unique character and heighten the visitor experi-
WQARF sites over the past seven years, 35 sites remain on the ence, the Executive Budget includes funding to replace a 30-year-
WQARF program registry. old fire-suppression system and replace a dilapidated 40-year-
The Executive Budget continues to fully fund the WQARF old maintenance building.
program from the Corporate Income Tax (CIT), per the WQARF Dead Horse State Park. The Executive Budget includes
formula specified in A.R.S. § 49-282(B). $150,000 to construct an amphitheater at Dead Horse State Park.
The Executive intends for ASPT to secure an additional $150,000
Mine Safety in grant funding provided by the Land Water Conservation Fund
through the Great American Outdoors Act.
Between 2017 and 2020, mining-related employment in
The amphitheater will provide an immense benefit to the
Arizona increased by approximately 22%, without any change in
visitors and organizations that utilize the park for numerous
the Mine Inspector’s Office inspection capacity.
popular events, including the Verde Valley Birding & Nature
The Executive Budget includes funding for additional person-
Festival.
nel in the Inspection and Reclamation Mine Land Program, to
Kartchner Caverns State Park. The centerpiece of the State
help the agency perform mandatory annual mine inspections and
Parks in southern Arizona and an increasingly popular national
other essential operations that ensure the protection of miners’
attraction, Kartchner Caverns provides visitors a stunning cavern-
lives, health and safety.
exploration experience.
To ensure that the park continues to meet visitors’ high
State Parks expectations, the Executive Budget includes $450,000 to replace
The Executive Budget also provides funding within the the 20-year-old roof on the Discovery Center, which serves as the
Arizona State Parks and Trails (ASPT) system for targeted capital visitor center and houses vital IT infrastructure for the park.
improvements that reflect sound stewardship and will enhance
BUILDING RENEWAL
park visitors’ experience.
ASPT maintains 1,475 structures with a total area of 794,400
WASTEWATER TREATMENT SYSTEMS square feet and a replacement value estimated at $136 million.
In recognizing the need to provide permanent remediation The Executive Budget includes $2.4 million to replace or repair
to the wastewater issues at six state parks, the Executive Budget infrastructure and major building systems.
includes $560,000 to perform assessments and offset current
mitigation efforts. The former will provide options for permanent Hatchery Renovation
remediation for the State to consider in FY 2023, and the latter
The Game and Fish Department has projected, as of Decem-
will allow ASPT to address unexpected mitigation needs in FY
ber 2020, a shortfall of 110,000 pounds of trout and 230,000
2022.

pounds of warm-water sports fish in Arizona. To enhance recrea-
tional opportunities in the state, the Executive Budget includes
an increase in funding to conduct major renovation activities and
address the most critical infrastructure projects at the Bubbling
Ponds, Silver Creek, and Tonto Creek hatcheries.
Completion of major maintenance and renovation projects
will help to maintain current levels of fish production and prevent
losses associated with infrastructure failure.

Government That Works
The Executive Budget invests in secure data protection, robust economic development, critical
infrastructure, and prudent stewardship of capital assets.
development that will continue to bring high-paying jobs to

“With remote working by many state employees, we also
Arizona.
have the chance to further limit the size, cost and footprint
Business One-Stop. The Executive Budget includes $7.8
of government. Let’s truly ‘shrink’ government, by
million for continued development of a Business One-Stop web
eliminating unnecessary state buildings and saving taxpayer
portal – a single online location to help companies and individu-
dollars. Rather than spending money on maintaining
als seamlessly plan, start, and grow Arizona businesses and relo-
unneeded buildings, let’s prioritize areas of need, like
cate business from other states.
educating our kids, taking care of our sick, and keeping
The project is an ongoing partnership among the Depart-
our neighborhoods safe. “
ment of Administration, Arizona Commerce Authority, Arizona
Gov. Doug Ducey
Corporation Commission, Department of Revenue, and Secretary
of State.
T he FY 2022 Executive Budget leverages the excellent progress Efforts in FY 2022 will give Arizona entrepreneurs a single
since 2015 that has made government work better for Arizo- website to quickly and efficiently complete all State Government
nans through smart policies on cybersecurity, fleet management, processes required to start a business, accelerating business
capital investment, and innovative workforce solutions. creation, and reducing delays at State agencies.
Data Protection Connecting Arizona
National Guard Cyber Response Team. The Executive ARIZONA COMMERCE AUTHORITY
Budget includes $495,200 to expand the capacity of the Arizona Rural Broadband Internet Development. High-speed inter-
National Guard Cyber Response Team, which will improve net is essential for accelerating economic development, enhanc-
statewide cyber preparedness and emergency response. The ing education, expanding access to healthcare, improving public
team will complement the preventive work of the Statewide safety, and modernizing government services. The COVID-19
Information Security and Privacy Office (SISPO) by identifying pandemic has demonstrated that expanding broadband services
gaps in cyber defenses through vulnerability assessments and is more important than ever.
penetration testing. The team can be deployed to provide the To date, the Executive has:
initial emergency response, serving as a crucial bridge between
● established a statewide broadband office within the
incident detection and full activation of the State’s response and
Arizona Commerce Authority (ACA) to centrally coordinate
recovery resources.
broadband planning;
Arizona National Guard citizen soldiers and airmen who are
● reduced regulatory hurdles for broadband infrastructure
trained to serve in cybersecurity missions are valuable yet
development at the State Land Department; and
underutilized resources. Many of those soldiers and airmen are
engaged in full-time information technology careers in the • awarded $3 million in broadband grants to accelerate
private sector and possess expert-level skills and knowledge. design or construction of critical projects in strategic loca-
The Executive Budget provides funding to allow the Depart- tions across Arizona.
ment of Emergency and Military Affairs to maintain four full-time In June 2020, the Executive announced a major investment of
team members who will deploy on one-year rotations, allowing federal CARES Act funding to bridge the “digital divide” in
them to serve the State in that capacity while retaining the option response to the thousands of Arizona students who transitioned
to return to their professional careers. to online learning. The plan includes $40 million to install broad-
band conduit and fiber on Interstate 17 from Anthem to Flagstaff,
Arizona Is Open for Business and on Interstate 19 from Tucson to Nogales.
This collaborative effort between the State and the state’s
Sustaining the state’s thriving business climate requires
three public universities holds great promise for advancing digital
investments in business-focused infrastructure. Investments
equity in Arizona. The Executive Budget continues the momen-
included in the FY 2022 Executive Budget support economic
tum to expand and enhance broadband connectivity throughout

the state, with an additional infusion of $10 million to build upon ● $28 million at the Department of Corrections, Rehabilita-
the successful program that provides matching grant funding to tion and Reentry (ADCRR), including $22.2 million from the
underserved rural communities. The ACA will award the funds to General Fund (ADCRR facilities represent the largest
local partnerships or ventures that demonstrate clear and achiev- component within the ADOA building system, with 1,518
able plans to improve broadband services in one or more structures with a total area of 8.7 million square feet);
communities. ● $1 million at Arizona Exposition and State Fair (AESF) for
The $10 million in funding will include broadband infrastruc- necessary repairs and renovations of fairground facilities
ture development and community broadband planning. ACA will (due to financial challenges at AESF resulting from not
evaluate applications based on multiple criteria, including the holding the annual State Fair in 2020, the Executive Budget
number of community anchor institutions and people served, includes General Fund resources as opposed to using the
available matching funds, demonstrated local support, and agency’s own funds);
expected economic impact.
● $1.2 million at the Game and Fish Department for building
DEPARTMENT OF TRANSPORTATION renewal and additional maintenance and repair of dams
and hatcheries;
Interstate 40 West Broadband Corridor. The Executive
Budget also includes $33.1 million to fund a major expansion of ● $2.4 million at Arizona State Parks and Trails for building
the broadband corridor from Flagstaff to the California border renewal and maintenance; and
along Interstate 40. This expansion will add approximately 195 • $353,100 at the Pioneers’ Home for targeted repairs and
miles of broadband conduit and fiber optic cable. The broadband replacement of infrastructure and equipment.
corridor provides the backbone to broadband services and serves
Arizona’s Connected Workforce (ACW). In 1993, an Execu-
as a catalyst for connecting communities to high-speed internet.
tive Order established Arizona’s first official remote work
Interstate 17: Lane Additions. The Executive Budget
program. In 2003, the goal was to have 20% participation in the
includes $45 million for the third year of the three-year project to
remote work program for State employees in Maricopa County.
construct a third highway lane in each direction on I-17 between
Beginning in March 2020, an increased number of State
Anthem and Black Canyon City and add a flex lane from Black
employees have been working remotely in response to COVID-
Canyon City to Sunset Point. This project will reduce congestion
19. The State created Arizona’s Connected Workforce program
on a popular route, improve highway safety, and support
(ACW) in July. The ACW is a task force working to drive a sustain-
commerce through this corridor.
able statewide remote work transformation that focuses on best-
practices for managing and coaching a modern workforce.
Stewardship of Capital Assets One method for modernizing Arizona’s workforce is to estab-
DEPARTMENT OF ADMINISTRATION (ADOA) lish enterprise-wide “hoteling,” defined as “using a temporary,

unassigned workspace at a State building as needed.” The hotel-
The ADOA building renewal system includes an inventory of
ing space would primarily serve employees working remotely
4,557 structures with an aggregate area of 23.9 million gross
most of the time. This project would lead to financial savings
square feet and an estimated replacement value of $5.2 billion.
related to rent and facility management while also serving State
Effective stewardship of those valuable assets is a priority
employees and Arizonans at the speed of business.
reflected in the Executive Budget.
Historic State Capitol Comprehensive Building Renewal.
System-Wide Building Renewal Investments. The Execu-
The Executive Budget includes $2.9 million (including $2.5 million
tive Budget includes $24.2 million in one-time funding (including
from the General Fund) to address serious infrastructure, building
$6.2 million from the General Fund) for building renewal across
shell, and building services deficiencies at the historic State
the ADOA building system, including fire and life safety projects
Capitol Building.
and targeted infrastructure repair, replacement, and renovation.
Critical repairs are needed on the masonry exterior and
Additional focus in FY 2022 will be given to building renewal
copper dome. Additional repairs will include renovations to the
projects that target consolidation of building space. This will
building’s plumbing, water supply, sanitary waste line, service
ensure that State-owned buildings are able to support new
entrances, and electrical panels. This project will improve building
remote work initiatives, and it will help address buildings that are
safety and help to maintain historic State artifacts housed within
beyond repair and pose a liability to the State.
the Capitol complex.
The majority of the funding for this issue is derived from
Building Demolition and Physical Plant Conversion. As a
rental charges paid by State agencies that occupy State buildings.
part of a space consolidation initiative, the Executive Budget
The Executive Budget also includes $32.9 million to fully fund
includes $2 million to demolish two buildings, at 1601 W. Jeffer-
the building renewal formula for certain agencies, including:
son St. and 1645 W. Jefferson St. in Phoenix. The two buildings
are beyond repair.

Originally built in 1973, 1645 W. Jefferson has over $13 DEPARTMENT OF TRANSPORTATION (ADOT)
million in deferred maintenance and a Facilities Condition Index Highway Maintenance. In FY 2020 and FY 2021, ADOT
of 63%, warranting full replacement. This index is calculated added over 115 urban and 130 rural lane-miles to the State high-
based on Deferred Maintenance Needed divided by Full Replace- way system. The Executive Budget includes $3.3 million for ongo-
ment Value. ing maintenance of the new lane-miles, which will include road-
The 1601 W. Jefferson office building was built in 1971 and side and shoulder maintenance, landscaping, surface treatments,
has over $10 million in deferred maintenance costs. It has a Facil- and traffic signals.
ities Condition Index of 51%, indicating the need for major build- Building Renewal. In addition to managing the State’s high-
ing renovation or total replacement if deferred maintenance ways, ADOT maintains an independent building system that
continues. Due to the building’s condition and connection to includes 1,475 structures with a total area of 3.6 million square
other facilities in this project, ADOA will demolish this building feet and a replacement value estimated at $852 million. The
along with 1645 W. Jefferson. ADOA will work with the Depart- Executive Budget includes $15.7 million for ADOT to replace or
ment of Corrections, Rehabilitation and Reentry to identify suita- repair infrastructure and major building systems.
ble space in other facilities. Fleet Operations Modernization. The Executive Budget
An additional $800,000 is included to retrofit a physical plant, provides for a substantial modernization of the management
at 1535 W. Jefferson St., that serves these two buildings as well operations of the State motor vehicle fleet (State fleet). The
as a third building in the area. The physical plant will be converted process involves:
to service a single facility at 1535 W. Washington St.
● transferring ownership of the State fleet to ADOT from the
Exposition and State Fair. The Executive Budget includes $1
Arizona Department of Administration (ADOA); and
million for Arizona Exposition and State Fair (AESF) to replace the
• establishing two new ADOT funds: the State Motor Vehicle
fire alarm system at the Arizona Veterans Memorial Coliseum.
Fleet Operations (SMVFO) Fund and the State Motor Vehi-
The current fire alarm system is over 20 years old and, due to age
cle Fleet Recapitalization (SMVFR) Fund.
and scarcity of parts, is difficult to repair. This replacement will
allow AESF to comply with State fire code regulations, enhancing The SMVFO Fund will pay for maintenance and management
building safety for visitors and staff. of the State fleet, while the SMVFR Fund will pay for replacement
Due to financial challenges at AESF resulting from not hold- of vehicles within the State fleet. Each agency within the State
ing the annual State Fair in 2020, the Executive Budget includes fleet will have a sub-account in the SMVFR Fund. A new fee
General Fund resources as opposed to using the agency’s own schedule instituted by ADOT and assessed to agencies within the
funds. State fleet will provide the funding source for both funds. The
Executive Budget includes funding, as Statewide Adjustments, for
DEPARTMENT OF CORRECTIONS, REHABILITATION & any increased cost to agencies within the State Fleet due to the
REENTRY (ADCRR)
new fee schedule.
The Executive Budget includes $25.6 million for ADCRR to Benefits to the State from this modernization include maxim-
complete critical fire and life safety projects at the Eyman izing State fleet utilization, ensuring proper maintenance, fully
complex. The Department has identified fire alarm and suppres- leveraging procurement, and streamlining fleet operations.
sion systems that require replacement, doors and locks that Highway De-icing. ADOT uses liquid brine to de-ice high-
require refurbishment, and showers that require reconstruction. ways. The Executive Budget includes $2 million for ADOT to
This project will enhance the prison complex’s safety and security. construct new storage tanks at four locations around the state.
Strategic placement of the new tanks will allow ADOT to avoid
DEPARTMENT OF EMERGENCY AND MILITARY AFFAIRS
excessive highway closures due to unsafe icy conditions.
The Executive Budget includes $1.2 million for the Depart- Vehicle Fueling Facilities. The ADOT fueling network
ment of Emergency and Military Affairs (DEMA) to upgrade fire supports a majority of the agency’s day-to-day operations.
suppression systems that do not comply with fire code at several Sixteen stations rely on equipment that is beyond the expected
readiness centers around the state. DEMA will leverage the State useful service life, and the Executive Budget includes $1.8 million
funding to draw down $2.2 million in matching federal funding. to replace equipment at three of those stations.
DEPARTMENT OF JUVENILE CORRECTIONS

Other Funding Initiatives
The Executive Budget includes $2.5 million for the Depart-
ment of Juvenile Corrections (DJC) to upgrade doors in four units State Employee Health Insurance (HITF). The HITF
at Adobe Mountain School. Replacing doors is a necessary supports the State’s self-insured medical, pharmacy, and dental
investment in security infrastructure to maintain a safe environ- insurance for State employees. The Executive Budget includes a
ment for committed youth and the Youth Correctional Officers. one-time increase in premiums paid into the HITF by State agen-
cies on behalf of their employees. The increased premiums are

expected to generate an additional $36.8 million in total HITF
revenue, with $11.2 million originating from the General Fund.
Although the State has recently experienced slower growth
in medical and pharmacy costs, expenditures continue to outpace
revenues, leading to a declining fund balance. The one-time
increase allows the State to continue to offer excellent health
insurance benefits to employees while ADOA implements the
new health insurance contracts that took effect in January 2021.

FY 2022 Executive Budget
(Dollars in Thousands)
General Other Non- All Funds
Fund Appropriated Appropriated Total
Board of Accountancy 0.0 2,098.5 0.0 2,098.5
Acupuncture Board of Examiners 0.0 180.7 0.0 180.7
Department of Administration 8,209.9 198,463.9 1,018,284.9 1,224,958.7
Office of Administrative Hearings 921.5 0.0 794.0 1,715.5
African-American Affairs 133.2 0.0 20.0 153.2
Department of Agriculture 10,492.2 1,779.6 25,565.4 37,837.2
Arizona Health Care Cost Containment System 2,082,883.1 340,993.7 16,408,600.3 18,832,477.1
Statewide and Large Automation Projects 614.1 22,366.8 0.0 22,980.9
Commission on the Arts 2,000.0 0.0 1,809.7 3,809.7
Board of Athletic Training 0.0 130.5 0.0 130.5
Attorney General - Department of Law 25,411.0 55,021.0 67,274.0 147,706.0
Board of Barbers 0.0 419.2 0.0 419.2
Board of Behavioral Health Examiners 0.0 1,818.2 0.0 1,818.2
Board for Charter Schools 2,152.1 0.0 85.0 2,237.1
Department of Child Safety 413,031.2 835,541.7 0.0 1,248,572.9
Board of Chiropractic Examiners 0.0 450.6 0.0 450.6
Citizens' Clean Elections Commission 0.0 0.0 4,878.8 4,878.8
Commerce Authority 26,175.0 0.0 28,820.5 54,995.5
Community Colleges 66,317.4 0.0 0.0 66,317.4
Constable Ethics Standards & Training Board 0.0 0.0 583.3 583.3
Registrar of Contractors 0.0 12,690.0 4,666.8 17,356.8
Corporation Commission 843.1 27,993.0 2,341.4 31,177.5
Department of Corrections, Rehabilitation and Reentry 1,231,355.4 53,344.6 62,492.2 1,347,192.2
Board of Cosmetology 0.0 1,904.2 0.0 1,904.2
Criminal Justice Commission 0.0 6,496.3 23,557.4 30,053.7
Schools for the Deaf and the Blind 23,865.5 13,388.3 21,943.7 59,197.5
Commission for the Deaf and the Hard of Hearing 0.0 4,685.9 0.0 4,685.9
Board of Dental Examiners 0.0 1,438.6 0.0 1,438.6
Early Childhood Development and Health Board 0.0 0.0 151,691.6 151,691.6
Department of Economic Security 949,579.6 383,777.2 4,468,823.1 5,802,179.9
State Board of Education 11,334.3 0.0 0.0 11,334.3
Department of Education 5,816,271.5 321,235.3 2,186,688.3 8,324,195.1
Department of Emergency and Military Affairs 17,088.7 1,506.1 75,868.2 94,463.0
Department of Environmental Quality 15,000.0 72,111.9 83,818.7 170,930.6
Office of Economic Opportunity 485.5 0.0 114,531.0 115,016.5
Governor's Office for Equal Opportunity 0.0 197.7 0.0 197.7
Board of Equalization 673.2 0.0 0.0 673.2
Board of Executive Clemency 1,184.5 0.0 30.1 1,214.6
Exposition & State Fair 2,000.0 13,523.7 0.0 15,523.7
Board of Fingerprinting 0.0 0.0 690.6 690.6
Department of Forestry and Fire Management 36,022.3 0.0 40,200.3 76,222.6
Board of Funeral Directors & Embalmers 0.0 410.7 0.0 410.7
Game and Fish Department 0.0 46,070.4 86,508.7 132,579.1
Department of Gaming 2,509.5 16,038.3 443.9 18,991.7
Office of the Governor 10,924.8 0.0 44,085.6 55,010.4
Governor's Office of Strategic Planning and Budgeting 2,765.1 0.0 0.0 2,765.1
Department of Health Services 99,189.8 62,140.5 375,350.4 536,680.7

Governor's Office of Highway Safety 0.0 0.0 12,229.5 12,229.5
Arizona Historical Society 3,195.6 0.0 1,131.2 4,326.8
Prescott Historical Society of Arizona 867.7 0.0 548.1 1,415.8
Department of Homeland Security 0.0 0.0 25,138.2 25,138.2
Board of Homeopathic Medical Examiners 0.0 46.6 0.0 46.6
Department of Housing 0.0 332.5 94,839.8 95,172.3
Independent Redistricting Commission 4,100.0 0.0 0.0 4,100.0
Industrial Commission of Arizona 0.0 20,593.1 18,744.8 39,337.9
Department of Insurance and Financial Institutions 7,840.7 9,971.4 4,305.7 22,117.8
Court of Appeals 17,179.6 0.0 0.0 17,179.6
Superior Court 100,689.7 11,994.4 6,062.4 118,746.5
Supreme Court 21,897.5 31,560.8 25,109.5 78,567.8
Department of Juvenile Corrections 30,707.4 15,000.1 1,210.0 46,917.5
Land Department 12,563.8 8,080.7 1,252.8 21,897.3
Auditor General 20,991.5 0.0 1,310.3 22,301.8
House of Representatives 16,830.0 0.0 0.0 16,830.0
Joint Legislative Budget Committee 2,934.7 0.0 0.0 2,934.7
Legislative Council 9,026.6 0.0 0.0 9,026.6
Senate 13,253.9 0.0 0.0 13,253.9
Department of Liquor Licenses and Control 0.0 3,498.2 1,002.8 4,501.0
Local Government 10,650.7 0.0 0.0 10,650.7
Lottery Commission 0.0 163,081.0 1,589,528.0 1,752,609.0
Massage Therapy 0.0 486.1 0.0 486.1
Medical Board 0.0 7,677.7 0.0 7,677.7
Mine Inspector 1,515.6 112.9 456.7 2,085.2
Naturopathic Physicians Board of Medical Examiners 0.0 197.6 0.0 197.6
Navigable Stream Adjudication Commission 133.0 200.0 0.0 333.0
Board of Nursing 0.0 5,283.9 414.7 5,698.6
Nursing Care Ins. Admin. Examiners 0.0 503.1 0.0 503.1
Board of Occupational Therapy Examiners 0.0 204.7 0.0 204.7
Board of Dispensing Opticians 0.0 166.2 0.0 166.2
Board of Optometry 0.0 248.2 0.0 248.2
Board of Osteopathic Examiners 0.0 1,091.4 0.0 1,091.4
Arizona State Parks 0.0 19,883.4 18,564.5 38,447.9
Personnel Board 0.0 332.5 0.0 332.5
Board of Pharmacy 0.0 3,135.0 2,487.1 5,622.1
Board of Physical Therapy Examiners 0.0 513.9 0.0 513.9
Pioneers' Home 0.0 7,227.0 0.0 7,227.0
Board of Podiatry Examiners 0.0 171.6 0.0 171.6
Commission for Postsecondary Education 1,680.9 1,543.7 683.2 3,907.8
Power Authority 0.0 0.0 22,503.7 22,503.7
Board for Private Postsecondary Education 0.0 436.3 170.0 606.3
Board of Psychologist Examiners 0.0 563.0 0.0 563.0
Department of Public Safety 273,124.2 106,259.7 117,579.4 496,963.3
Public Safety Personnel Retirement System 6,000.0 0.0 24,424.0 30,424.0
Department of Real Estate 2,997.6 0.0 207.8 3,205.4
Residential Utility Consumer Office 0.0 1,388.9 0.0 1,388.9

Board of Respiratory Care Examiners 0.0 333.3 0.0 333.3
Arizona State Retirement System 0.0 24,920.8 109,753.2 134,674.0
Department of Revenue 31,799.5 48,983.2 1,434.8 82,217.5
School Facilities Board 240,735.2 0.0 261,645.3 502,380.5
Department of State - Secretary of State 13,163.6 1,479.3 5,304.5 19,947.4
Board of Tax Appeals 292.2 0.0 0.0 292.2
Board of Technical Registration 0.0 2,263.1 0.0 2,263.1
Office of Tourism 8,335.1 0.0 17,011.3 25,346.4
Department of Transportation 4,097.5 471,304.3 20,890.5 496,292.3
Treasurer 1,548.8 6,053.4 0.0 7,602.2
Governor’s Office on Tribal Relations 64.7 0.0 20.2 84.9
Board of Regents 22,480.0 0.0 197,695.4 220,175.4
Arizona State University 343,617.4 607,175.9 2,829,786.8 3,780,580.1
Northern Arizona University 116,454.6 156,298.7 407,663.3 680,416.6
University of Arizona - Main Campus 217,172.2 240,586.5 1,268,579.5 1,726,338.2
University of Arizona - Health Sciences Center 76,897.7 56,863.4 478,198.7 611,959.8
Department of Veterans' Services 8,399.9 51,278.2 9,294.4 68,972.5
Veterinary Medical Examining Board 0.0 618.3 0.0 618.3
Department of Water Resources 14,731.6 2,466.8 22,406.2 39,604.6
12,517,404.2 4,590,627.9 32,900,036.2 50,008,068.3
The total amount listed reflects agency operating expenditures and appropriations, but does not include expenditures and appropriations for capital projects or other selected
statewide items, such as retirement contribution adjustments.

General Fund Operating Budgets Summary
FY 2021 FY 2022 FY 2022
FY 2020 FY 2021 Executive Executive Changes and
Expenditures Appropriation Budget Budget Adjustments
Department of Administration 7,322.0 8,209.9 8,209.9 8,209.9 0.0

Office of Administrative Hearings 889.9 921.5 921.5 921.5 0.0
African-American Affairs 127.4 133.2 133.2 133.2 0.0
Department of Agriculture 10,163.2 10,492.2 10,492.2 10,492.2 0.0
Arizona Health Care Cost Containment 1,705,047.3 1,951,981.1 1,951,981.1 2,082,883.1 130,902.0
System
Commission on the Arts 200.0 0.0 0.0 2,000.0 2,000.0
Attorney General - Department of Law 24,844.8 25,411.0 25,411.0 25,411.0 0.0
Board for Charter Schools 1,511.0 2,152.1 2,152.1 2,152.1 0.0
Department of Child Safety 342,279.2 387,893.0 387,893.0 413,031.2 25,138.2
Commerce Authority 19,275.0 16,175.0 16,175.0 26,175.0 10,000.0
Community Colleges 97,431.8 64,895.4 64,895.4 66,317.4 1,422.0
Corporation Commission 621.2 647.1 647.1 843.1 196.0
Department of Corrections 873,034.8 1,205,396.2 1,205,396.2 1,231,355.4 25,959.2
Schools for the Deaf and the Blind 22,892.0 23,865.5 23,865.5 23,865.5 0.0
Department of Economic Security 749,708.2 812,054.3 812,054.3 949,579.6 137,525.3
State Board of Education 1,037.9 1,334.3 390,395.3 11,334.3 10,000.0
Department of Education 5,192,914.2 5,599,591.9 5,210,530.9 5,816,271.5 216,679.6
Department of Emergency and Military Affairs 9,935.1 12,373.0 12,373.0 17,088.7 4,715.7
Department of Environmental Quality 200.0 15,000.0 15,000.0 15,000.0 0.0
Office of Economic Opportunity 465.8 485.5 485.5 485.5 0.0
Board of Equalization 477.9 673.2 673.2 673.2 0.0
Board of Executive Clemency 1,079.2 1,184.5 1,184.5 1,184.5 0.0
Exposition & State Fair 0.0 0.0 0.0 2,000.0 2,000.0
Department of Forestry and Fire 14,314.1 13,399.6 15,569.7 36,022.3 22,622.7
Management
Department of Gaming 2,509.5 2,509.5 2,509.5 2,509.5 0.0
Office of the Governor 6,941.0 8,924.8 8,924.8 10,924.8 2,000.0
Governor's Office of Strategic Planning and 2,163.5 2,765.1 2,765.1 2,765.1 0.0
Budgeting
Department of Health Services 81,186.7 95,897.9 95,897.9 99,189.8 3,269.3
Arizona Historical Society 3,107.7 3,195.6 3,195.6 3,195.6 0.0
Prescott Historical Society of Arizona 808.1 867.7 867.7 867.7 0.0
Department of Housing 15,000.0 0.0 0.0 0.0 0.0
Independent Redistricting Commission 0.0 500.0 500.0 4,100.0 3,600.0
Department of Insurance and Financial 6,697.5 8,090.7 8,090.7 7,840.7 (250.0)
Institutions
Court of Appeals 16,709.4 17,179.6 17,179.6 17,179.6 0.0
Superior Court 92,009.2 98,194.3 98,194.3 100,689.7 2,495.4
Supreme Court 20,874.0 21,399.3 21,399.3 21,897.5 498.2
Department of Juvenile Corrections 25,763.2 30,616.2 30,616.2 30,707.4 91.2
Land Department 11,655.4 12,563.8 12,563.8 12,563.8 0.0
Auditor General 20,629.3 20,991.5 20,991.5 20,991.5 0.0
House of Representatives 15,579.2 16,830.0 16,830.0 16,830.0 0.0
Joint Legislative Budget Committee 2,303.2 2,934.7 2,934.7 2,934.7 0.0
Legislative Council 6,307.5 9,026.6 9,026.6 9,026.6 0.0
Senate 10,560.3 13,253.9 13,253.9 13,253.9 0.0
Local Government 10,650.7 10,650.7 10,650.7 10,650.7 0.0
Mine Inspector 1,079.1 1,301.9 1,301.9 1,515.6 213.7

General Fund Operating Budgets Summary
FY 2021 FY 2022 FY 2022
Navigable Stream Adjudication Commission 121.0 133.0 133.0 133.0 0.0

Commission for Postsecondary Education 1,680.0 1,680.9 1,680.9 1,680.9 0.0
Department of Public Safety 81,724.2 91,138.0 91,138.0 273,124.2 181,986.2
Public Safety Personnel Retirement System 6,000.0 6,000.0 6,000.0 6,000.0 0.0
Department of Real Estate 2,467.8 2,997.6 2,997.6 2,997.6 0.0
Department of Revenue 27,358.3 31,799.5 31,799.5 31,799.5 0.0
School Facilities Board 353,509.2 235,235.7 273,994.7 240,735.2 5,499.5
Department of State - Secretary of State 19,167.6 17,263.6 17,263.6 13,163.6 (4,100.0)
Board of Tax Appeals 278.9 292.2 292.2 292.2 0.0
Office of Tourism 7,964.0 8,335.1 8,335.1 8,335.1 0.0
Department of Transportation 29,563.0 0.0 0.0 4,097.5 4,097.5
Treasurer 823.4 1,548.8 1,548.8 1,548.8 0.0
Governor’s Office on Tribal Relations 59.7 64.7 64.7 64.7 0.0
Board of Regents 22,395.1 22,480.0 22,480.0 22,480.0 0.0
Arizona State University 334,270.6 324,717.4 343,617.4 343,617.4 18,900.0
Northern Arizona University 126,855.3 109,804.6 116,454.6 116,454.6 6,650.0
University of Arizona - Main Campus 217,350.0 207,722.2 217,172.2 217,172.2 9,450.0
University of Arizona - Health Sciences Center 76,897.7 76,897.7 76,897.7 76,897.7 0.0
Department of Veterans' Services 5,774.0 7,983.5 7,983.5 8,399.9 416.4
Department of Water Resources 66,688.9 14,731.6 14,731.6 14,731.6 0.0
General Fund Operating Total 10,809,255.1 11,692,789.4 11,768,718.5 12,516,790.1 823,978.1
The total amount listed reflects agency operating expenditures and appropriations, but does not include expenditures and appropriations for
capital projects or other selected statewide items, such as retirement contribution adjustments.

Other Appropriated Funds Operating Budgets Summary
FY 2021 FY 2022 FY 2022

Board of Accountancy
Accountancy Board Fund 1,839.9 2,098.5 2,098.5 2,098.5 0.0
Acupuncture Board of Examiners
Acupuncture Board of Examiners Fund 169.8 180.7 180.7 180.7 0.0
Department of Administration
Capital Outlay Stabilization Fund 15,142.2 18,749.8 18,749.8 18,749.8 0.0
Personnel Division Fund 11,016.9 13,056.8 13,056.8 13,056.8 0.0
Information Technology Fund 7,037.1 8,566.4 8,566.4 8,566.4 0.0
Air Quality Fund 453.9 927.3 927.3 927.3 0.0
State Web Portal Fund 6,146.8 6,705.1 6,705.1 6,705.1 0.0
Special Employee Health Fund 4,918.6 5,449.1 5,449.1 5,449.1 0.0
Capitol Mall Consolidation Fund 0.0 0.0 0.0 375.9 375.9
Motor Pool Revolving Fund 7,068.2 10,199.7 10,199.7 0.0 (10,199.7)
Admin - Special Services Fund 662.5 1,172.8 1,172.8 1,172.8 0.0
State Surplus Materials Revolving Fund 2,542.5 3,003.2 3,003.2 3,003.2 0.0
Federal Surplus Materials Revolving Fund 30.1 467.4 467.4 467.4 0.0
Risk Management Fund 82,722.4 94,772.9 97,574.4 96,879.0 2,106.1
Arizona Financial Information System 8,585.4 9,549.1 9,549.1 9,549.1 0.0
Collections Fund
Automation Operations Fund 26,216.1 31,275.4 31,275.4 31,275.4 0.0
Telecommunications Fund 1,368.3 1,693.6 1,693.6 1,693.6 0.0
Corrections Fund 573.7 593.0 593.0 593.0 0.0
Agency Total 174,484.7 206,181.6 208,983.1 198,463.9 (7,717.7)
Department of Agriculture
Nuclear Emergency Management Fund 252.4 280.5 280.5 280.5 0.0
Air Quality Fund 1,391.5 1,499.1 1,499.1 1,499.1 0.0
Agency Total 1,643.9 1,779.6 1,779.6 1,779.6 0.0
Arizona Health Care Cost Containment System
Tobacco Tax and Health Care Fund MNA 66,861.8 65,627.2 65,627.2 65,627.2 0.0
TPTF Emergency Health Services Account 16,216.3 16,216.3 16,216.3 16,216.3 0.0
Substance Abuse Services Fund 1,350.2 2,250.2 2,250.2 2,250.2 0.0
KidsCare - Federal Revenue and Expenditures 80,961.3 81,348.2 81,348.2 98,403.0 17,054.8
Fund
Budget Neutrality Compliance Fund 3,906.4 4,037.4 4,037.4 4,037.4 0.0
Prescription Drug Rebate Fund 149,574.5 148,459.6 148,459.6 154,459.6 6,000.0
Agency Total 318,870.5 317,938.9 317,938.9 340,993.7 23,054.8
Board of Athletic Training
Athletic Training Fund 112.7 130.5 130.5 130.5 0.0

FY 2021 FY 2022 FY 2022

Attorney General - Department of Law

Risk Management Fund 0.0 0.0 0.0 500.0 500.0
Interagency Service Agreements Fund 14,870.0 16,980.5 16,980.5 16,980.5 0.0
Collection Enforcement Revolving Fund - 6,464.3 7,132.7 7,132.7 7,132.7 0.0
Operating
Internet Crimes Against Children Enforcement 0.0 900.0 900.0 900.0 0.0
Fund
Risk Management Fund 9,008.2 9,927.3 9,927.3 9,927.3 0.0
Attorney General Legal Services Cost 1,544.1 2,166.6 2,166.6 2,166.6 0.0
Allocation Fund
Consumer Protection - Consumer Fraud 10,235.2 10,889.3 10,889.3 13,478.1 2,588.8
Revolving Fund
Antitrust Enforcement Revolving Fund 109.5 152.5 152.5 152.5 0.0
Victims Rights Fund 2,495.0 3,783.3 3,783.3 3,783.3 0.0
Agency Total 44,726.3 51,932.2 51,932.2 55,021.0 3,088.8
Board of Barbers
Board of Barbers Fund 387.3 419.2 419.2 419.2 0.0
Board of Behavioral Health Examiners
Behavioral Health Examiner Fund 1,564.8 1,818.2 1,818.2 1,818.2 0.0
Department of Child Safety
Temporary Assistance for Needy Families 152,802.0 159,091.1 159,091.1 159,091.1 0.0
(TANF) Fund
Child Care and Development Fund 28,980.2 35,400.0 35,400.0 40,516.0 5,116.0
DCS Expenditure Authority Fund 318,141.9 438,965.3 505,288.4 634,258.3 195,293.0
Child Abuse Prevention Fund 449.4 1,459.3 1,459.3 1,459.3 0.0
Children and Family Services Training Program 0.0 217.0 217.0 217.0 0.0
Fund
Risk Management Revolving Fund 0.0 2,602.0 2,602.0 0.0 (2,602.0)
Agency Total 500,373.5 637,734.7 704,057.8 835,541.7 197,807.0
Board of Chiropractic Examiners
Chiropractic Examiners Board Fund 390.1 450.6 450.6 450.6 0.0
Commerce Authority
State Web Portal Fund 2,250.0 0.0 0.0 0.0 0.0
Registrar of Contractors
Registrar of Contractors Fund 10,611.1 12,690.0 12,690.0 12,690.0 0.0
Corporation Commission
Utility Regulation Revolving 14,437.3 14,932.6 14,932.6 14,932.6 0.0
Securities Regulatory & Enforcement 5,060.9 5,286.1 5,286.1 5,286.1 0.0
Public Access Fund 6,546.9 6,976.2 6,976.2 6,976.2 0.0
Securities Investment Management Fund 713.3 745.5 745.5 745.5 0.0
Arizona Arts Trust Fund 50.7 52.6 52.6 52.6 0.0
Agency Total 26,809.1 27,993.0 27,993.0 27,993.0 0.0

FY 2021 FY 2022 FY 2022

Department of Corrections
Corrections Fund 30,312.2 30,312.3 30,312.3 30,312.3 0.0
State Education Fund for Correctional 729.0 769.6 769.6 769.6 0.0
Education Fund
DOC - Alcohol Abuse Treatment Fund 274.0 555.5 555.5 555.5 0.0
Transition Program Fund 592.2 2,400.1 2,400.1 2,400.1 0.0
Prison Construction and Operations Fund 2,499.8 12,500.0 12,500.0 12,500.0 0.0
Inmate Store Proceeds Fund 926.7 1,341.3 1,341.3 1,341.3 0.0
Penitentiary Land Earnings Fund 2,487.5 2,804.0 2,804.0 2,804.0 0.0
State Charitable, Penal & Reformatory Land 2,661.5 2,661.8 2,661.8 2,661.8 0.0
Earnings Fund
Agency Total 40,483.1 53,344.6 53,344.6 53,344.6 0.0
Board of Cosmetology
Board of Cosmetology Fund 1,776.1 1,897.4 1,897.4 1,904.2 6.8
Criminal Justice Commission
Criminal Justice Enhancement Fund 439.3 668.5 668.5 668.5 0.0
Victim Compensation and Assistance Fund 3,978.6 4,229.9 4,229.9 4,229.9 0.0
Resource Center Fund 582.5 624.2 624.2 624.2 0.0
Transition Program Fund 742.5 0.0 0.0 0.0 0.0
Fingerprint Clearance Card Fund 89.8 600.0 600.0 0.0 (600.0)
State Aid to County Attorneys Fund 716.3 973.7 973.7 973.7 0.0
Agency Total 6,549.0 7,096.3 7,096.3 6,496.3 (600.0)
Schools for the Deaf and the Blind
Schools for the Deaf and the Blind Fund 13,066.7 13,388.3 13,388.3 13,388.3 0.0
Commission for the Deaf and the Hard of Hearing
Telecommunication for the Deaf Fund 4,470.4 4,685.9 4,685.9 4,685.9 0.0
Board of Dental Examiners
Dental Board Fund 1,142.9 1,261.2 1,261.2 1,438.6 177.4
Department of Economic Security
Statewide Cost Allocation Plan Fund 0.0 1,000.0 1,000.0 1,000.0 0.0
Temporary Assistance for Needy Families 65,395.9 65,839.8 65,839.8 65,839.8 0.0
(TANF) Fund
Child Care and Development Fund 188,120.6 181,557.8 274,270.1 199,543.0 17,985.2
Workforce Investment Grant Fund 72,176.2 56,085.5 56,085.5 56,085.5 0.0
Special Administration Fund 4,511.2 4,550.0 4,550.0 4,550.0 0.0
Child Support Enforcement Administration 8,880.9 17,531.3 17,531.3 17,531.3 0.0
Fund
Domestic Violence Services Fund 3,071.0 4,000.0 4,000.0 4,000.0 0.0
Public Assistance Collections Fund 0.0 423.6 423.6 423.6 0.0
Department Long-Term Care System Fund 26,559.6 26,563.8 30,563.8 32,463.8 5,900.0
Spinal and Head Injuries Trust Fund 2,326.8 2,340.2 2,340.2 2,340.2 0.0
Agency Total 371,042.2 359,892.0 456,604.3 383,777.2 23,885.2

FY 2021 FY 2022 FY 2022

Department of Education
School Accountability - Prop 301 Fund 0.0 7,000.0 7,000.0 7,000.0 0.0
Teacher Certification Fund 1,956.2 2,420.7 2,420.7 2,420.7 0.0
Empowerment Scholarship Account Fund 1,283.4 0.0 0.0 0.0 0.0
Department of Education Professional 42.7 2,700.0 2,700.0 2,700.0 0.0
Development Revolving Fund
Tribal College Dual Enrollment Program Fund 250.0 250.0 250.0 325.0 75.0
Permanent State School Fund 290,489.1 300,612.6 300,612.6 308,789.6 8,177.0
Agency Total 294,021.4 312,983.3 312,983.3 321,235.3 8,252.0
Department of Emergency and Military Affairs
Nuclear Emergency Management Fund 1,430.3 1,506.1 1,506.1 1,506.1 0.0
Emergency Management Assistance Compact (97.8) 0.0 0.0 0.0 0.0
Revolving Fund
Agency Total 1,332.5 1,506.1 1,506.1 1,506.1 0.0
Department of Environmental Quality
DEQ Emissions Inspection Fund 27,438.4 26,665.8 26,665.8 26,665.8 0.0
Hazardous Waste Management Fund 1,607.3 1,785.0 1,785.0 1,785.0 0.0
Air Quality Fund 5,479.0 5,472.4 5,472.4 5,472.4 0.0
Underground Storage Tank Revolving 0.0 160.8 160.8 160.8 0.0
Recycling Fund 1,033.7 1,396.8 1,396.8 1,396.8 0.0
Permit Administration Fund 4,124.1 7,327.1 7,327.1 7,327.1 0.0
Emergency Response Fund 132.7 132.8 132.8 132.8 0.0
Solid Waste Fee Fund 1,146.5 1,280.7 1,280.7 1,884.7 604.0
Water Quality Fee Fund 7,452.0 10,806.3 10,806.3 11,006.3 200.0
Safe Drinking Water Program Fund 1,661.7 1,854.7 1,854.7 2,254.7 400.0
Indirect Cost Recovery Fund 13,510.1 14,025.5 14,025.5 14,025.5 0.0
Agency Total 63,585.5 70,907.9 70,907.9 72,111.9 1,204.0
Governor's Office for Equal Opportunity
Personnel Division Fund 122.3 197.7 197.7 197.7 0.0
Exposition & State Fair
Arizona Exposition and State Fair Fund 13,060.8 13,523.7 13,523.7 13,523.7 0.0
Board of Funeral Directors & Embalmers
Funeral Directors & Embalmers Fund 361.2 401.1 401.1 410.7 9.6
Game and Fish Department
Game and Fish Fund 32,749.5 39,703.7 39,703.7 39,703.7 0.0
Watercraft Licensing Fund 3,129.5 4,991.4 4,991.4 4,991.4 0.0
Game, Non-Game, Fish and Endangered 170.4 357.9 357.9 357.9 0.0
Species Fund
Capital Improvement Fund 1,047.3 1,001.2 1,001.2 1,001.2 0.0
Wildlife Endowment Fund 0.0 16.2 16.2 16.2 0.0
Agency Total 37,096.7 46,070.4 46,070.4 46,070.4 0.0

FY 2021 FY 2022 FY 2022

Department of Gaming
State Lottery Fund 300.0 300.0 300.0 300.0 0.0
Permanent Tribal-State Compact Fund 2,093.5 2,176.5 2,176.5 2,176.5 0.0
Arizona Benefits Fund - NEW 9,468.3 11,243.5 11,243.5 11,243.5 0.0
Racing Regulation Fund 1,742.5 2,466.0 2,466.0 2,216.0 (250.0)
Racing Regulaions Fund - Unarmed Combat 99.9 102.3 102.3 102.3 0.0
Subaccount
Agency Total 13,704.2 16,288.3 16,288.3 16,038.3 (250.0)
Department of Health Services
Capital Outlay Stabilization Fund 32.3 0.0 0.0 0.0 0.0
Tobacco Tax Hlth Care Fund MNMI Account 603.5 700.0 700.0 700.0 0.0
Health Services Licenses Fund 14,396.0 16,241.3 16,241.3 15,931.3 (310.0)
Child Care and Development Fund 916.8 911.5 911.5 911.5 0.0
Disease Control Research Fund 1,022.2 1,000.0 1,000.0 1,000.0 0.0
Health Research Fund 4,117.3 3,000.0 3,000.0 3,000.0 0.0
Nuclear Emergency Management Fund 523.5 789.7 789.7 789.7 0.0
Emergency Medical Operating Services Fund 4,932.6 5,841.9 5,841.9 3,912.6 (1,929.3)
Newborn Screening Program Fund 7,007.6 7,741.2 7,741.2 8,837.9 1,096.7
Nursing Care Institution Resident Protection 64.9 138.2 138.2 138.2 0.0
Revolving Fund
Prescription Drug Rebate Fund 0.0 0.0 0.0 4,000.0 4,000.0
Environmental Laboratory Licensure Revolving 709.7 952.0 952.0 952.0 0.0
Fund
Child Fatality Review Fund 94.7 99.2 99.2 199.2 100.0
Vital Records Electronic Systems Fund 3,111.0 3,701.7 3,701.7 3,701.7 0.0
The Arizona State Hospital Fund 2,789.3 2,573.4 2,573.4 2,883.4 310.0
DHS State Hospital Land Earnings Fund 575.1 650.0 650.0 650.0 0.0
Health Services Lottery Fund 86.0 100.0 100.0 100.0 0.0
Indirect Cost Fund 8,812.4 10,678.6 10,678.6 11,353.1 674.5
Justice Reinvestment Fund - NEW 0.0 0.0 0.0 1,737.3 1,737.3
Smart and Safe Arizona Fund - NEW 0.0 0.0 0.0 1,342.6 1,342.6
Agency Total 49,794.9 55,118.7 55,118.7 62,140.5 7,021.8
Board of Homeopathic Medical Examiners
Homeopathic Medical Examiners Fund 40.5 46.6 46.6 46.6 0.0
Department of Housing
Housing Trust Fund 322.2 332.5 332.5 332.5 0.0
Industrial Commission of Arizona
Industrial Commission Administration Fund - 19,552.0 20,593.1 20,593.1 20,593.1 0.0
NEW
Department of Insurance and Financial Institutions
Financial Services Fund 3,676.4 4,157.4 4,157.4 4,157.4 0.0
Automobile Theft Authority Fund 5,230.9 5,330.0 5,330.0 5,763.7 433.7
Banking Department Revolving Fund 1.9 50.3 50.3 50.3 0.0
Agency Total 8,909.2 9,537.7 9,537.7 9,971.4 433.7

FY 2021 FY 2022 FY 2022

Superior Court
Supreme Court CJEF Disbursements Fund 2,142.3 5,475.8 5,475.8 5,475.8 0.0
Judicial Collection Enhancement Fund 4,459.2 6,015.7 6,015.7 6,015.7 0.0
Drug Treatment and Education Fund 499.9 502.9 502.9 502.9 0.0
Agency Total 7,101.4 11,994.4 11,994.4 11,994.4 0.0
Supreme Court
Supreme Court CJEF Disbursements Fund 3,322.0 4,497.1 4,497.1 4,497.1 0.0
Judicial Collection Enhancement Fund 12,582.4 15,198.7 15,198.7 15,198.7 0.0
Defensive Driving Fund 3,312.7 4,316.9 4,316.9 4,316.9 0.0
Court Appointed Special Advocate Fund 3,523.5 3,627.5 3,627.5 4,092.4 464.9
Confidential Intermediary and Fiduciary Fund 311.8 509.4 509.4 509.4 0.0
State Aid to Courts Fund 1,928.4 2,946.3 2,946.3 2,946.3 0.0
Agency Total 24,980.8 31,095.9 31,095.9 31,560.8 464.9
Department of Juvenile Corrections
Juvenile Corrections CJEF Distribution Fund 131.2 546.2 546.2 546.2 0.0
Juvenile Education Fund 1,299.8 1,986.0 1,986.0 1,986.0 0.0
Local Cost Sharing Fund 0.0 8,450.9 8,450.9 8,450.9 0.0
State Charitable, Penal and Reformatory Land 2,491.2 4,017.0 4,017.0 4,017.0 0.0
Fund
Agency Total 3,922.2 15,000.1 15,000.1 15,000.1 0.0
Land Department
Environmental Special Plate Fund 150.7 260.6 260.6 260.6 0.0
Due Diligence Fund 135.5 500.0 500.0 500.0 0.0
Trust Land Management Fund 6,519.3 7,320.1 7,320.1 7,320.1 0.0
Agency Total 6,805.5 8,080.7 8,080.7 8,080.7 0.0
Department of Liquor Licenses and Control
Liquor Licenses Fund 3,280.9 3,498.2 3,498.2 3,498.2 0.0
Local Government
State Charitable, Penal & Reformatory Land 500.0 500.0 500.0 0.0 (500.0)
Earnings Fund
Lottery Commission
Lottery Fund 125,661.5 148,164.9 148,164.9 163,081.0 14,916.1
Massage Therapy
Massage Therapy Board Fund 465.9 486.1 486.1 486.1 0.0
Medical Board
Medical Examiners Board Fund 6,691.3 7,227.7 7,227.7 7,677.7 450.0
Mine Inspector
Aggregate Mining Reclamation Fund 22.8 112.9 112.9 112.9 0.0
Naturopathic Physicians Board of Medical Examiners
Naturopathic Board Fund 154.3 197.6 197.6 197.6 0.0
Navigable Stream Adjudication Commission
Arizona Water Banking Fund 47.2 200.0 200.0 200.0 0.0
Board of Nursing
Nursing Board Fund 4,630.3 4,927.5 4,927.5 5,283.9 356.4

FY 2021 FY 2022 FY 2022

Nursing Care Ins. Admin. Examiners

Nursing Care Institution 428.0 470.4 470.4 503.1 32.7
Administrators/ACHMC Fund
Board of Occupational Therapy Examiners
Occupational Therapy Fund 173.8 204.7 204.7 204.7 0.0
Board of Dispensing Opticians
Dispensing Opticians Board Fund 140.0 159.7 159.7 166.2 6.5
Board of Optometry
Board of Optometry Fund 224.9 248.2 248.2 248.2 0.0
Board of Osteopathic Examiners
Osteopathic Examiners Board Fund 930.3 1,038.0 1,038.0 1,091.4 53.4
Arizona State Parks
State Lake Improvement Fund 225.0 0.0 0.0 0.0 0.0
State Parks Revenue Fund 15,450.6 16,472.8 16,619.9 18,883.4 2,410.6
Park Store Fund - NEW 0.0 0.0 0.0 1,000.0 1,000.0
Agency Total 15,675.6 16,472.8 16,619.9 19,883.4 3,410.6
Personnel Board
Personnel Division Fund 138.6 332.5 332.5 332.5 0.0
Board of Pharmacy
Pharmacy Board Fund 2,477.4 2,689.6 2,689.6 3,135.0 445.4
Board of Physical Therapy Examiners
Physical Therapy Fund 438.3 513.9 513.9 513.9 0.0
Pioneers' Home
Pioneers' Home State Charitable Earnings Fund 4,467.7 4,658.5 5,058.5 5,089.5 431.0
Pioneers' Home Miners' Hospital Fund 3,056.9 2,137.5 2,137.5 2,137.5 0.0
Agency Total 7,524.6 6,796.0 7,196.0 7,227.0 431.0
Board of Podiatry Examiners
Podiatry Examiners Board Fund 140.6 171.6 171.6 171.6 0.0
Commission for Postsecondary Education
Postsecondary Education Fund 1,268.5 1,543.7 1,543.7 1,543.7 0.0
Board for Private Postsecondary Education
Private Postsecondary Education Fund 394.3 436.3 436.3 436.3 0.0
Board of Psychologist Examiners
Psychologist Examiners Board Fund - NEW 488.3 529.9 529.9 563.0 33.1

FY 2021 FY 2022 FY 2022

Department of Public Safety

State Highway Fund 318.2 318.2 318.2 8,169.1 7,850.9
Arizona Highway Patrol Fund 194,725.9 200,822.7 200,822.7 54,286.8 (146,535.9)
Safety Enforcement and Transportation 825.5 1,715.1 1,715.1 0.0 (1,715.1)
Infrastructure Fund
Motor Vehicle Liability Insurance Enforcement 1,250.9 1,302.7 1,302.7 1,302.7 0.0
Fund
DPS Forensics Fund 16,889.9 23,235.6 23,235.6 23,235.6 0.0
Public Safety Equipment Fund 2,852.1 2,893.7 2,893.7 2,893.7 0.0
Gang and Immigration Intelligence Team 2,074.8 2,411.6 2,411.6 2,411.6 0.0
Enforcement Mission Fund
Fingerprint Clearance Card Fund 1,334.5 1,596.1 1,596.1 1,596.1 0.0
State Aid to Indigent Defense Fund 634.2 700.0 700.0 700.0 0.0
Motorcycle Safety Fund 205.0 205.0 205.0 205.0 0.0
Parity Compensation Fund 3,990.5 4,175.5 4,175.5 4,175.5 0.0
Concealed Weapons Permit Fund 2,666.4 2,831.2 2,831.2 2,875.3 44.1
Peace Officer Training Equipment Fund 593.4 0.0 0.0 0.0 0.0
DPS Criminal Justice Enhancement Fund 1,535.6 2,999.7 2,999.7 2,999.7 0.0
Risk Management Revolving Fund 1,349.3 1,408.6 1,408.6 1,408.6 0.0
Agency Total 231,246.1 246,615.7 246,615.7 106,259.7 (140,356.0)
Residential Utility Consumer Office
Residential Utility Consumer Office Revolving 951.8 1,388.9 1,388.9 1,388.9 0.0
Fund
Board of Respiratory Care Examiners
Board of Respiratory Care Examiners Fund 298.8 333.3 333.3 333.3 0.0
Arizona State Retirement System
Retirement System Appropriated Fund - NEW 19,812.6 23,120.8 23,120.8 23,120.8 0.0
LTD Trust Fund 1,303.3 1,800.0 1,800.0 1,800.0 0.0
Agency Total 21,115.9 24,920.8 24,920.8 24,920.8 0.0
Department of Revenue
Tobacco Tax and Health Care Fund 508.0 694.7 694.7 694.7 0.0
DOR Liability Setoff Fund 733.6 815.5 815.5 815.5 0.0
Department of Revenue Administrative Fund 45,481.2 47,473.0 47,473.0 47,473.0 0.0
Agency Total 46,722.7 48,983.2 48,983.2 48,983.2 0.0
Department of State - Secretary of State
Election Systems Improvement Fund 308.7 0.0 0.0 192.5 192.5
Records Services Fund 684.6 744.8 1,239.3 1,286.8 542.0
Agency Total 993.3 744.8 1,239.3 1,479.3 734.5
Board of Technical Registration
Technical Registration Board Fund - NEW 1,862.0 2,263.1 2,263.1 2,263.1 0.0

FY 2021 FY 2022 FY 2022

Department of Transportation
Consumer Protection - Consumer Fraud 0.0 0.0 0.0 156.3 156.3
Revolving Fund
State Aviation Fund 1,793.0 2,064.8 2,064.8 2,064.8 0.0
State Highway Fund 346,971.2 406,793.9 406,793.9 418,630.2 11,836.3
Highway Damage Recovery Account Fund 8,000.0 8,000.0 8,000.0 8,000.0 0.0
Transportation Department Equipment Fund 17,540.9 19,167.8 19,167.8 19,167.8 0.0
Safety Enforcement and Transportation 756.7 896.0 896.0 0.0 (896.0)
Infrastructure Fund
Ignition Interlock Device Fund 315.3 332.8 332.8 332.8 0.0
Air Quality Fund 281.0 326.0 326.0 326.0 0.0
Vehicle Inspection and Certificate of Title 1,488.9 2,143.2 2,143.2 2,143.2 0.0
Enforcement Fund
Motor Vehicle Liability Insurance Enforcement 2,039.6 1,781.8 1,781.8 1,781.8 0.0
Fund
Highway User Revenue Fund 540.9 679.9 679.9 679.9 0.0
SMVFR Fund Subaccount - Department of 0.0 0.0 0.0 3,910.0 3,910.0
Forestry and Fire Management - NEW
SMVFR Fund Subaccount - Attorney General's 0.0 0.0 0.0 156.3 156.3
Office - NEW
SMVFR Fund Subaccount - Superior Court - 0.0 0.0 0.0 187.5 187.5
NEW
State Motor Vehicle Fleet Operations Fund - 0.0 0.0 0.0 13,767.7 13,767.7
NEW
Agency Total 379,727.5 442,186.2 442,186.2 471,304.3 29,118.1
Treasurer
Boating Safety Fund 0.0 2,183.8 2,183.8 2,183.8 0.0
Treasurer Empowerment Scholarship Account 304.4 0.0 0.0 0.0 0.0
Fund
State Treasurer's Operating Fund 3,059.5 3,457.0 3,457.0 3,869.6 412.6
Agency Total 3,363.9 5,640.8 5,640.8 6,053.4 412.6
Arizona State University
ASU Collections Fund Tuition and Fees 655,430.2 603,575.9 603,575.9 603,575.9 0.0
Technology and Research Initiative Fund 3,472.4 3,600.0 3,600.0 3,600.0 0.0
Agency Total 658,902.6 607,175.9 607,175.9 607,175.9 0.0
Northern Arizona University
NAU Collections - Appropriated Fund 156,154.5 156,298.7 156,298.7 156,298.7 0.0
University of Arizona - Main Campus
U of A Main Campus - Collections - 432,107.7 240,586.5 240,586.5 240,586.5 0.0
Appropriated Fund
University of Arizona - Health Sciences Center
U of A Main Campus - Collections - 48,436.8 56,863.4 56,863.4 56,863.4 0.0
Appropriated Fund
Department of Veterans' Services
State Home for Veterans Trust Fund 35,157.9 39,887.1 40,187.6 51,278.2 11,391.1
Veterinary Medical Examining Board
Veterinary Medical Examiners Board Fund 452.6 618.3 618.3 618.3 0.0

FY 2021 FY 2022 FY 2022

Department of Water Resources

Arizona Water Banking Fund 839.1 1,212.4 1,212.4 1,212.4 0.0
Water Resources Fund 574.5 977.7 977.7 977.7 0.0
Assured and Adequate Water Supply 266.7 276.7 276.7 276.7 0.0
Administration Fund
Agency Total 1,680.3 2,466.8 2,466.8 2,466.8 0.0
Other Appropriated Funds Operating Total 4,258,549.3 4,390,487.3 4,557,666.3 4,568,261.1 177,773.8
The total amount listed reflects agency operating expenditures and appropriations, but does not include expenditures and appropriations for
capital projects or other selected statewide items, such as retirement contribution adjustments.

Resources
Governor’s Office of Strategic Planning and Budgeting

Website
Executive Budgets for FY 2020 and Previous Years
Statement of Federal Funds
Master List of State Government Programs
Constitutional Appropriation Limit Calculation
State Agency Technical Resources

Agency Budget Development Software and Training Resources
Managing for Results, Arizona’s Strategic Planning Handbook
Other Helpful Links

Arizona’s Official Website
Governor’s Website
State Agencies’ Websites
Governor’s Fundamentals Map
Openbooks, a searchable database of the State Accounting System
Arizona Labor Market Statistics
Arizona Population Statistics
FY 2021 Appropriations Report

Acknowledgement
Governor Ducey gratefully acknowledges the skilled and dedicated efforts of the staff of the
Governor’s Office of Strategic Planning and Budgeting.
Director Matthew Gress
Deputy Director Bill Greeney
Assistant Director, Federal Funds Matt Hanson
Chief Economist and Budget Manager Glenn Farley
Strategic Planning and Performance Data Manager Denise Stravia
Budget Managers Ryan Vergara

Will Palmisono
Federal Programs and Performance Manager Anna Haney

Jason Mistlebauer
Senior Budget Analyst Sarah Giles
Budget Analyst Forecaster Zach Milne
Budget Analysts Adam Ciampaglio

Blake Dodd
Caroline Dudas
Angel Flores
Charlotte Hallett
Zach Harris
Bryce Haws
Kyley Jensen
Susan Nie
Jonathan Perkins
Stephanie Spera
Theresa Vencill
Perrin Williams
Federal Grants Compliance Analysts Veronica Peralta
Federal Grants Management Analysts Katje Benoit

Perrin Williams
Sarah Sanchez
Susan Nie
IT Systems Analyst Tao Jin
Federal IT and Data Manager Dean Johnson
AMS Performance Data Analyst Quinn Francis
Analyst and Executive Assistant Alec Eulano

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State of Arizona

FISCAL YEAR 2022

The Executive’s carefully calibrated financial priorities during

FY 2022 Executive Budget 3

FY 2022 Executive Budget 4

FY 2022 Executive Budget 5

the Executive Budget adds new funding for AHCCCS to continue

FY 2022 Executive Budget 6

Major General Fund Budget Issues,

K-12: Student Focused Acceleration ..................................................... $ 389.0

Projected Ending Balances

Projected Structural Balances

FY 2022 Executive Budget 7

Adj. Base Revenues $ 10,879,587,100 $ 11,783,559,800 $ 12,413,452,354 $ 13,025,472,855 $ 13,562,989,393

Enacted Spending $ 11,284,172,100 $ 11,761,208,000 $ 11,761,208,000 $ 12,625,523,500 $ 12,635,544,780

GENERAL FUND STRUCTURAL BALANCE

FY 2022 Executive Budget 8

The FY 2022 Executive budget continues this

remainder attributed to formula increases in U of A 215,809 207,722 0 9,450 217,172 4.5%

FY 2022 Executive Budget 9

($149.6M) Remove One-Time FY 2021 Appropriations $21.3M FY 2021 Initiatives 195

School Facilities Board 5

Baseline Changes Executive Initiatives

FY 2022 Executive Budget 10

Beginning Balance 957,241 372,457 372,457 624,913 219,330 225,545

TOTAL SOURCES OF FUNDS 11,927,736 11,426,686 12,209,150 12,844,853 12,861,090 13,204,822

Transfer to Rainy Day Fund 271,107 0 0 0 0 0 0 0 0 0

ENDING BALANCE 372,457 (334,522) 624,913 219,330 225,545 248,036

Ongoing Revenues 10,879,587 11,037,529 11,783,560 12,213,040 12,625,060 12,962,577

FY 2022 Executive Budget 11

Further, since the outbreak of the pandemic, some states

T he national economy suffered due to the 2020 COVID-19

It is important to note that, prior to the pandemic, the U.S.

FY 2022 Executive Budget 12

FY 2022 Executive Budget 13

FY 2022 Executive Budget 14

FY 2022 Executive Budget 15

FY 2022 Executive Budget 16

UPSIDE POTENTIAL Overall, General Fund revenue collections are on track to

FY 2022 Executive Budget 17

2021 2022 2023 2024

FY 2022 Executive Budget 18

Actual Estimate Estimate Estimate Estimate

TOTAL TAXES 11,065,384.3 12,133,948.7 12,683,424.4 13,405,400.2 13,961,495.8

TOTAL REVENUES 11,508,060.0 12,497,412.7 13,074,713.4 13,820,272.9 14,397,839.4

GRAND TOTAL REVENUES 10,970,495.1 11,836,693.4 12,219,939.8 12,641,760.3 12,979,276.8

FY 2022 Executive Budget 19

TOTAL TAXES 4,403,438.9 3,550,248.7 3,243,772.0

TOTAL OTHER REVENUES 15,743,413.9 15,366,812.1 16,066,419.8

TOTAL REVENUES 20,146,852.8 18,917,060.8 19,310,191.8

OTHER FINANCING SOURCES

GRAND TOTAL REVENUES 45,942,312.6 44,934,884.5 47,091,716.9

FY 2022 Executive Budget 20

6, next page.) Number of Express Pay Applications and Overall Value

FY 2022 Executive Budget 21

Also, in coordination with the Arizona

State universities were provided $115

FY 2022 Executive Budget 22

FY 2022 Executive Budget 23

The persistence of the COVID-19 pandemic resulted in

A t the beginning of the COVID-19 pandemic in March 2020,

Total Unweighted Average Daily Membership